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MyQuo.com

32 bit Versus 64 bit

February 15th, 2008

There have been lots of questions about the Microsoft Windows 32 bit versus 64 bit situation. Many people out there are wondering which version they should get and what the differences between the versions are.

The answer to the question is really easy. If you are having to ask, you are better off with the 64 bit version for now. Only the computer savvy will easily deal with the lack of support for these operating systems right now.

Do you need a 64 bit os? Absolutely not at this time. The biggest advantages that these systems give is the ability to use more memory. Since most computers are fine with 2 gb and will be good with up to 4 gb for the next couple years there is no reason to go with the 64 bit operating systems.

There will be a messy transition from 32 bit systems to 64 bit systems in a couple years. My suggestion is to stick with the well supported Microsoft 32 bit system and then move to the 64 bit systems when two things happen.

First, they are fully supported. You will find a lot of current hardware lacking the 64 bit drivers. Second, until programs or games require more than 2 gb of ram. It does you little good if you have 4 gb of ram, but your computer is only using 2 gb of it. This is the case for the majority of computer users at the moment.

BTW, the answer is the same whether you use XP or Vista, it makes little difference. In fact, you should be less likely to use the higher bit os with XP because it is even less supported.

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Antec Nine Hundred Mid Tower

February 14th, 2008

The antec nine hundred mid tower gaming case the one of those items that makes young gamers cream themselves. This is the case to have if you’re doing a custom build of your pc.

At around $110 this thing isn’t inexpensive, but then again this isn’t a cheaply made case. This high quality is the reason why this is one of the best selling cases out right now. The case comes with 2 120mm intake fans, 1 120mm exhaust fan, and a 200mm blow hole fan on top of the unit.

The intake fans will definitely have no problems keeping your hard drives cool and the 2 exhaust fans will have no problem getting the hot air out of the box. The clear side window is an added bonus for those of you who like to show off your pc.

The mid tower also sports a bottom mount psu location, which I personally like. Just make sure you have long cables on your psu. If you don’t you may have to buy extenders to reach all your components.

The bottom line is if your thinking about buying this case, buy it. Sure there are definitely budget builds out there that get the job done. The Antec nine hundred may cost a little bit more, but you also get a little more.

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E8400 temperature

February 13th, 2008

There has been a lot of talk about the e8400 temperature readings since this cpu came out. Many overclockers are readying irregular or high temps with these processors. If you are concerned about this, you are not alone.

The only real solution at this point in time is to wait for the first revision to come out. When will this be released, nobody knows. The amount of time it takes depends on how much of a problem Intel thinks this is.

The real question is how much of a problem is this? If you are not overclocking then it is not a problem at all. As long as you have your heat sink installed properly you won’t be having a problem with this issue

Keep in mind some motherboards are reading the chips better than others, check around and see how your motherboard is doing. It seems that Abit P35 boards are prone to the error. On the other hand Gigabyte P35 boards seem to be working fine with the e8400.

If you are a moderate overclocker, then this shouldn’t be a deal breaker. You will have to be very careful with your overclock to make sure you don’t fry your chip. If you don’t mind taking a little risk, feel free for a moderate overclock.

If you plan on doing as high as a oc as possible on the Intel e8400 cpu, this could definitely be a problem. There are other means to read the temperate of the processor, but you are playing with fire pushing the chip hard with faulty temperature readings from the chip.

Personally I would wait for the G0 type stepping that fixes this problem. I like the piece of mind of knowing everything is ok when I look up the temps. I am also a moderate overclocker and would like to push the chip to around 4ghz. That’s high enough where I would like to know what the temps are reading on the chip.

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Acer 22 Wide

February 12th, 2008

Acer 22 wide monitors have taken the market by storms out selling most comparable 22 inch monitors for a cheaper price. The two most popular models are the Acer AL2216Wbd and the Acer AL2223Wd. They are both similar in features, reviews and price.

These monitors are simply amazing. Acer 22 lcd widescreen monitors for sale for $230-250 shipped is a great deal. With a display in both black and silver, you will be able to find one that will look good with your gaming setup.

They come with both DVI and VGA hookups and the required cables to install and power them. There have been few reports of dead pixels and the image quality is reportedly good. The stand is a little lacking in sturdiness and lack of a height adjustment.

At the moment this is the best bang for the buck display you are going to find. Video and games look excellent. I remember paying $450 for my 20.1 inch widescreen 3 years ago. With the price being only about $250, I am temped to by one of these and dual monitor.

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3850

February 11th, 2008

The ATI 3850 video card is currently the best bang for the buck card out there right now. You should be able to get the 256mb version for around $170 shipped and the 512mb version for around $200 shipped.

Rebates for the video card are starting to pop up from various manufacturers. The reviews have been favorable and I personally am very pleased with my Diamond 3850 256mb version.

Remember that the card is PCI 2.0, but is backwards combatable with PCI 1.1. If you still have AGP and refuse to upgrade, they will be releasing a AGP 3850 soon. The card will support both AGP 4x and AGP 8x. Realize that your older CPU will likely be bottlenecking this card however.

Among the manufacturers making them are sapphire, diamond, visiontek, his, power color, gecube, gigabyte and asus. Most people are buying from sapphire and diamond and are very pleased with their cards.

As the card is newer, you may have some driver issues. The newest drivers did not work for me and I have to use the ones a couple updates back. Some people are also reporting issues with Vista. But who isn’t with any type of hardware?

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Angle Sata Cable

February 8th, 2008

There are many different types of sata cables.  There are right angle, left angle, angle to angle, straight to angle, and straight to straight.  Some of you might be wondering if one is better than the other and what the difference between all these types of angle sata cable are.

The first thing you need to realize is that a cable is a cable.  They all do the same job and the type of connector on the end of the cable doesn’t change how it works.  Now there are “high performance” cables out there which claim to be better.  Personally, I think those are a joke.

There are different types of angle sata cable because there are different needs of the user based on their case size, cable management, motherboard layout, etc.  Maybe you need an angled connector because your video card is covering your sata ports.  Or maybe you need an angled one because your case cover won’t fit back on because of the connector sticking out of your harddrive.

The only other thing you should worry about is trying to get the shortest cable that you can use.  The longer the sata cable the more problems that can come up.  Longer cables mean: more cable management, more restricted airflow, and more chance of signal interference.

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Build Own Website Free

February 7th, 2008

I’ll expand a little on what I wrote about yesterday.

Here are 3 ways to build a website.

1. Professional

Costs hundreds if not a couple thousand dollars. You hire a website guy to build you a site. Not worth it IMO.

2. Build Own Website Free - You Have Control

You need a domain and a website hosting plan. Costs less than $10 a month for cheapest hosting plans and $15 or less a year for your domain. Should have good speed on your site. You have 100% control over you site.

Your best bet would be using WordPress and setting up a blog. Someone would then have to update the blog to keep it up to date. WP is powerful and easy to use.

It’s not hard to setup. There are many tutorials out there, both written and video.

3. DIY - You Have Limited Control

Your final option would be to set up a blogger.com account. They are a free blog hosting platform. Blogger hosts and provides you with a domain for free. There are no costs to use Blogger.

The biggest drawback would be that you don’t control your site. You could be banned at any time for violating their TOS. There are probably restriction to what you can do with an account. However, you shouldn’t have any problems.

Another problem would be if you wanted to take your site off Blogger and use your own domain, you can’t. They control the site.

There You have it. Building your own website can be done. And it can be done cheaply if not for free. Don’t be afraid, just get out there and get it done.

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How Build a Website

February 6th, 2008

If you were wondering how to build a website just like a caveman would ask “how build a website”, you are overestimating the difficulty of building one. Software has come a long way and it can be easy to setup your own website today for little cost.

The easiest and cheapest way to set up a website is through a blogging platform. WordPress is the biggest and best blogging software out right now. Best of all, it’s free to download and use.

Installing WordPress can be a little intimidating, but there are lots of tutorials out there that walk you through the process step by step. There are written tutorials and video tutorials. I search on your favorite search engine will bring up lots of them.

The only other thing you need to setup a blog is somewhere to host it. For a personal blog there are shared hosting plans out there and dedicated hosting plans. For a personal blog a shared hosting plan will be good enough for your needs.

If your willing to give up control of your website and are looking for a nocost solution, then you should look at Blogger. Blogger will let you set up a blog on their servers for free. The only problem is that your site is controlled by them and if you ever want to leave with your site, you can’t.

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OEM vs Retail

February 5th, 2008

You may be wondering what the difference between OEM vs retail is. You may be temped to buy OEM software or hardware, but be aware of the differences between the two. Sometimes it’s worth it to save the money, sometimes it’s not.

OEM stands for Original Equipment Manufacturer and is mostly utilized by big corporations like Dell or HP. These versions are often cheaper than their retail counterparts, but have restrictions on them.

Software

OEM software is available for system builders. A system builder can be you if you buy certain components such as a motherboard, harddrive, and RAM. The software will state it’s restrictions with it.

These products have limited packages, cannot be returned, do not provide support from the manufacturer. Microsoft OEM products are common and easily obtainable. Microsoft OEM operating systems are tied to the motherboard. Meaning that you cannot transfer the software to another computer. Also note than you cannot upgrade a Microsoft 32 bit OEM OS to a 64 bit one. If you want to upgrade to 64 bit you must buy another OEM copy for 64 bit or buy the retail version

Hardware

OEM hardware is even more obtainable and can also save you money. There are no restrictions to buy or transfer it. These products come with limited packaging, limited support, and a shorter warranty. In the case of an OEM cpu, the OEM version may only come with a 90 day warranty as opposed to a 3 year one. In addition this version will not come with a heat sink, requiring you to buy an after market cooler.

I try to buy OEM whenever I can. I act as my own support. If I have a problem, a few searches online will find me an answer and computer components rarely have failed on me within their warranty period. Don’t be afraid of OEM, save yourself the money.

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UPS Question

February 4th, 2008

I was asked about an UPS today. No not the United Parcel Service, an Uninterruptible Power Supply used to protect electronic components. You should definitely have an UPS if you don’t have one already. A $10 power strip is likely not protecting your computer adequately.

The question was in regards to how his UPS worked. He was under the impression that half the plugs were for battery backup and half were for surge protection. I will give a little information on how a UPS works here.

All the plugs on the unit are for surge protection. Of those plugs, some of those will also be attached to the battery backup to give you a few minutes to properly power down your computer in the event of a power failure.

It’s pretty simple really. Plug in your PC and Monitor into your battery backup slots and plug in non-essential things into the surge protection slots. These things include objects like lamps, printers, etc.

I imagine that a lot of blown power supplies occur from PC’s not being plugged into a quality surge protector or just plugged into the wall.

Another thing to realize that the wattage of your power supply doesn’t effect the wattage of the UPS needed. What matters is how much power your PC is actually using. A low end computer will pull 200+ watts. A high end computer will start pushing closer to 500 watts. There are plenty of power usage calculators on the internet if you want to figure out how much your PC uses.

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Japanese Toilet Bowl Instructions

February 1st, 2008

Check out the instructions that came with my “Western Style” toilet that I just bought off the internet:

I know that squat toilets are common in Japan. But so are western style toilets. I laughed when I saw the instructions. Maybe the people over there need them.

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E8400 Overclock

January 31st, 2008

The Intel e8400 has been out of a little over a week now and we’re seeing a lot of overclocking results. So far, the results are pretty good. Those of you looking for a top of the line processor with good overclock potential need look no further than the e8400.

The cpu will overclock from 3.6ghz to 4ghz on the stock cooler. Personally I would only do 3.6 or lower on the stock cooler. If you want to oc to 4ghz or higher go with an after market cooler.

The cpu vcores have been in the 1.3v to 1.4v range for 4ghz. So expect a little less for a lower oc and a little more for a higher oc. Temps are a little high. There are lots of readings in the 60’s. Could be a problem with the cpu’s readings or the software. Or maybe these chips aren’t as cool as everyone thought they were going to be.

If you’re an early adopter, then it looks fairly safe to jump on the wagon. Personally I like to wait for the next revision and for prices to drop down. This also gives me the advantage of seeing how the cpu’s play out.

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Crashing Problems When Gaming

January 30th, 2008

There are a few steps that you should take when you are having crashing problems playing a PC game.

1. Make sure the game has been updated to the newest patch.

PC games sometimes have problems with a specific video card.  There bugs are then fixed with patches to the game.

2. Make sure your video card drivers have been updated with the newest drivers.

Most of the time your card will perform best with the newest drivers.  This isn’t always the case however.  Sometimes the newest drivers will cause problems with a game.  If the newest games doesn’t work and you have eliminated the other 4 options, then install an older driver, or try a 3rd party video card driver.

3. Check to see if your video card or cpu is overheating.

Heat is a main enemy of computer components.  Heat will cause artifacts in your games.  Heat will also cause the game or computer to crash.  Make sure you don’t have dust clogging up your fans and heat sinks on both your video card and cpu.

4. Make sure your PSU is powerful enough to run your video card.

Before you buy a video card make sure your PSU has the proper watts and +12 volts.  An underpowered video card may have problems running correctly.

5. Bad memory may be making your PC games to fail.

Run memtest on your RAM to make sure it is running correctly.  Memory does go bad and when it does it causes system instability.

If the errors happen right away, the problem is more likely to be your memory, video card or power supply.  The longer it takes for the problems to show up, the more likely the problem is to be a heat issue.

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Hard Drive Suggestions

January 29th, 2008

As with all other computer components this answer depends on your needs as a user. If you are surfing the net and using Microsoft office, then a 250 gb hard drive will be plenty for you for years to come.

If you do some gaming, then it is suggested that you get at least a 320 gb hard drive. Games are not taking up 10 gb or more of space and will only get larger in the next few years.

If you store a lot of movies or other types of data on your computer, you should look at the 500 gb hard drives. These drives will give you the best bang for the buck in terms of price and storage.

You may want to consider getting 2 hard drives. It can be useful to have a smaller hd for your operating system and must have programs. You can then back this up and store the backup on your data drive, on DVD’s or external hd.

Your second hd can then be used for all your games and storage needs. For most heavy computer users this convenience is well worth the cost of another drive. You should be backing up your computer at least once a month. And having 2 drives makes this a lot easier.

You should also look at buying a hard drive with the longest warranty. Hard drives are more prone to failure than other computer parts. A longer warranty will save you a few bucks if you have to replace yours because it died.

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Buy Computer Components Online

January 28th, 2008

Here’s a tip that the average consumer doesn’t know.  Buy your computer parts online.  Most people go to Walmart, Best Buy or their local computer store to buy computer components.  Sure they get the part right away, but they are paying for the convenience.

You will more often find the best prices online.  Stores like Newegg, Mwave and Buy.com have good prices and are reputable retailers.  Shop around and compare prices of these stores.  Often one or the other will be having a sale or rebate on the component you are interested in.

Don’t think that going to bestbuy.com will get you better prices either.  You get the same overpriced stuff with all the hassle.  Deals are these big box stores are few and far between.  If you want or need something soon, order it online and wait 3 days for it to come.

For example the 8800gt at best buy sells for $300.  You can get the same card from Newegg for $260.  $40 savings is significant in my book.  This is a common occurrence, as the markup for big box stores is high.

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4 GB of Ram With Windows

January 25th, 2008

There is a lot of misconception going on with the ram limit with windows operating systems. Some people think the limitation has to do with Windows XP or older operating systems. However, the age of the OS has nothing to do with this. There is all kind of high tech reasoning to explain how much ram is recognized, but I’ll just give you the quick cheat sheet.

There are 32 bit and 64 bit operating systems. Both Windows XP and Windows Vista have versions of both. 32 bit operating systems cannot use more than 4 gb of total ram. This includes the memory used by your cpu, video card, etc. Anything more than 4 gigs will not be recognized by the operating system.

So if you are running a 32 bit system and have 4 gigs of ram, 3-3.5 gigs of ram will be available to your system depending on how much ram your video card has. If you want to use all 4 or more than 4, you need to upgrade to a 64 bit version of your OS.

Keep in mind that 2 gigs is fine right now for almost all tasks. In the next 1-2 years, you will want 4 gigs. Two years from now you will start wanting more than 4 gigs of memory, which means you will need a 64 bit OS to use it.

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Dual Core or Quad Core

January 24th, 2008

I’ve been asked a lot of questions about the new Intel Wolfdale and Intel Yorkfield processors. Basically the questions are boiling down to whether one should get a dual core processor or a quad core processor. Here are a few rules of thumb to help you answer the question. It’s simple one you think about how you will be using your computer.

Wolfdale – Dual Core CPU– E8xxx

- best for most PC games for the next 1-2 years
- more cost effective route if planning to upgrade CPU in next 2ish years
- most software today is optimized for dual core

Yorkdield – Quad Core CPU – Q9xxx

- best for extreme multitasking
- more “futureproof” if not planning to upgrade in next 2ish years
- best for video encoding and audio encoding
- future software will be optimized for quad core

There are only 2 reasons I see for getting a Yorkfield over a Wolfdale. The first one is if you do lots of video encoding. The second is if you don’t plan on upgrading your CPU for 4 or more years.

If your looking for a gaming CPU go with the Wolfdale. Chances are you’ll be upgrading your CPU in a couple years anyway. So save your money now and then get a quad core when you upgrade.

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About Your Finances #2

August 13th, 2007

Welcome to the second edition of About Your Finances. The first carnival was a huge success and this weeks looks to be bigger:

Jimmy Atkinson presents Everything You Need to Know about Marriage and Money posted at Ask the Advisor.

Rachel Langston presents OSAs are MVPs posted at My Money Thinks.

Warren Wong presents Stop Checking That Stock posted at INTJ Personal Development.

Sagar Satapathy presents All You Need is Love and a Good Financial Plan: 17 Finance Tips from the Beatles posted at Credit Card Lowdown.

KCLau presents Investment Replacement Feature in Investment-linked Policy that Beat Unit Trust posted at KCLau’s Money Tips.

Dean presents Top 10 Best Bargain Fast Food Meals posted at Mr Cheap Stuff.

SpiKe presents Determining Value For Money posted at Organize IT.

T. Pettinger presents What can we learn from the US Sub Prime Mortgage Collapse? posted at Mortgage Blog.

Career Counselor presents Can I Make Money as a Blogger? posted at: ask the CareerCounselor.

Steve Faber presents - Did You Just Get a Free House? posted at Debt Free.

Super Saver presents Stock Market Musings - What To Do? posted at My Wealth Builder.

Matthew Paulson presents Ten Ways to Earn Extra Cash When You’re in a Crunch posted at Getting Green.

John Crenshaw presents Top 3 Reasons Mortgage Rate Shopping Will Kill You posted at Truthful Lending dot Com.

FitBuff presents Free Water, What a Novel Idea! | FitBuff.com’s Total Mind and Body Fitness Blog posted at FitBuff’s Total Mind and Body Fitness Blog

Babak presents Stocks Above 200 Moving Average Provide Perspective posted at Trader’s Narrative.

James Carr presents Entrepreneurship posted at Casual Science.

Mike Carpenter presents First Steps to Buying a Home posted at The Mortgage Bullet.

There you have it. Don’t forget to link to the carnival. See the carnival rules for details. See you next week.

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About Your Finances #1

August 5th, 2007

Hi everyone and welcome to About Your Finances #1 blog carnival. I’m very excited to get this first edition posted. We have a total of 13 submissions. Below you will find some very good info. Now on to the carnival:

WBL presents Why Getting A Home Loan Might Become More Difficult posted at Wealth Building Lessons.

Babak presents 12 Reasons Why This Is A Buying Opportunity posted at Trader’s Narrative.

SengAun Ong presents Daily Expenses Sheet Template posted at Tipskey - Unlock Practicality.

Big Cajun Man presents Bill Surfing The Next Generation posted at Canadian Financial Stuff.

Steve Faber presents - Investment and Employment Strategies - Plan for Success in Both posted at Debt Free.

Millionaire Mommy Next Door presents Some Fast Food For Thought posted at Millionaire Mommy Next Door.

George Courtney jr presents Finding the Right Investments for a Truly Diverse Portfolio posted at The Authentic Bartender Blog.

Alvaro Fernandez presents Lifelong Learning for Top Performance posted at Brain Fitness Blog.

ispf presents You are Probably Paying Too Much for Your Cable posted at Grad Money Matters.

George Courtney jr presents Despite Volatility, Stocks Are a Good Deal posted at The Authentic Bartender Blog.

Jamin presents How to Manage your Finances with a Spreadsheet posted at WondR.net.

Shenya Python presents Cash is King posted at CashAholic.

I excluded a handful of submissions from the carnival. Some of them were spam or had no content. Others were not recently written. I will be posting a rules page up soon. For now don’t forget to link back to this post so your readers can check out the carnival. I hope to see you all next week.

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Increasing Your Blog Revenue

August 2nd, 2007

I constantly see people asking on forums and blogs about if certain revenue streams make money or are worth doing.  They then usually go on to ask how they perform against other programs out there.

What these people don’t realize is that the only way to get the real answer for this question is to try the programs out themselves.  This is because every situation is different.  What may work for one web site, may not work for another.  And vice versa.

For example one of my websites I had tried Adsense and YPN for sources of revenue.  They both performed horribly.  Instead of going around asking if so and so worked better, I just tried them.  After a couple tries I found a program that performed well on my site.  In fact in one month it has made as much as I had made in the last year with Adsense and YPN.

This is not to say I haven’t wasted my time on some things.  I have.  My sites have sent 100’s of visitors to programs that I didn’t receive a dime for.  Others however, have made me and extra $1000 a month.

If you really want to improve your bottom line with your web site, don’t ask how to do it.  Test some things out.  This is the only way to find out for certain.  Sure, you may lose some money in the short term, but you will make money in the long term if you find a program that performs better that what you are currently running.

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Only The Uninformed Pay Annual Credit Card Fees

July 31st, 2007

Like every other financial industry out there, the credit industry is highly competitive. These companies fight an everyday battle to attract customers. And this battle is raged with their credit cards.

There is absolutely no reason to pay for a credit card. Almost all, if not all, of your cards should have no annual fee attached to them. Why people pay an annual fee for a credit card is beyond me.

What is the best way to get a free credit card? The best way to receive these offers is to have a good credit score. You see, your credit information is being accessed all the time by credit companies looking for new customers. Almost everyone gets credit card applications. But the people with the best credit scores get the best offers.

When I was first building my credit I would get the standard credit card offers in the mail. These of course had annual fees and unimpressive perks. After a time of being financially responsible with my credit the offers began to improve.

Over the month I noticed:

- the annual fees dropping
- the credit limits being offered increasing
- the perks increasing

Eventually I all but stopped receiving applications with annual fees. The offers I was receiving were far better than the previous ones. There is no secret here. The terms you are offered are based on your credit profile.

Now if you have a good credit history and are really interested in more than a free credit card, you should do some searching for good offers. There are many financial websites out there that frequently post good credit card deals. All you have to do is check the forum everyday and wait for a deal to pop up.

The two main forums I check on for good credit card deals are fatwallet.com and slickdeals.com. Here great offers pop up often. What kind of deal can you get? Well my last card I got has no annual fee, 0% interest for 6 months and I received $250 in rewards money for signing up for it.

I’d do a lot for $250. Checking up on a forum is nothing.

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Is The Michael Vick Dog Fighting Saga Really A Racial Divide?

July 27th, 2007

Now that the Michael Vick dog fighting saga is really starting to heat up, we are beginning to see the “twistings of truth” that are common place in this situations. On July 26, 2007 Dan Wetzel of Yahoo Sports wrote an article about the scene that played out in front of the court house that is handling Vick’s trial.

The author writes about the racial divide that is surrounding this issue. In the article Wetzel discusses how whites have already convicted Vick and about how blacks say that someone accused of a crime is innocent until proven guilty. It is pretty clear that he is saying that both side’s opinions are racially based.

While the article is seemingly unbiased and thought provoking, it is in fact flawed by its lack of attention to detail. Let’s examine more thoroughly the powers and demographics that are taking sides on this issue and see how racially divided this really is.

There are a few issues that need to be looked at here. This issue is not as black and white as Wetzel would like you to believe.

The Protester Side:

Wetzel leads you to believe that the white protesters at the courthouse are all racists. If say for instance a white NFL Quarterback had been accused of the crime, then they wouldn’t be there.

Sure that could be one reason. All the whites there could be racists and are chomping at the bit to lynch a black man; especially a highly successful black athlete who is tarnishing their view of a perfect white power society.

Or they could be PETA supporters who would be there regardless of who was accused of this crime. Could it also be that PETA supporters also tend to be white middle class Americans? Would it not therefore be logical that more whites would tend to be there protesting?

Could another reason for the lack of blacks on the protestor side be that they tend to think that “the system” is designed to keep them down? Just as they supported OJ when it was clear he was a murderer, they are supporting Vick with blind loyalty.

It is pretty clear that PETA supporters do not care who is violating the rights of animals. There have been many high profile whites they have gone after. They aren’t a racist organization by any means.

The Innocent Until Proven Guilty Side:

This side was made up of mostly blacks. Why are they there? This is the only part of this issue that can be explained by race. If Vick was white, they wouldn’t be there. Are blacks supporting NBA referee Tim Donaghy saying that he deserves a fair trial? Would they if he was black?

You see, this side isn’t really the innocent until proven guilty side. They aren’t the defenders of the constitution. They are the side that feels oppressed by “the system” and think every time a person of color is charged with a crime it is because they are colored not because there is credible evidence to go to trial.

Message To The Media:

Please think things out next time you decide to write about some kind of racial divide. You are only making the problem worse. This issue has nothing to do with racism and everything to do with the violation of animal rights. The vast majority of whites wouldn’t care who was in Michael Vick’s shoes. If it was Brett Favre, he would be getting the same treatment.

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I Don’t Know Jack

December 21st, 2006

I realized something the other day. That of course was that I know a lot about business, finance and this world. And then it hit me. I also don’t know jack about all these same things. It’s kind of a paradox really. We all think we know so much, but when you compare yourself to what you knew 5 years ago, you will realize how much more you know now. Or how little you knew then.

I’m 28 now and have been around. I served 4 years in the USMC, being posted in Okinawa, Peru and Turkey. I’ve seen a lot of the world and had a lot of experiences others have not had.

I’ve also started my own home based business building web pages that has allowed me to work from home. It is doing so well that I have time to work on other business ideas that I have rattling around in my head.

I am a happily married man and a homeowner. I have 2 cats and 2 dogs that I have learned a lot from. There are many experiences I have grown from by having them happen to family members. There have been lawsuits, infidelity and deaths.

All of these experiences make me feel like I know how the world works. Which is exactly the same way I felt 5 years ago. If I were to compare what I know now to what I knew then, it wouldn’t even be a contest. And guess what? When I do the same thing in 2011 it will be the same situation.

The thing is that we are constantly learning and growing as people. If we are lucky we will do so for all of our lives. We will never reach a point where we know everything. Because there is just too much out there to experience.

Realizing this has been very humbling and has helped me in my pursuit of personal and financial success. Knowing that I only know a fraction of what is out there motivates me to find out the undiscovered parts of life.

I don’t know Jack, and I’m proud to announce it.

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How To Make Money Reselling New Console Systems

September 19th, 2006

If you know that something is going to happen, you can make money off of it.  This fact is something that many people take advantage of when a new console system is released.  I decided to try out for myself with the release of the XBOX 360.

How can you make money when a new console system is released?  Supply and demand.  If you identify that the new system is going to fly off the shelves and sell out, you know that the price is going to go up. 

People are going to be willing to pay more for the system because their kids really want the system and can’t wait for it.  Other people are going to want it for themselves and can’t wait for more to be produced.

The XBOX 360 sold out pretty quickly creating a sellers market.  If you checked the prices on ebay a couple days after the system was released, you saw that the systems were selling at $100’s over the retail price.

I didn’t buy a system on the release day.  However, I was able to snag one a week or two after at Costco for $517.  It was the premium XBOX 360 bundle with 2 games.  I then listed the system on craigslist and sold it for $650 a week or so later.

It probably took me 2 hours total work to buy, list, sell, and deliver the system.  After taking into account gas money, I made $125.  That works out to be $62.50 per hour, not bad at all.

Here are a few tips if you decide you want to try this yourself with the upcoming PS3 or Wii.

- Buy the console somewhere you know you can return it if the system doesn’t sell.  Costco and Walmart have outstanding return policies.
- Know the rules for selling on ebay if you plan to sell it there.  There are lots of scammers looking for easy targets.  If you’re not careful, you can easily be scammed and lose your system.
- If you plan to sell locally, accept cash only.  There are lots of scammers in your home town also.  Many will try to give you a fake money order or check for your system.
- Meet in a public place if you are delivering the system.  I used a grocery store in a good part of town.  You might want to bring a friend with you.  You never know who might show up to “buy” your system.
- Undercut your competition in price.  There will be many people trying to do the same thing as you.  Sell the system for $25-50 cheaper than the other sellers to make sure you aren’t stuck with the system.

My reselling of a new console experience was fun and interesting.  Make sure your’s also ends well by having a plan and protecting yourself.

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4 Year Anniversary of COV and Summer Sales

September 15th, 2006

The COV is 4 years old and has done a little write up on 9 of the contributors who are still blogging today.  It’s amazing that these guys are still blogging 4 years later.  I hope to be blogging 4 years later also.

You can find the Carnival of the Vanities #208 here:

http://www.firstcarnival.com/?p=36

There are lots of good articles on the FOF this week.  Be sure to read the one on buying stuff that goes on sale at the end of summer.  If you plan ahead, you can save yourself some money.

You can find the Festival of Frugality #39 here:

http://www.getrichslowly.org/blog/2006/09/12/festival-of-frugality-39/

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Banks Want To Loan You Money

September 14th, 2006

I’m getting ready to make an offer on my first house in a couple days.  In preparation for that I’ve been looking into my financing options.  Anyone who is in the mortgage business can tell you, financing more often than not is a tricky process in home purchases.

My case is no different.  I have to do a no documentation loan because I am having documentation issues.  You see, I’m self employed and have been so for less than 2 years, so I don’t have 2 years of tax returns for the lenders to look at.

A no doc is not really an issue for me as I’m not as concerned about the interest rate on the loan as others might be.  Take a look at http://www.myquo.com/my-plan-to-buy-a-house-in-6-years/.  Since I will be aggressively paying off the mortgage, a higher interest rate will not cost me as much money as a 30 year loan would. Plus, I always have the option of refinancing at a lower interest rate in the future.

I was stressing myself out about my ability to get a mortgage however.  I was afraid that lenders would not want to loan out money to me and that I wouldn’t be able to buy the house.  Fortunately, a friend of mine fixed my view on the matter.

It is important for everyone who is seeking a loan to realize that: banks want to loan you money.  In fact, loaning people money is what their whole business model is based on.  Once you get it in your head that the bank wants to sign you to a loan, you will be realize that you are in the drivers seat.

I originally was going to do my mortgage through Navy Federal.  I was looking for a 100% financing, no documentation loan.  The best they could offer me was a 80/10/10 loan.  That means that I would have to come up with a 10% down payment.  This was something that would be very hard for me to do.

The solution was simple, go work with another bank.  You see, just like many sectors of our economy, the banking industry is very competitive.  Just because one bank is not willing to give you a loan, does not mean that another won’t also.  The reality is that most loans can be done.  It all comes down to how much you are willing to pay for it.

My buyer’s agent has recommended a couple of lenders to me.  Both of which are willing to offer me a 80/15/5 loan.  Although I was hoping to get a loan with 0% down, I have no problems with a 5% down loan.  I’ll probably end up with a better interest rate with a 5% down loan anyhow, so I should be better off in the long run.

Realizing that I was in the driver’s seat in the loan application process has helped me greatly.  Once you realize you are in the driver’s seat also, you will find that the process is a little less stressful.

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Borders Book Store Coupons And More

September 13th, 2006

My wife and I are avid readers and one of our favorite things to do is go browse in a book store.  Buying a new hardcover book is something that we both enjoy.  The problem is that these books are very expensive.  Luckily for us, we found out that we can often get these books for 25-30% off using coupons.

I didn’t even know that a major book store chain like Borders would offer coupons, but they do.  In fact, they regularly offer a 25-30% off coupon on 1 book.  Considering that many hardcover books cost $20, a 30% savings equates to a $6 savings.  Saving $6 for a few minutes of searching is well worth the effort.

So where do I find my Borders coupons?  I do a search for them at fatwallet.  They pop up frequently so keep checking.  There are many coupon sites out there, so you may have some luck searching there also.  Here is a link to a post on fatwallet on 9/7/06 for a 30% off coupon:

http://www.fatwallet.com/t/18/650701

Do you spend more than $200 at Borders every year?  If you do you should really consider getting a borders rewards card.  With the rewards card 5% of purchases go into a holiday account.  When your account reaches $10 you can use that towards your next purchase.  It’s not a lot of money, but it’s a free $10 if you are going to buy the books anyway.

Believe it or not there is actually a Borders Visa rewards credit card.  If you do a lot of shopping at Borders you may want to consider getting the card.  This is because this card is a 3/2/1% cash back credit card.  The 3% cash back applies to purchases made at Borders.  Just so you know, 3% is a very good percentage for cash back.

The credit card is not a bad card to have at all.  This is especially true if you purchase a lot of books.  There is no annual fee and they are running a promotion right now that gives you a $20 Borders gift card and 1000 bonus points on you first purchase if you sign up.

If you really do spend a significant amount of money on books every year you should consider the coupons, rewards cards, and credit cards that Borders offers.  If you don’t take advantage of these programs, you are leaving money on the table when you leave the store.

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Home Sellers Only Show You What They Want You To See

September 12th, 2006

When house shopping it is important to realize that home owners only show you what they want you to see of their homes in their ads.  That is, they make sure to show you the houses pluses, but fail to show you any detractors the home may have.

My wife and I used the Internet to look at dozens of houses, if not hundreds, over the last 6 months.  During this time there have been numerous occasions where the owner of the home intentionally left out critical information on a home.  Information that if disclosed would surely have turn us off as house buyers.

Here are some examples of things that were hidden or lied about:

- Unfinished basements were included in the square footage of the house.  Giving the impression that the house was larger that it really was.
- A mobile home graveyard was across the street from one property.
- A wet weather creek ran right behind one home, which put it in danger of flooding every time in rained.
- Wide angle lenses were used for the pictures taken of the houses.  This gave the appearance of larger rooms.
- A roof was described as a “Newer Roof” when it had been re-shingled 3 times.  A roof can be re-shingled a maximum of 3 times before it has to be totally redone.
- Poor patch jobs of “fist size” holes in the walls was not disclosed in the ad.  The house was described as being well taken care of.
- Pictures were carefully taken to give the appearance that a kitchen had an attached dining area.  When in fact the dining area was squeezed into the kitchen.

The list goes on and on.  It is essential that you think about what you see in the pictures of the property ad that you are looking at.  Looking for items that are in multiple pictures can help you gauge the true size of rooms.  Taking a tape measure and looking at the room dimensions in your home will also give you an idea of how large the rooms actually are.

Being skeptical of what you are being told in the ads will help you make a more informed choice about what properties you choose to look into further.  If you don’t, you will waste valuable time pursing properties that you could have eliminated from your search by digging into them a little.

Don’t just take what you are told as the truth.  The owners will be putting their home in the best possible light.  You need to be looking out for what the property really is like.

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How To Pay Off Student Loans

September 11th, 2006

I get a lot of traffic to MyQuo.com from people looking how to pay off their student loans.  It is as if people think that there is some magical trick that will pay all of your education loans off for you.

There is no trick, no magic pill.  The only way to pay off your student loans is to pay them off.  The real question should be, “How do I find the money to pay off my student loans?”  Now that is a good question and if you are asking it, then you are on the right path.  After all, asking the right question is the first step to finding a solution to the problem.

Many people think that the problem is not having enough money.  The reality is that most people have enough money to pay off their bills.  The real problem is that they are spending too much money.  How much money are these people spending on clothes, Starbucks, eating out, clubbing, drinking, etc every month?  I’ll bet you that it is a significant portion of their budgets.

The #1 reason why people have a hard time paying off their bills is because they don’t live below their means.  They are so busy spending all of their money that they don’t have anything left to invest or to pay down their debts.  No amount of money is going to fix this problem.  The more money that comes in, more that goes out.

The solution to “how to pay off student loans” is just as easy as the problem.  People must learn to live below their means.  The first thing you need to do is create a budget.  You need to know where all of you hard earned dollars are going.  This is an essential step, so don’t skip it.

Once you have a budget, you should be able to identify areas that you can cut back on.  There will likely be a few areas when trimmed that will save you a couple hundred dollars a month.

Have you ever noticed that when a corporation begins to struggle they cut costs?  That is exactly what you need to do.  You need to cut costs.  If you start treating your finances like a business, you will be in good shape.

Make no mistake, the only way to pay off your student loans is to actually pay them off.  Trimming the fat in your budget is the quickest and easiest way to find the money to pay the debt off.  And after making your budget, you should find that the trimming didn’t hurt too much after all.

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TamsPalm and Aridni

September 8th, 2006

Looks like I made the cut for this weeks Carnival of the Vanities.  Only 14 posts made the cut.  Which makes me very happy to say I was one of them.

There is a good post by Aparna on there about napping.  Be sure to check it out.  I’ve found that short naps can be very helpful with getting me through some days.  Try it out and you may be amazed at how refreshing a short nap can be.

http://tamspalm.tamoggemon.com/2006/09/06/carnival-of-the-vanities-207/

There are 50 posts on the personal finance carnival this week.  Make sure you read the submittion by HJL on dividends.  It is well worth the read.

http://aridni.com/2006/09/carnival-of-personal-finance/

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Don’t Let Inflation Bite You In The Rear

September 7th, 2006

A few days ago I had my neighbor complain to me about the recent rent increase in our apartment complex.  The rent was increased from $1100 a month to $1125.  That $25 increase was preceded by a $25 increase 6 months ago.  From what I’ve seen, the rent has been systematically increased twice a year for $25 each time.

As he complained about how he cannot afford the increases in his budget, I couldn’t help but to think that this is his fault.  How is it his fault you ask?  Well, it’s his fault because he hasn’t planned for these increases in his budget.

Let’s face it, inflation is not going away any more than death and taxes.  In this case, the owner of the apartment complex has expenses just like everyone else.  The owner has bills, taxes, and employees to pay.  These expenses are going up for him, which means your rent to him has to go up to cover the increases.

As such, you must account for inflation in your budgets and retirement planning.  In America, the inflation rate is about 3%.  That means everything will get 3% more expensive every year.  Remember that nothing is safe from inflation.  Every single thing that you buy is going to cost more in the future.

What this should tell you is that you need to be making 3% more money every year to cover these increases.  Because if you don’t, you will find that you cannot keep up with your current standard of living.

There is a very important point here and you should be sure to grasp it.  You must always be growing your income streams to keep up with inflation.  I cannot stress this enough.  There are millions of Americans out there living on fixed budgets.  These fixed budgets are like having a bag with holes in the bottom.  They will only continue to shrink unless you refill them.

I constantly hear people complain about how their bills are going up.  I just accept it and know that I can pay for the increases because my income streams are increasing.  People would be much better off finding ways to make the money to pay the bills than by complaining about how high they are.

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Push Your Limits

September 6th, 2006

Many people get in a rut in life.  They go to work, play a little, and go back to work.  It is the same thing day in and day out.  For these people, they are in a comfort zone and in my opinion, not growing as a person.

Personally, I try to find new things to learn and experience that will push my limits.  Here is one good example from a few years back.

Back in 2002, I had just gotten out of the Marine Corps and started taking classes at a local community college.  I decided that I wanted to try something new and take an acting class.  I knew that this class would push my boundaries, as it was something that I had never done before.

The class totally pushed me.  I had to improvise, adapt, and overcome in ways that I had never done before.  Actors view the world in a totally different way than other people.   For example, they are much more in-tune to their body and soul than most people.  The insight I gained from the experience has been invaluable to me even today.

I decided to take it one step further and join the college play production that was going on.  Wow, did that even push me even more.  We were rehearsing for 40 hours a week and still had our studies to keep up with.  I had no idea that being in a play was so much work.

One of the most valuable things that I learned from my play experience was the leadership skills from the play’s director, Bree.  She drove us very hard and much of the play’s success was because of her.

Here are some of the skills that Bree demonstrated that I learned from:

- dealing with people from all walks of life
- taking care of medical emergencies
- taking input from the people under her
- practice makes perfect
- injecting humor to lighten up the mood
- being professional

In the end I improved many skills that apply to the business world.  Some of these include: understanding how people work, improvisation, and knowing myself.  Although I have no further interest in pursing an acting career, the experience itself was very fulfilling.  I would definitely recommend the experience to anyone.

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Choosing A House To Buy Is All About Tradeoffs

September 5th, 2006

House hunting has turned out to be quite the experience for my fiancée and I.  It can be hard enough for one person to decide on a house, but getting a couple to agree on a house can be a trying experience.  Fortunately for us, we are looking for basically the same thing, so this won’t be much of an issue.

Deciding on the right house is an issue however.  To make things easier for us we made 2 lists.  The first list was the criteria for our dream home.  The second was a list of the least amount of home we were willing to buy.  It is important to note that these lists should not be set in stone.  Because you may very well find that they are unrealistic.

Here is our dream house list:

4 bed
2 bath
.5 + acre lot
2000 + sq ft
open kitchen
basement (can be unfinished)
cul-de-sac
2 car garage
1960 or newer
No homeowners association
Here is our minimum home list:

3 bed
1.5 bath
.20 acre lot
1500 sq ft
1980 or newer
As you can see there is a good gap there, but not too much gap.  If we cannot find a house that finds in this gap, we’ll have to lower the minimum home list a little.

We also make a top 5 list of housing criteria that is the most important to us.  This is important because he helps you compare home by comparing them to the lists that you made.

Here is out top 5 criteria list:

1. price
2. sq ft
3. lot size
4. nice open kitchen
5. basement

As you look for houses to buy you will find that you will be comparing homes that have different things that you like.  One home will have a huge lot and an ok house, another will be at the end of a cul-de-sac and a tiny house, and yet another will be on a busy street with a awesome house and a small lot.

Having criteria established and written down will help you compare which house best fits you, if any fit at all.  Remember that a little preparation up front can save you a lot of time and headache later on in the house hunting process.

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The $20 Trick

September 1st, 2006

I recently learned of the $20 trick a week before my honeymoon trip to Las Vegas.  Basically the trick involves tipping the check in clerk $20 and asking for a room upgrade.  This is common practice and has worked for many people.  Below is my experience with it:

I arrived at the Tropicana with my wife at 2pm and saw that they were checking people into their rooms a little early.  Having been thinking about the $20 trick for a week, I was more than ready to try it out on our 3 night stay.  I took out my credit card, drivers license, and $20 bill, placing the 20 between the two.

Informing the clerk that I was checking into the hotel, I handed her the 3 items.  I made my move and asked, “are there are complimentary upgrades available?”  As she started to answer, I looked down and noticed that the $20 was sandwiched between the credit card and driver’s license.  So I very smoothly reached over the counter and moved the credit card so that the $20 was showing.

The clerk smiled at me and informed me that’s not necessary, but she left the tip where it lay.  I told her that I was on my honeymoon and wanted to do something special for my wife.  She then proceeded to offer me a free $20 per night upgrade.  From my research I knew that a suite upgrade was possible.  Especially since this was mid-week.  So I told her I was hoping to get a room with a Jacuzzi in the room.

The clerk left to speak with the manager for 3 minutes.  I got the feeling that she was trying really hard to get me the suite.  She came back and said that the best she could do was get me a discount on a suite upgrade of $75 per night.  This was down from $150 per night.  I politely told her that I’d pass on the suit and thanked her for trying.

The clerk ended up booking us on the 20th of 21 floors in a corner room overlooking the strip.  It was an awesome room, well worth the $20 tip.

Here are some observations:

- I was a little nervous as I walked up to the counter, but once I got the ball rolling, I was fine.
- The clerk acted like she had seen the $20 trick before.
- I was friendly, polite, and smiled a lot.

I can fully recommend trying the $20 trick out.  Although I did not get a suite upgrade like I was hoping, I saw that it was possible.  It just didn’t work out for me that time.  Maybe my clerk wasn’t shady enough or maybe the manager was in a bad mood.  Who knows?

For $20 I received $60 worth of room upgrade, a high floor and a corner room overlooking the strip.  Well worth the money, time, and effort.  It doesn’t hurt to try and you never know, maybe you’ll get really lucky and get a suite.

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A Key To Making Money

August 31st, 2006

There are thousands of people out there who are beating their heads against the wall trying to come up with the next big business idea.  The key to making money in business is knowing what is going to happen.

It’s a simple idea really.  Every time something happens on our planet there is an opportunity to make money off of it.  The key is to predict what will happen, before it will happen and to put yourself into a position to make money off of it.

The clues of future events are under all of our noses as we speak.  Although this is an easy idea, it can be a very hard thing to do.

Let’s look at some examples:

#1 - If you knew that oil demand would surge and that supply would not keep up, you could have made a killing.  The clues have been here for years.  It was no secret 10 years ago that China and India’s economies were growing quickly and predicted to grow for years to come.

These economies run off of oil.  Therefore demand for oil is going to go up greatly.  OPEC and other oil producing countries love the fact that oil is at $75 a barrel instead of $25.  They make 3 times as much money with the same amount of work.

If you saw this happening 5-10 years ago, you could have put yourself into a position to profit from it.  You could have bought oil stocks or oil on the commodities market.  People who did this have made a ton of money.

#2 – If you knew that most people in America would own a cell phone, you could have made a killing.  The clues were there.  If you take a look at history you would have seen how the telegraph fell victim to the telephone.  Well history repeated itself and the telephone fell victim to the cell phone.

Once again if you knew this was going to happen, you could have invested in the baby cell phone companies, which are now huge players in our economy.

The moral of this story is that instead of beating your head against the wall trying to think of ways to make money in today’s market, you should be trying to figure out what is going to happen next.  What is going to be the next big thing.  Look for the clues.  Study where the market is heading and what has happened in the past.

Most importantly, put yourself into a position to take advantage of where we will be in the future.

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Our First House – You Get What You Pay For

August 30th, 2006

It seems that my fiancée and I may have set our requirements too high for our budget.  Originally we were hoping to get a 2000 sq ft house with .5 acres of land for around $125,000.  There are houses out there that fit the bill, but are issues with these properties.

These big houses are only $125k for a reason.  That reason is that they have issues, major issues.  Here are some of the issues that the 1st house had:

- the unfinished basement was counted as part of the 2000 sq ft
- the house sat 5 feet away from a wet weather creek (in rain became a river)
- the house would likely need expensive flood insurance ($500 -1500 a year)
- there was a huge old ugly mint green barn on the neighboring property
- there was a 15-20 unit mobile home graveyard across the street

None of these issues are good for resale.  And none of the problems were mentioned in the listing.  Here are the issues with the 2nd house:

- the foundation was only 2 inches thick
- there were support beams through the middle of the living and family rooms
- the walls had poorly patched holes (looked like they had been punched out)
- the ceiling in the master bath was extremely low
- the roof had been re-shingled 3 times
- the deck felt like it was going to collapse
- the driveway needed to be repaved
- the house seemed like it had been abused by the owners

The problems with this house are that it needs $10,000 or more of work to be put into it.  Our budget is $125k, so the total cost of the house needs to be that amount.  These two houses are potentially nightmares.

In the first one we would be wondering if we were going to get flooded out every time it rained.  In the second one we would wonder when the foundation was going to crack.  These are not things that I want to have in the back of my mind.

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Are Buying Lottery Tickets A Waste Of Money?

August 29th, 2006

Has someone ever told you that buying a lottery ticket is a waste of money?  I’ve been told that by a lot of people.  Although I do think most gambling is a waste of money, I do not think buying lottery tickets has to fall into this category.

Let’s go over how buying scratchers and other forms of gambling are a waste of money.

The odds are in the house’s favor.  Which means on average you will end up losing more than you win in the long run.  Now if you’re gambling for recreation and are having fun, then you can argue that it is not a waste.  But financially, it is a waste.

Let’s take the best case scenario with a typical “big” win .  Let’s make it $10,000 to simplify things.  I’m pretty sure most people would be thrilled to win 10 grand on a scratcher or at the black jack tables.  However, this big win is not life changing in any way.  Sure you might be able to go on a nice vacation, or pay off some bills.  But your life will change very little.  In fact, you will slowly lose that money back to the house if you continue to gamble.

Now let’s look at the big time lottery games and why they are not a waste of money.

If you win one of these you will win millions if not tens of millions of dollars.  Yes, the odds are astronomical.  For example, your odds to win the Mega Millions jackpot are 1 in 176 million.  Not very good odds in anyone’s book.

Yes, you are likely throwing away a dollar each time you play the game.  But, it’s not as simple as that.  You have to look at the utility that that dollar would give you if you spent it one something else or invested it.

You could buy yourself a big chocolate chip cookie.  It would taste amazing for the couple minutes you are eating it, but the pleasure doesn’t last long.  You could invest that dollar and turn it into $17 in 30 years.  I hate to tell you, but $17 isn’t going to go very far in 30 years.  So you’re not going to get much enjoyment out of that one either.

Or you could spend it on a shot in the dark and possibly win the lottery, which would drastically change your life.  Being able to quit your job, buy a dream home, and travel the world are life changing.  I don’t think that anyone will challenge that.

When you look at the utility that $1 can bring to you, it is apparent that a lotto ticket is not such a bad buy.  Of course there is a limit to this reasoning.  If you are buying $100 worth of lottery tickets a month or more, then you are wasting your money.

This is because $100 a month properly invested can turn into tens of thousands of dollars, which can affect your standard of living when you retire.

However, we are not talking about buying $100 of dollars of lottery tickets a month.  We are talking about buying a ticket a few times a month or less.  And when you look at the utility of those dollars, 1 in 176 million doesn’t seem too bad after all.  Remember, someone has to win that jackpot.

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How To Find An Apartment Guide

August 28th, 2006

Moving is a fact of life in today’s society.  People move for jobs, to be by family, and to get away from family.  Finding an apartment that fits for you can be challenging.  You can fumble around to find a place to life.  Or you can have a plan.  Hopefully this guide will help save some time and help you make a sound rental decision.

#1 – Find some apartments listings

There are many listings on the Internet today.  There are a lot of rental sites out there that redirect to another site or have very few listings.  Here are a couple of the most popular rental source sites:

http://www.apartments.com/
http://realestate.yahoo.com/Apartments_for_rent
http://www.livingchoices.com/

#2 – Look up some apartment reviews

There are a lot of apartment review sites out there.  Unfortunately there are not a lot of reviews.  Here are a couple of review sites to check out:

http://www.apartmentratings.com/
http://www.apartmentreviews.net/

#3 – Check the demographics in the zip code the apartment is in.

You should also check out the area you are planning to move to.  Living Choices has an outstanding demographics tool at:

http://www.livingchoices.com/community/community.aspx?mid=7920

Just type in the zip code of where the apartment is and you’ll get all kinds of information.  Some types of information they provide are: median household income, geographical risks (earthquakes and the like), pollution, and crime rates.

Remember, you don’t have to go find an apartment without a plan.  The Internet has a ton of information on it, use it!

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Getting Married Over The Weekend

August 18th, 2006

This week I took part in the Carnival of the Vanities #204.  It was really well done and he made excellent use of pics in the post.  You can check it out here:

http://spookyaction.blogspot.com/

I won’t be updating myquo.com until next Friday, as I will be leaving for my honeymoon on Monday morning.  My wedding date has been a big secret, but if anyone I know has stumbled across my blog, now you know.  I look forward to writing about my financial experiences while in las vegas when I get back.

See you in a week.

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Deceptive Practices By My Cable Company

August 17th, 2006

Having wanted to get a DVR for the past year, I finally took the DVR plunge 4 months ago.  I excitedly hooked up my DVR and began to record my favorite tv shows.  Even better is the ability to pause live tv when my fiancée wants to discuss something in the middle of my favorite shows.

Imagine my surprise today when I looked at my cable bill statement online; my bill was $18 higher than it should have been.  After looking at the details, it seems that I had been charged with a HBO/Cimemax package.  A package that I did not sign up for, one that I did not even know that I had…

At first I thought they made a mistake and mistakenly charged me for the package.  After all, mistakes do happen.  But upon further digging, I saw that I was signed up for a “free” trial of the package when I signed up for the DVR.

The representative who signed me up mentioned nothing of the “free” trial 4 months ago.  Of course, it may have been in the fine print of the paperwork that I had to sign, I’m not sure.  I scanned through it and don’t remember anything about it.

Needless to say, I’m a little annoyed.  I guess it is common practice for the cable company to deceive its customers by sneaking “free” trial packages into their products.

When I called my cable company and explained the problem, they were happy to make a “one time credit” to my account to reverse the charges.  Which of course I thought was sweet of them since they were the ones who created this mess in the first place.

Let this be a lesson to you.  Be sure you carefully watch what the companies you are dealing with are trying to pull.  Don’t assume that they’ll just sign up for what you ask for because it’s likely that they’ll try to sell you everything that they can.

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Top 5 Keys To Success

August 16th, 2006

I am working on a new writing project which covers the top 5 keys to success of people that I know.  I’m lucky enough to have family and friends who run successful businesses.  Which of course means that I get to pick their minds for information.  I’ll start the project off with my top 5, with theirs following suit in the coming weeks.

Ian’s Top 5 Keys To Success

I run a small business out of my home consisting of 17 websites.  I have been doing this for the past 2 years and living fully off of the profits for the last 8 months.  Below are my top 5 keys to success:

#1 – Hard Work

People out there who are trying to make it rich with as little work as possible are setting themselves up for failure.  There is no substitute for hard work.  Even if you have the best idea in the world, if you do not put everything you have into it, it will fail.  It’s good to know that no matter how much things change, some things always stay the same.

#2 – Refuse To Quit

One of the main reasons people fail is that they allow themselves to fail.  When things get tough, they give up and make excuses why things didn’t work out.  The successful person however, refuses to quit.  They are stubborn and will diligently work towards making their idea successful.

#3- Seeing The Trends

Correctly guessing the trends of business is a key to success.  If you can see where anything in life is going, you can make money off of it.  If you know everyone is going to need a new gadget or service, then find out how to make money off of it.  Come up with something complimentary to the product or something that does the job better.

#4 – Know How Your Idea Stacks Up In The Market

You absolutely need to know where your idea stands in the market.  If you don’t know, then you will have no idea how much of a chance your idea has to succeed.  Maybe the market is not ready for your idea yet.  Or maybe your idea is too late and you already missed the ship.  Make sure you know!

#5 – Keep Thinking Up Ideas

You need to constantly be coming up with ways to improve your idea and think of other ideas.  This is because there are a million other people out there doing the same thing.  Business is cut throat and people will have no problem putting you out of business.

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Thinking About People’s Motives

August 15th, 2006

Yesterday I talked about why you should think about people’s motives.  Today I’m doing to give an example of how you can apply this to your everyday life.  You may be surprised at how beneficial this can be.

Recently my sister decided to sue her former property manager for screwing her over.  The lawyer is telling her that she can get all kinds of damages for lost rental income and lawyer fees.  Although he has a good reputation, it is still important to think about what he gets out of this.

Obviously he hopes to make money.  After all, suing people is his profession.  In this case, he is getting paid by the hour.  That means he gets paid no matter what the results of the trial are.  This is important to recognize.  If she doesn’t realize that he gets paid no matter what, she opens herself up to being screwed over by the lawyer.

What can she do about this?  There are a number of things she can do.  She can make sure things are moving along so that she is not paying endless legal fees.  She can get a second opinion from another lawyer to make sure her case is a strong one.

Another thing she can do that I particularly like is to offer the lawyer a percentage of the winnings from the case.  Say the settlement is likely going to be around $10k.  Offer the lawyer 30% of that.  If you win, you get $7k and the lawyer gets $3k.  If you the lawyer gets paid by the hour and you win, you would get $8k and the lawyer gets $2k.  You would make $1k less on the deal.

However, let’s look at if you lose.  If you have a 30% deal, you lose nothing.  On the other hand if your lawyer is getting paid by the hour and you lose, you are out the $2k in legal fees.

By going with a percentage deal, you lower the risk to yourself.  There would be no benefit for the lawyer to talk up the case or drag the case on.  It’s win win for both of you.

This is but one example of how looking at people’s motives can help you out.  Don’t sit there and just take their word for it.  Think about why they are telling you what they are telling you.  Finally think about how you can protect yourself.  Because nobody else is going to watch out for your welfare.

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Be Careful Who You Trust

August 14th, 2006

Have you ever had a friend who suddenly disappeared when things got rough?  Or how about one who stole your girlfriend or boyfriend?  I bet you have and it’s important to realize that these same people are the ones who you are doing financial matters with on a daily basis.

People get ripped off, either personally or financially, because they put their full trust into someone who wasn’t fully trustable.  For this reason, it is important that you be vigilant not only on the financial goals you go for, but for whom you decide to work with.

There are less than 10 people in my life that I really trust.  There are less than 5 who I fully trust.  I can sit here right now and name them off.  Can you?  If you can’t, take a minute and sit down and mentally make a list.  If you don’t, you may very well find yourself getting burned later on in life.

For every other person on the planet who is not on that list, you must take everything they say with a grain of salt.  Ask yourself these types of questions: Why are they telling me this?  What is their goal?  What do they get out of this?

People always have agendas.  Most of the time they are selfish in nature.  Which does not mean that they are bad for you, but it is good to know what they are.  Sometimes they can also be good.  On occasion people do things because it is the right thing to do.

Most often this is not the case however.  So in order to protect yourself, you have to be diligent thinking about people’s motives for their actions.  If you don’t watch out for you, who will?

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Our First House – What A Difference A Good Buyers Agent Makes

August 11th, 2006

As I mentioned a week ago, I had to fire my first buyer’s agent after 5 days on the job.  It seemed like all she was doing as little work as possible, while sitting there waiting to collect a fat commission.  Needless to say, I wasn’t having any of that.
 
Our new agent was assigned by Navy Federal from the same agency.  And let me tell you, what a difference a good agent makes.  On the first day that I spoke with her, she went out and looked at a property I was interested in.

She made insightful comments on the property and ultimately recommended that we not consider that particular house.  The communication, while a little slow, is good.  I get the feeling that things don’t move very fast in the market they are in.  Either that or my agent is extremely busy.

The agent made some suggestions on other parts of town that I might want to look at, but I stuck to my guns.  I’m confident in my research and am sticking to the areas that I selected to buy in.

There is an important lesson to take away from this.  Don’t be afraid to pull the trigger when making a decision.  Some people might say 5 days is not enough time to see if the agent is good or not.  I disagree.

When comparing the 1st 5 days of both agents, the differences are clear.  It would have been a big mistake by me to stick with the original agent and waste weeks or months of my time.

Remember that the buyer’s agent works for you.  If they are not performing, find someone who will.  They will make thousands of dollars on the transaction, make them earn it.

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My Fiancee’s Truck Was Broken Into Over The Weekend

August 10th, 2006

If you think your vehicle is safe sitting outside your home, think again.  Over the weekend my fiancee’s truck was broken into between 3pm and 5pm.  Not only that, the truck was parked right outside our apartment and we were home at the time.

The radio was stolen, and oddly enough, so was the owners manual to the truck.  The thief went through the glove box and the center console looking for other things to steal.  Thankfully, she does not keep anything important in her truck.

Here are a few lessons from this experience:

- Your vehicle is never safe from theft, even during the day.
- Your radio doesn’t have to be expensive to be a theft target.
- Never leave anything of value in your vehicle.
- An alarm may be a good investment even if you don’t own a BMW.

There was no sign of forced entry, so they must have used a Slim Jim or a Ford master key.  And yes, we are anal about locking our vehicles at all times.  So it was definitely locked at the time of the break in.

We went out and bought a new $45 el cheapo radio.  We had it installed along with a Viper alarm system on Monday afternoon.  It is important to recognize that a car alarm is only a deterrent.  There is no way to theft proof your vehicle.

Personally, at least I’ll know nobody is breaking into her vehicle while I am sitting in my own home.

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Understanding The Renting Out A Room Game

August 9th, 2006

Today while I was checking the mail I ran into a neighbor of mine.  He lives in the same apartment complex as I do and has been trying to rent out his 2nd bedroom for the last 3 months.  Every time I see him, I always make sure to ask him if he’s rented out his room and give him some advice on how he could rent it out quicker.

When I asked him today if he’d rented out his room, he said that he hadn’t again.  I decided to dig a little deeper into his situation and try to help me out.  After all, I like to help people and he obviously needed some help to get his room rented.

Here are the pertinent facts:

- his rent is $1100 for a 2 bedroom, 1 bath apartment
- he is trying to rent out the smaller room for $500
- the room has gone unrented for 3 months

Hopefully you see a major problem with one of these facts.  The room has gone unrented for 3 months!  He has cost himself a lot of money by not renting out the room.

There are two financially important things to think about when renting out a room in your home:

1. To get the highest rent possible for the room
2. To keep the room rented as much as possible.

Most people get so stuck up on trying to get the highest rent for the room, that they forget half of the game.  It is just as important to keep the room rented.  You get $0 rent when nobody is in there.  My neighbor is committing this common mistake.

Why should you be concerned about keeping the room rented as much as possible?  Let’s look at some numbers:

Scenario #1 – getting as high a price as possible

$500 Rent
6/12 Months a year the room is rented
Total Rent: $3000

Scenario #2 – keeping the room rented as much as possible

$300 Rent
12/12 Months a year the room is rented
Total Rent: $3600

Scenario #3 – maximizing your income through both price and occupancy

$400 Rent
10/12  Months a year the room is rented
Total Rent: $4000

As you can see, changing the rent price has an effect on how rented the room stays.  This is simple supply and demand.  If your room costs a lot of money, it will be hard to get people in there.  Plus they will leave when they find something cheaper.  If your room is a bargain, you will have people knocking down the door trying to rent your room and it will stay rented.

According to my scenarios my neighbor would make $600 more by dropping his rent $200 a month.  I guarantee the room will rent for $300.  You can’t find a bedroom this cheap in San Diego. 

Somewhere in the middle is where your maximum income lies.  In my neighbor’s case, I suggested that he drop the price if he wanted to rent the room.  He is losing out on hundreds of dollars as the room sits unoccupied.  Personally, I would rent the room for $400 and pick the cream of the crop from my potential rentees.

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Your Money Is Actually Shrinking In Your Bank Account

August 8th, 2006

So you have a $20,000 fund stashed away in your savings account for a new car.  Good, but did you know that this fund is not growing by the 1% savings rate in your account as you think it is?

It is actually also shrinking by 3% per year.  This is because of inflation.  Every year inflation eats away 3% of your money’s buying power.  Let’s look at how this works.

5 years from now your $20,000 will grow to $21,020 in your savings account.

5 years from now prices on goods and services will grow by 3% per year.  So in 5 years it will cost $23,185 to pay for the same goods and services that you could have gotten 5 years earlier.

Confused?  So am I.  Let’s break this down an easier way.

Say you had the option to buy a new car today and in 5 years with your $20,000 in your savings account.

Today the new car costs $20,000.  You write a check out for the car, which empties out your bank account.

Now say you leave your money in the savings account for 5 years.  5 years from now that money has grown at 1% interest to $21,020.  You go to the dealership only to find that an equivalent new car now costs $23,185.

As you can see inflation has raised the cost of this car by 3% per year for 5 years.  This is why the car now costs $3185 more dollars.

Your money on the other hand has only been earning 1% interest in the bank account for the last 5 years and is now worth $21,020.  You are now $2165 short for the same equivalent car you could have gotten 5 years ago.

Does this mean that you should go out and buy things with your money so that it doesn’t lose its purchasing power?  Of course not.  The point is that you have to be aware that of the fact that inflation is eating away at your money while it sits in your bank account.

Therefore you have to be earning at least 3% interest in your bank accounts or your money will be shrinking and not growing.

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The Arguments Against Prepayments

August 7th, 2006

The two most common arguments that I get against paying off your home as quickly as you can are:

#1 – The interest you pay on your mortgage payments are tax deductible!!!

#2 – You are better off investing the prepayment money into other higher earning investments.

I received one such e-mail today from a MyQuo.com reader.  Let’s look at the first argument.

Yes, the interest payments on your home are likely to be tax deductible.  Often people use this rationale to justify their 30 year mortgage or their house they are living in beyond their means.  However, many people over estimate how much these interest payments are actually worth.

Let’s look at someone who is in the 25% federal tax bracket and 8% state tax bracket.  And let’s assume they are purchasing a $125k house with no money down at 6.5% interest on a 15 year loan.

The tax savings will be $1,467 a year over the life of your mortgage.  That adds up to $22k in tax savings after 15 years.  On the other hand, if you made double payments on the same home you would save $48k in interest payments.  This represents a $26k savings in favor of paying your house off with double payments.

Now let’s look at the second argument.

Yes, you “can” earn more money on other investments on your money instead of making prepayments on your home.  But, you “can” also earn less money or even lose money.  There are few guaranteed returns on your money, and making prepayments on your home is one of them.

It all comes down to the amount of risk you are willing and more importantly, can afford to take.  Personally, I am treating my first house as a safety net.  My family will always have a roof over their heads once I pay off my home.

Once I have that safety net set up, I will more aggressively invest in other areas.  I have a few product ideas that I’m working on, as well as real estate and stock ideas.  The piece of mind knowing that I have a paid off home will help me greatly when pursuing these ideas.

Of course every person’s situation is different.  People who make more money will get more tax break benefit from interest deductions.  Which of course means that people who make less money will receive less tax break benefit from interest deductions.  For the majority of Americans however, prepayments will often save them more money than the tax breaks.

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This Week’s Festivals

August 4th, 2006

I’ve participated in a few of these festivals and carnivals now and I have to say that I am glad that I am doing it.  There are tons of good information on the blogs that participate.

You can check out the latest Festival of Frugality here:

http://www.myfinancialjourney.com/index.php/archive/festival-of-frugality-33/

Also be sure to look at the latest Carnival of Personal Finance:

 http://allthingsfinancialblog.com/?p=988

MyQuo.com is developing quite nicely.  I’m well into the Buying Our First house series and I’m learning a lot about the process.  As always, I’m taking the weekend off.  You should do the same.  After all, what is the point of living if you’re not enjoying life?

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Our First House – Choosing Our Representation

August 3rd, 2006

I’ve been a member of the Navy Federal Credit Union since I was a child.  My dad made it a point to open up an account so that I would have access to the institution when I grew up.  It was a wise decision by him, as Navy Fed is an outstanding credit union.

One of the programs that they offer is Member Move, which is a house buying and selling program.  The program is offered free of charge and offers cash back on your home transactions.

Personally, I will be getting $700 cash back if I use the Member Move program and finance through Navy Fed.  Since I was planning on using them already, this was just icing on the cake.  Note: that you do not have to finance through Navy Fed to use the program and to get cash back.

Once I signed up for the program I was assigned a buyers agent through an agency in Springfield Missouri.  Which, of course, is where I plan to buy my house.

Unfortunately I have hit my first snafu of the process.  Although I was assured that any buyers agent that I was assigned would be top notch, I found out otherwise.  Maybe I am expecting too much out of my agent.  But for me, if the agent stands to make a 3% commission on a $125k house, they better be ready to work for me.

I have a laundry list of things that the agent did wrong and I won’t go into the details.  Let me just say that she made a very poor first impression when she got my name wrong on her first call to me.  That and all future interactions had given me major concerns with her attention to detail, and ability to get me the best deal possible on a house.

So after having my first agent for 5 days, I decided to fire her and ask Navy Federal for a new agent.  I should be getting the agent in the next day or so.  Hopefully this new one will be ready to get to work.

If you can open a Navy Federal account, I highly recommend that you do so.  It really is a fine institution that you will be glad you are a part of.  If you are a member and have small children, make sure you make it a priority to open an account for them.  They will thank you for it when they finally have a need to use it.

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Disclaimer

August 2nd, 2006

The information provided on this site are the owners opinions and are not a substitute for the advice of a qualified professional.   While this web site attempts to reveal accurate information, there is no warranty on the accuracy or viability of the ideas expressed in the articles or e-mails of the owner.

The advertisements that appear on this site are not endorsed by this web site.  This web site’s owner disclaims any liabilities for information on any third-party sites linked to from this site.

All original material on myquo.com is protected by copyright law.  No one may copy or adapt any of the content of this site without express approval of the author.

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Our First House – Do I Need A Buyer’s Agent?

August 2nd, 2006

I happen to know many people who work or have worked in the real estate field.  One of them recommended that I skip the buyer’s agent for this purchase.  I’m a pretty sharp guy, so I know I could if I wanted to.  In addition, I would be able to get advice along the way to make sure that I didn’t make any major mistakes.

I weighed the pros and cons of his suggestion.  The following is what I came up with.

Pro:

What my friend meant when he suggest that I skip the buyer’s agent is that I should have the seller’s agent work both sides of the deal.  All the real estate information out there totally recommends against this however.  That is because the agent ultimately represents the seller’s interests, leaving you on the short end of the stick.

What these people do not tell you is that you can ask the agent to give you a rebate on your half of the commission.  Since he is working both sides of the deal, he will be making 3% from the seller and 3% from the buyer.
Note that the seller pays both percentages, but that is not important in this discussion.  What is important is that the agent has the opportunity to make an extra 3% on the transaction.  That also means you have the chance to get a piece of that action.

What you can do is ask the agent to give you 2% of that commission as a rebate on your closing costs or to knock it off the price of the home.  That leaves the agent with a total commission of 4%, which is still 1% more than if you bought the house from him using a buyer’s agent of your own.

This is a classic win-win situation.  You both get more money out of the deal.  2% of a $125k house works out to $2500.  Not a bad deal at all.

Con:

Since you don’t have a buyer’s agent, it is up to you to figure out how much the home is worth.  Since I wouldn’t have access to a CMA (more on this later), my best bet would be to check out comparable properties in the neighborhood.

Not only would this take me a lot of time, but it would require me to fly to Springfield from California to do the research.  The time and money involved would quickly eat into my $2500 savings.

A comparative market analysis can be your best tool for finding out how much a home is really worth.  It takes comparable properties in the area and compares them to the property in question.  From this information you can tell how the house you are interested in stacks up to other similar properties.  Is it overpriced?  Is it a bargain?  A CMA will help shed some light on these questions.

My Decision:

Ultimately, I decided to go with a buyer’s agent through the Navy Federal Member Move program.  The $700 cash back, the savings of time and money from not taking a trip out there, and the less stress I will have by having a buyer’s agent makes this a no-brainer for me.

For others however, this may save them a lot of money.  If you live in the area and the market, finding an agent who will work both sides of the deal makes a lot of sense.  Who would have thought you could get a rebate from the agent’s commission?  This only goes to show you that in business, everything is negotiable.

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Our First House – Identifying Areas To Live

August 1st, 2006

Everyone has their own list of criteria of where exactly they would like to live.  Some people prefer to live in the country; others prefer to be in the city.  Of course, one of the main reasons people live in the area of town that they do is the price of the property.

Here is the process that I went through to choose the areas of Springfield that I wanted to live in:

We had to live within 20 minutes of Springfield Missouri.  There are a few towns to choose from that fit this criteria.  After I narrowed down the towns that my fiancée and I were willing to live in, we started comparing them.

Comparing the following 3 qualities of an area will help you make an informed decision on where you want to live.

1. Crime Statistics

Look up the crime statistics in each zip code that you are considering.  You will find that the crime rate can change dramatically from one zip to the next.  I have found that places with higher incomes tend to have less crime.

There are many sites on the internet that you can look up crime statistics.  Try:

http://www.census.gov/main/www/cen2000.html
http://www.fedstats.gov/
http://www.livingchoices.com/community/community.aspx?sid=298198e3fcaf44c0ab17a2c623fb4ec8&refer=yahoo&mid=7920

2. Growth Trends

It is essential that you know the statue of the city.  Cities are living entities that are born, grow, shrink, and die.  Here are some questions that you should be trying to find the answers to:

Is the city growing overall?
Are the surrounding cities growing?
Which way is the city expanding?
What parts of the city are growing and which ones are shrinking?
Are people leaving the city for the suburbs?
What types of people are living in the areas you are looking at?

Ideally you want to buy a house that is in the growing part of the city.  After all a house should be an investment.  Don’t turn it into a nightmare by choosing a poor area to live.

You can find information on growth trends below:

http://www.census.gov/main/www/cen2000.html
http://www.fedstats.gov/
http://www.ersys.com/index.htm
http://www.city-data.com/

Be aware that not all the data you will be collecting is up to date.  Make sure you look at when the data was last updated.

3. Schools

This is an important consideration for buying a house.  Although you may not have kids, keep in mind that you will likely sell your house one day and your potential buyers may have kids.

Here are some links on schools in your area:

http://www.greatschools.net/
http://www.publicschoolreview.com/
http://www.boardingschoolreview.com/
http://www.privateschoolreview.com/

There you have it.  Doing a little research up front will help ensure your happiness in your new home.  And when it’s time to move, it will help you get a good selling price because it’s in a good area.

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Buying Our First House

July 31st, 2006

My fiancée and I are moving to Springfield Missouri from San Diego in October.  Our original plan was to rent a place and start looking for a starter home to buy.  Recently we have decided to skip the rental and start looking from a house right now.

Anyone who has bought or looked at buying a house knows that this can be a stressful time.  I’ll be documenting my experience on myquo.com over the next couple months.

Here is my plan for buying a home:

1. Identify the areas of Springfield that we would like to live in
2. Decide on our representation (if any)
3. Select a house
4. Buy the house
5. Set up our financing
6. Move in

Pretty simple eh?  I’m sure there will be some bumps along the way.  And of course, I’ll make some mistakes, but that is how you learn.  The plan above is my outline.  It may change with time and if it does, I’ll keep you updated.  Wish me luck.

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My Plan To Buy A House In 6 Years

July 28th, 2006

I’ll be moving to Springfield Missouri with my fiancée in the coming months.  The main reason for the move is that we simply can’t afford to buy a house here in San Diego.  The cost of living is outrageous here and is very affordable in Springfield.

This will be my first home purchase, but I have a plan.  I plan on buying a home well below my means and pay it off as quickly as possible.  There are 3 main reasons I want to do so.

#1 – I want to save myself as much interest as possible on the loan.  When you pay off a mortgage over the full term of the loan, you end up paying so much money in interest, that the house becomes an expense instead of an investment.

#2 – I want a paid off home that so that my family will always have a roof over their head.  I am looking at the house as my safety net.  There are many plans rattling around in my head for business ventures that I hope to take in the coming years.

Some of them are more risky than others.  The up side is great, but as with all business ventures, so is the downside.  If I lose everything trying to strike it rich, I want to at least have a house to live in.

#3 – There is nothing like owning your own home.  There is a sense of accomplishment and pride in it.  I realize that this is emotional reasoning and not in tune with the doing the most financially appropriate thing.  However, this reason only plays a minor role compared to the more important first 2 reasons.  Which are obviously financially objective.

My plan:

I hope to buy a $130,000 house with a 15 year mortgage at 7% interest.  The estimate for the interest rate is purposely overestimated so that I have some cushion.  Hopefully I’ll be able to secure a loan for under 6.5% interest.  A lot of the rate I will end up getting depends on how much the Federal Reserve raises interest rates in the next year.

The payments on this house will be $1169 per month.  The plan is to make an additional prepayment to the principle of the loan of $1200 each month.  Doing so will allow the house to be paid off in 5 years and 7 months.

When they home is paid off I will end up paying $26,600 in interest.  This will save me about $48,000 in interest payments if I had paid the home off over the 15 years.  To me paying $156,600 for a $130,000 home is a heck of a lot better than paying $230,300 for the same $130,000 home.

I would then be able to invest the interest money I am saving into other potentially more profitable investments.

There are people out there that would argue that doing so is missing out on a chance to earn more money.  The say that the prepayments of $1200 would be better spent on stocks.  However, there is no guarantee that the stocks will beat the interest savings of the prepayments.  If you prepay, you are guaranteed to save the interest.

If you do plan on paying your home off as soon as possible.  It is essential that you have a 6 month living expenses safety net set up.  That is, you should have enough money in savings to life off of if you lose your job, or you cannot work for whatever reason.

The bank will not care if you have made prepayments, if you suddenly find that you cannot make the mortgage payments.  That being said, you should already have the 6 months savings in your accounts.

Prepaying on your house is a guaranteed way to make you some money by saving you some interest.  There are few investments out there that can offer a guaranteed return.  This is one investment that you won’t lose any sleep over.

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Don’t Just Let Your Credit Cards Sit There

July 27th, 2006

If you have credit cards that you have not used in many months or even years, you may want to consider using them with your next purchase.  This is because your credit card can be closed at any time at the credit grantor’s request.

You may be thinking why they would want to close your credit card.  The credit card companies want to close inactive accounts because they cost them money.  They have to keep a file on you, they send you monthly statements, they send you special offers, etc.  If all that you are doing is costing them money, of course they are going to close your account.

If your credit card is one of your newer accounts and it has a lower credit limit, then this is not much of a concern for you.  But, for many people theses accounts can be an older account and have a significant credit limit.  Having these types of accounts closed can lower your credit score.

So what can you do?  It’s really simple.  All you have to do is go out and buy something with the credit card at least once a year.  If you want to be really safe, you should buy something every 6 months.  As some credit card issuers are more aggressive closing accounts than others.

Of course this isn’t the case for all credit card issuers.  You will have people tell you that they haven’t used their credit cards in years, and it’s still there.  The problem is that you don’t know what their policies are on this and when they may change.  They could decide tomorrow to cut costs by closing their inactive accounts.  Guess what happens to your friend’s credit card then.

It may be also a good idea to use your cards a couple months before they expire so that the credit card company’s computers will see that they account is active. 

All you have to do is buy a stick of gum or put a few gallons of gas in your car to keep these cards active.  It’s so easy that there is no excuse to have one of your credit cards cancelled for inactivity.

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Lots Happening At MyQuo

July 26th, 2006

There has been a lot happening at MyQuo.com this week.  Here is a recap of what is going on:

Problogger has a group writing project that I took part in.  You can where I have taken part in the project at The Submittion Project.

I have taken part in Festival of Frugality #32.  You can read all the posts here:  Festival of Frugality.

I have taken part in the latest Carnival of Personal Finance.  You can read all the posts here:  Carnival of Personal Finance.

I have taken part in the latest Personal Development Carnival.  You can read all the posts here:  Personal Development Carnival.

There are lots of good posts in there.  Check them out, as well as the blogs they are hosted on.

I would like to welcome all the new visitors to MyQuo.com.  Hopefully you have found some value from the information here.  There are lots of posts coming down the pipeline, so stick around.

You can sign up for MyQuo’s RSS feed on the bottom left side of the side bar.  And as always, feel free to Contact Me with comments or suggestions.  I love feedback.  Don’t be shy about suggesting something you would like me to look into for you.  I’ll research it and make a post about it.

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Hindsight Is 20/20

July 25th, 2006

ProBlogger is doing a group writing project on what bloggers would do differently if they had a chance to do it all over again.  If you’re a website owner and haven’t checked out Darren’s blog, you should really do so.  There is a wealth of information on his site and he is well known.

Now on to what I would have done differently if I had to do it all over:

I would have started my blog earlier.  As with all business ventures, the earlier you get in the game the easier it is to succeed.  There is less competition and there are lower barriers to entry.

Of course hind sight is 20/20.  Who would have known blogging would be so big 5-10 years earlier?

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Live Below Your Means – Part 3 of 4

July 24th, 2006

In part two of this Live Below Your Means series, I wrote about everyday purchases like buying a coffee from Starbucks or buying lunch at work.  Today I would like to write about a major purchase like buying a house.

For most people buying a house is the most expensive purchase they will make in their lifetime.  Unfortunately, this is also an area where people throw a lot of money away. 

One of the first things that a real estate agent will go over with you is to figure out how much of a house you can afford.  This how much of a house you can afford thinking is costing you a lot of money.

Yes, everyone wants to live in the biggest and nicely house possible.  But how much is buying the biggest house you can afford costing you?  Well it could possibly cost you your house if you have to foreclose.

When you buy the biggest, you leave little cushion for yourself financially.  What if your expenses go up?  Everyone should be well aware of this with gas prices tripling over the last few years. That aside, there is a just as important reason to not buy as much house as you can.  What about investing for your future?  My fiancée has a friend that is looking to buy a house for $200,000 in Dallas. 

Sure she can afford the house, but she doesn’t need that much house.  She could easily buy a home for $150,000 and invest the difference for her and her family’s future.  Let’s look at how much money buying a $200,000 house is costing her over buying a $150,000 one.

Scenario #1 – 30 Year Loan at 6.5% Interest:

Home Cost:             $150,000
Monthly Payment:    $948.10
Total Interest Paid:  $191,316.00

Scenario #2 - 30 Year Loan at 6.5% Interest:

Home Cost:              $200,000
Monthly Payment:     $1264.14
Total Interest Paid:   $255,090.40

The $200,000 dollar home will not cost her $50,000 more; it will cost her $113,800 more over the life of the loan.  This turns out to be $3800 per year or $316 per month.  Which you can see is the difference in the monthly payments.

Remember that you will have more than your $113,800 in cash after 30 years if you go with the smaller home.  This is because your money should be working for you, making you money. 

In part 4 of 4 in this series, I will show some details on how your money will make money over time.

* Note that I rounded numbers in some instances to make it easier to follow.

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Make Money By Entering Contests

July 21st, 2006

Did you know that there are people out there who enter contests and sweepstakes as their hobby?  They enter dozens of contests a day and win hundreds of dollars worth of prizes a month.  Sweeping, as it is called, is a good hobby because you can do it as much as you like, and you actually make money doing it.

I dabbled in sweeping for a month or so a while back.  I entered about 20 contests a day; which took me about 40 minutes.  Although I did not win anything huge, I did win some smaller prizes.  Here are some of the things that I won:

- 2 vouchers for a free Crunch Bar
- 3 vouchers for a free movie
- 4 vouchers for a free music download
- 1 fleece blanket

Here is how you can get started:

1.  Make a free e-mail account for the contests

You will make one specifically for sweeping because your e-mail will get tons of spam after you enter the contests.  Any Yahoo, MSN, Google or other e-mail will do the trick.

2.  Get a free Internet phone number

Just as your e-mail will be sold to marketers, so may your phone number.  I didn’t want to take any chances, so I got one of Internet numbers.  There are some choices out there, but I went with http://www.ringcentral.com/.

3.  Find some contests to enter

There are a lot of sites that have contest listings.  I use the contests and sweepstakes forum on Fatwallet.  You can find it here: http://www.fatwallet.com/c/45/.

4.  Enter the contests

There are once, daily, monthly, and quarterly sweepstakes that you can enter.  Make sure you keep track of which ones you can enter more than once.  By entering more, you give yourself more of a chance to win.

Now if you’re really serious about winning, you should try to get into the local contests and sweepstakes.  You can often find these at grand openings of stores and radio station promotions.  Keep an eye out for these or search for them on the Internet.

That’s it.  Good luck, and if you win a car, remember who told you about this…

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Understanding Money Market Accounts

July 20th, 2006

Chances are that you have your money sitting in the bank in your savings and checking accounts.  The interest rates in these accounts are likely to be 0-1.5%.  If you are one of these people, you are missing an opportunity to make some money with your money.

Why not park your money in a money market account?  These accounts often pay 3-5% interest on your money, which can be 2-3 times the interest you are earning from your savings account.

Here are a few facts about these accounts:

Pro’s:
- they are low risk
- they are federally insured, just like your savings account
- the higher your balance, the higher your interest rate

Con’s:
- there can be a maintenance fee if the balance gets too low
- you are limited to 3 personal checks a month

These accounts are a great place to put your money that you may need to access quickly.  You can transfer money in and out of this account to your checking account to pay your bills or earn some extra interest.

As with all accounts you need to be careful about fees your bank may be charging you.  For example, you bank may have a fee if you close the money market  account within 6 months of opening it.  Remember to read the fine print.

The key to making sure you are getting a good deal is to ask the right questions.  Find out about the minimum deposits, the interest rates, any tiers, and any fees involved.  Do your homework and you will be fine.

A good bank or credit union will make a money market account an attractive opportunity for you by not charging fees. You may think that the $5 extra you earn each month on your money market account is small potatoes.  But remember that you should be maximizing all your money opportunities and they do add up.  As I covered in my A Dollar Is Not A Dollar post, that $5 will be $20.90 in 15 years.

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Why You Shouldn’t Pay Off Your Student Loans Early

July 19th, 2006

My fiancée has a BS in Biology and a MFA in Forensics.  As you can imagine, she had to get a lot of student loans to cover the university costs.  $23,000 to be exact.  Fortunately, as with a lot of student loans, it is subsidized by the government.  Which means her interest rate on her loan is only 2.625%.

Having recently paid off her truck, she was going to use the money she would have paid on the truck to pay down her student loans a little quicker to safe herself some interest.  What she did not realize was that by paying off her student loan early, she was actually costing herself money from a missed opportunity.

There are many safe investments out there right now that are paying 5% interest.  These money market and CD accounts are a great place to put your money because of their guaranteed return.

I will spare both of us the calculations on this one.  They are involved and very complicated.  I will however, try to explain this abstractly.

Here’s the deal.  Her student loans have a 2.625% interest rate on them.  She can invest money safely in at a 5% rate of return.  So if she only pays the minimal every month on her student loans and uses the rest of the “former truck payment” to put CD’s, she will come out 2.375% ahead.

She still has to pay the 2.625% interest on the loan, however she is now earning 5% on the CD’s.  Here is the math:

5% - 2.625% = 2.375%

Basically she is earning 2.375% by choosing not to pay off her student loans early.  The government in effect is giving her low interest money that she can invest safely.  There is a catch however.  She must make sure she buys CD’s with the money.  If she does not and spends that money on clothes, then she is costing herself money.

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Game Plan For Complaint Resolutions

July 18th, 2006

Calling in to a company you are doing business with to correct a problem or concern can be an intimidating experience.  Many people by nature are non-confrontational, and calling in is a form of confrontation.

Here are 5 things you should do to make sure you are taken care of.

#1 – Stick to the facts

You should tell the customer service representative the facts of the situation.  Make sure you stay calm and objective.  Doing so will make sure that you do not cloud the issue that you want addressed.

#2 – Keep the conversation pleasant

Remember that the CSR deals with angry customers all day.  You may find that if you are nice and courteous, that your CSR will be more willing to work with you.  You want the person on the other end of the phone to want to fix your problems.

#3 – Inform the CSR how you want the problem resolved

CSR’s are not mind readers.  Do not assume they know what you would like to have done.  If you want a fee taken off, make sure you tell them.  If you want to be compensated for your wasted time or trouble, tell them.

#4 – Thank the CSR for helping you

Make sure you remember to thank the person for helping you out.  This is not only a courtesy, but it also helps them to help out others in the future.  Remember that you were their next call after the last problem they dealt with.  Their experience with the call before you may very well affect the outcome of your call.

#5 – Step it up a notch if necessary

Be ready to fight if you have to.  Although all companies like to claim that they provide excellent customer service.  This is clearly not the case.  Know your rights and make sure you hold the companies you are doing business with accountable.
                                                                                                                            
Having a good game plan is essential to being successful in any endeavor.  Complaint resolution is no different.  Don’t call in without knowing what you are going to say and what you want done.

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I Wouldn’t a Touch 50 Year Mortgage With A 50 Foot Pole

July 17th, 2006

We’re in the middle of a housing bubble.  There is no doubt about it.  What is debatable is what the fall out is going to be.  Is the housing market going to crash?  Will it level off for a while?  No one knows.

What I do know there are people who will come out on top, and there are those who will come out on the bottom.  And as I am watching the real estate market, I am seeing some disturbing trends.  The newest of which is the 50 Year Mortgage.

The mortgage companies out there are touting this as a way for American families to be able to afford the high prices of today’s real estate.  The reality is that these loans are a great way to make the mortgage companies even more money.  This means that the average family will be paying even more for their homes.

Let’s compare the traditional 30 Year Mortgage with the new 50 Year Mortgage:

30 Year Mortgage:

Home Cost:                $150,000
Interest:                     6.5%
Monthly Payment:       $948.10
Total Interest Paid:     $191,316.00

50 Year Mortgage:

Home Cost:                $150,000
Interest:                     6.5%
Monthly Payment:      $845.58
Total Interest Paid:    $357,348.00

For a $100 reduction in monthly payments you are paying $166,000 more over the life of the 50 year loan.  This makes absolutely no financial sense at all.  So when you are getting ready to retire you will have $166,000 less to live on.  This is not counting the fact that you could have had this $166,000 working for you to be making you money.

Here is another way to think about it:

After paying off your 50 year loan you would have paid $507,000 for a $150,000 house.  Sure the house may be worth $250,000 in 50 years, but you still paid twice that.  Paying off a house in 30 years is bad enough, don’t hurt yourself financially even more by getting one of these 50 year loans.

If you cannot come up with the $100 difference for the 30 year mortgage, you need to look for a lower priced home.  In this example you would be looking to buy a home for $134,000 to make your payments $847 a month.

Buying a less expensive home will allow you to not only make the payments, but also to invest for your future.  A little sacrificing now will have a lot of benefit for you in the future.

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Who Is Responsible For Credit Card Fraud?

July 14th, 2006

I recently got into a debate with a friend of mine about credit cards.  He thought I should be concerned about having thousands of dollars of available credit with the credit card companies.

My response was to tell him that the only risk you take by having a lot of available credit from credit cards is from yourself losing control and buying all kinds of things you don’t need.

So what happens if your credit card info is stolen and a thief uses your $20,000 credit card?

The answer is the exact same thing as if you had a $1,000 credit card that was stolen.  You report the fraud to your credit card company within 60 days of the fraudulent charges and start clearing up your credit report mess.

The bottom line is that you are not responsible for the charges to your card, no matter how high they are.  By federal law, the most you are liable to pay is $50 if your credit card was used without authorization before you report it missing.

So if your $20,000 credit card is stolen and has a $12,000 charge on it, you at worst will only have to pay $50 if you had not already reported it to the credit issuer.

Any charges that take place after you report the card stolen to your issuer are not your responsibility.

If you are not responsible for the credit card fraud, where does it fall?  Ultimately it will fall to the merchants where the goods and services were purchased.  The credit issuers will take their money back, leaving the merchants holding the bag.  Not only that, but the merchants are often charged research and investigation fees by the banks checking out the fraud.

Although you are not responsible for the credit card fraud, you still end up paying for it in the end.  This is because merchants will include credit card fraud loss into their business plans and price their products higher to cover the costs.

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Is Your Home Really An Investment?

July 13th, 2006

I have always heard that my future house will be the biggest investment I will ever make.  But is a house really an investment?  Consider the following:

- You have to pay property taxes on your home every year
- You must keep your home insured by homeowners insurance
- Your home requires maintenance

The above sounds like a lot of expenses to me.  Let’s figure out the property tax for a typical house in a medium sized city.  For the purposes of this post I will use the property tax rates for Springfield, MO.

$150,000   House
$4.35 per $100 Valuation  Property Tax Rate
Assessed value is 1/3 of true value of home

$150,000 x 1/3 = $50,000 assessed value
$50,000 / 100   = 500 taxable value
500 x $4.35      = $2175 in property taxes

There will always be something that needs fixing or replacing with your house.  It can be new windows, a new roof, or a new furnace.  You must include these expenses into the equation here to get an accurate picture.  For this example, I’ll use $1200 per year.

Homeowners Insurance can vary greatly depending on a number of factors.  But, let’s just say that it’ll run $600 a year to give us a ballpark value.

Here are the yearly expenses:

$2175 in property taxes
$1200 for house repairs
$600 for homeowners insurance

$3975 total yearly expenses

This comes out to be $331 per month just for the upkeep of your house.  We haven’t even tackled the interest that you are paying on your mortgage.  With a $150,000 30 year mortgage at 6.5% interest you will end up paying $191,316 over the life of the loan.  Which comes to $6377 a year in interest.

This makes the total expenses:

$3975 yearly expenses
$6377 yearly mortgage interest

$10,352 total house expenses

Now that we have taken care of the expenses, let’s have a look at your gains.

Everyone has watched the real estate market sky rocket over the last few years.  And a lot of people are leaping at the opportunity to cash in on those gains.  I have news for you.  The real estate market will not go up forever.  Yes, housing prices do actually go down.

From 1991 to 1996 they dropped 21% in Los Angeles.  From 1988 to 1995 they dropped 10% in New York.  From 1989 to 1991 they dropped 7% in Boston.

The housing market and economy is different today than it was back then.  But my point is, real estate values can and will drop in the future.  You cannot automatically think that your home will always go up in value.

It will go up in value over the long haul however, which is how you should look at it.  A good estimate would be an annual appreciate rate of 4% per year.  So your $150,000 will increase in value approximately $6000 after the first year.

If you take the $6000 appreciation and subtract the $10,352 expenses, you will notice that your biggest investment is not making money.  Therefore your house is actually an expense.  It becomes an investment only after you have lived in your home for many years to benefit from the multiple annual appreciations.

So yes, you could say it is technically an investment because it makes money in the long run.  However, it is a very poor investment at best.  Obviously you need somewhere to live, and you can pass your home on to your children.  So there are additional benefits to look at.  But as a purely financial point of view, you should not be calling your house your biggest investment.

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How To Make Money By Spending Money

July 12th, 2006

Unless you have been living under a rock for the last few years, you should have heard of the rewards cards that many credit card companies are offering.  These cards often give you 1% cash back for purchases made on their credit cards.  This cash back is usually in the form of some kind of gift card that you can use at authorized retailers.

Do you have a reward card?  If you don’t, you should get one right away.  Because you are throwing away free money.  I recently convinced my fiancée to apply for a rewards card.  She was approved for a rewards card that gave her 1% cash back on her purchases.

The card has a credit limit of $1000, of which she has been charging $500 to each month.  At the end of the month she pays the balance off in full.  This is important.  If you do not pay the balance off in full, you are losing all the benefits of the cash back by paying the high interest rates on the card.  Make sure you only charge what you normally spend on the card.  Remember that as with all credit cards, you have to pay the money back.

She easily has $500 in bills and expenditures every month.  Before, she was using her debit card, cash and checks to pay for these goods and services.  Now however, she is using her rewards card and earning cash back.  At the end of the year she will receive a rewards card for $60.

As I always say, $60 bucks is $60 bucks.  I am not one to turn down easy money, and I’m still working on my fiancée.  Especially money that is this easy.  And remember this $60 has the potential to be a lot more than $60 if she uses it wisley.

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Live Below Your Means – Part 2 of 4

July 11th, 2006

In part one of this Live Below Your Means series, I wrote about semi-major purchases like buying a new couch.  Today I would like to write about day to day spending.

Most people do not realize how much money they are spending every month.  If you look at your monthly spending, I would be willing to bet that you are spending hundreds of dollars every month that can be saved or invested for the future.

Do you buy a Starbucks coffee every morning on the way to work?  Do you eat at Subway for lunch everyday?  Do you pay $80 a month for parking in the parking structure, when you could park farther and walk into work?

If you do, you are throwing away not just that hundred dollars every month, but thousands when you factor in the gains lost from not investing this money.  Let’s just assume that you spend $200 a month that you could easily save yourself each month.  You then take this $200 and invest it earning a 10% return.  Some people could save and invest a lot more btw.  Let’s look at some numbers:

$2400 in discretionary funds

Scenario #1 – Over a year period ($200/month x 12 months)

Today:

$2400 – Spent on coffee, fast food for lunch at work

10 Years Later:

$0 – All the money spend was on consumable goods

Scenario #2 – over a year period ($200/month x 12 months)

Today:

$400 – Coffee made at home, lunch brought from home. This money has all been spent on consumable goods
$2000 - Invested into stock market earning an average return of 10%

10 Years Later:

$5185 - $2000 Investment has now grown approx 250%

As you can see, by cutting down on your spending by $200 each month ($2400 per year), you not only save $2400 a year, but your money makes you and additional $2800 when that money is invested.

Now if you do this year in and year out, you will have thousands of investments out there to further invest and or retire on.

One of the best ways to control your spending is to make a monthly budget and stick to it.  Once the costs are on paper, you cannot forget facts or twist spending to make them seem okay in your mind.  You will also realize how much money you are throwing away everyday.  It may seem like a small amount of money everyday, but it adds up quickly.  Especially when you take into account the potential investment lost over the years.

In part 3 of 4 in this series, I will be writing about savings in a major purchase.

* Note that I rounded numbers in some instances to make it easier to follow.

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This Week’s Carnival - The Real Returns

July 10th, 2006

Welcome visitors from The Real Returns.  MyQuo.com chronicles my journey to become financially savvy and free.  As I learn about things I will be posting them on this blog.  If you have something you want to learn more about, feel free to send me a message.

 If you haven’t checked out The Real Returns, you may want to.  He has some nice articles on finance which make you think.  You can check out the blog here: The Real Returns.

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What Is A Credit Limit And What Is So Important About It?

July 7th, 2006

A credit limit is the amount of available credit that the credit card companies have allowed you to put on their cards.  Pretty simple enough.  But, there is a lot more to a credit limit than that.

Your available credit, more specifically, your credit utilization is a good part of your credit score.  Credit reports with a lower utilization rate are scored higher and those reports with a higher utilization are scored lower.

You should be taking advantage of this system.  Obviously the best way to do this is to keep your utilization as low as possible.  One way to do this is to make sure you only spend what you can and will fully pay off when your statement comes.  Credit reports love people who do this.  These people are a lower credit risk and receive higher scores.

There is another easy way to help out your credit score with regards to utilization.  It is by increasing your available credit.  The more credit you have, that you are not spending, the higher your score will be.

Your credit limit is increased by CLI’s – credit limit increases.  Sometimes you are given a CLI automatically by your credit card company.  Other times you can get a CLI by requesting one.

Many people are not ensuring that they are getting their CLI’s.  Not doing so is hurting your credit score, which in turn is costing you money.  A higher credit score means lower interest rates on loans and credit cards.

So how do you make sure you are getting your CLI’s?  You have to ask for them!  Ask for a CLI every 6 months.  Many of the issuers today have online request forms that you can use.  They are quick, simple, and easy.  If you are not asking for your CLI’s, you may very well not be getting as many as you could.

When you ask for a CLI, sometimes you will be given a set increase.  Other times they will ask you how much of an increase you want.  Don’t say, “As much as I can get”.  A better response would be asking how much you are eligible for.  They may tell you, taking the guess work out of the game.

As your available credit increases, so will your score.  That is as long as you keep spending only what you can pay off when your statement comes in.  This is an easy and cheap way to help improve your financial situation.

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Tips When Buying A New Car

July 6th, 2006

As a strong proponent of living below your means, I recommend that you never buy a new car.  However, sometimes people want the new safety features that are available for today’s models.  Other times they are financially secure and can actually afford a new car.

Whatever the reason, buying a new car can be a stressful and expensive experience.  Here are some ideas and tips to help you pay the lowest price for your new wheels.

#1 - Choose the time of the day carefully.  The less people that are at the car dealership, the more likely the dealer will be interested in making a deal.  Also, dealers are more likely to make a deal when they have to meet quotas at the end of the month/quarter.  Ideally you want to be the last person of the day for the dealer.

Important times to go to the dealership:

- weekday
- late evening
- end of month
- end of quarter

If you are really serious about going when there is no foot traffic.  Go in the middle of a rainstorm or snowstorm.  You’ll likely be the only person there and the salesperson will be much more willing to negotiate.

#2 - Do not start your negotiations from the sticker price, aka the suggested manufactures price.  Start at the invoice price of the vehicle.  This is what the dealership paid for the car.  You can determine the invoice price for your particular vehicle at http://www.edmunds.com or http://www.cars.com.

Once you have the invoice price make your offer the invoice price minus $500.  This is the standard rule of thumb as is a good starting point.

Here are some other tips that may help you out:

- Make sure you start the bidding, don’t get anchored by their bid price.
- Do not negotiate by the new car, use the dealer’s office.  They want you to fall in love with the vehicle.
- Don’t let the manufactures rebate influence the vehicle price.  It’s from the manufacturer not the dealership.
- Don’t let the salesperson distract you by asking how much you want to pay per month.  This is an irrelevant question in regards to the vehicle price.
- Negotiate the dealer prep fee.  All they are doing is washing the car and taking the plastic out of the interior.  Tell them you will wash the car and take the plastic out yourself.
- Negotiate a trade-in after you have finished with the new vehicle, it’s a different issue.  Plus this is an added distraction in negotiations.

Buying a car is one of the most expensive purchases a person may make in their life.  Make sure you do your homework.  And most importantly, make sure you get a good deal.

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This Weeks Carnival And 4th Of July

July 5th, 2006

I’d like to thank Raising 4 Boys for hosting this week’s carnival.  These article events are a lot of work, and I appreciate it.

For those who have found my site through theirs, welcome.  MyQuo.com has many tips on how to make, save, and think about money.  My post for the carnival is A Dollar Is Not A Dollar.

If you haven’t checked out Raising 4 Boys, give it a look.  The posts are not only entertaining but they are informative.  This is especially the case if you have or hope to have kids in the future.

And finally, I hope everyone had a great 4th of July.  I had my Dad and his wife up for dinner.  Everything went smoothly.  My Dad and I talked about a few business ideas, my fiancee made an amazing meal, and we all played Stategories to end out the night.

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Renting Out A Room In My Home

July 4th, 2006

I live in San Diego, California.  As such, the cost of living here is very high.  San Diego is one of the hottest markets in the country.  Two years ago I moved into 2 bedroom, 1 bath, 975 sq ft apartment for $1050 with my fiancée.

As you can imagine, this cost takes up a huge part of our budgets.  To lessen the load, I decided to rent out the 2nd bedroom.  This can be a great way to save money; money that can be invested to work for you.

Here is what I did:

I advertised the room for rent in Craigslist for San Diego.  If you have not heard of Craigslist, check it out: Craigslist.  It is a message board in which you can find jobs, rentals, and used goods.

Back to the story…  I listed the room for $350, which is 1/3 of the apartment’s rent.  This is a steal of a deal in San Diego.  After a few hours of being posting I had received 40 replies and had to take the ad down.

I sorted through the replies and choose a handful to interview.  On the third interview I found the perfect roommate and rented the room out to him on the spot.

Here are some tips and observations that I gained from my room renting experience:

- Set your rent a little below market value.  This will allow you to choose the pick of the litter from the renter pool.  Everyone will be scrambling to get your room.  For renters price is the #1 consideration.  For the rentee, the roommate is the #1 consideration.

- Obviously you want to get as much money for the room as possible.  But, this is only half of the game.  You also want to keep the room rented as much as possible.  If the room goes unrented, you will quickly lose any gains you would have from getting a higher rent.

- Trust your gut instincts on people.  When you interview potential renters, they will be on their best behavior.  If you have a gut feeling, go with it.  If you don’t have gut feelings, work on developing one.  My gut is right the majority of the time.

- Make sure you do a background check on anyone you rent to.  You don’t want to rent to someone who has credit problems or who has a record.  The eviction process can be very slow, time consuming, and costly.

- Set up rules for the home.  You need to let the potential renter know straight up what the rules are.  Do they have access to your kitchen and TV?  What about guests, pets, drugs and parties?

- Sign a rental contract with the renter.  Make sure the cost of rent, deposit, rules, and move out policies are in there.

The renter turned out to be a great roommate, and we saved hundreds of dollars during our agreement.  I used the money I saved to help start up my business.  It is important that you invest the money you save by renting out a room in your home.  If you just spend it all, you haven’t really gained anything for the future.

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Diamond Engagement Ring Alternatives

July 3rd, 2006

Marriage is a serious financial commitment and you should treat it as such.  It is common knowledge that money is the number one reason why couples split up.  As such, it is important for you and your significant other to be on the same page on fiscal matters.

However, it starts even before then.  My fiancée and I had to decide what our wedding plans were.  The first issue was buying an engagement ring.

Diamond engagement rings are traditional here in the United States.  But, if you have ever looked at the prices of the diamonds, you will know they are outrageously priced.  This is because Debeers has a monopoly on the diamond supply.

With their monopoly they constrict supply, increasing prices and their bottom lines.  There are a few alternatives to diamonds, whether you choose them for morally or financial reasons.

Some alternatives are:

- Diamond simulants
- Lab grown diamonds
- Alternative stones

The diamond simulants are basically other materials made to mimic the look of real diamonds.  They are very inexpensive in price.

The ring I was considering was a 2.04 carat stimulant, which included the wedding band for only $535.  Rock bottom prices like these are very tempting.  However, I decided that if I wasn’t willing to pay the price for a real diamond, I should not buy a simulated one. 

Lab grown diamonds are real diamonds.  They have the same chemical structure as natural diamonds.  The only difference is that they are grown in a lab over a year or two period instead of formed in the ground over thousands of years.

I was very interested in these lab grown diamonds.  It is very cool that people can make a diamond in a lab in a fraction of the time that it would take Mother Nature to make it.  As I researched the prices, I found that they were just as expensive as the natural diamonds.  Prices are sure to drop in the coming years as they become more common place, but for me it was too early.

Many couples today are choosing alternative stones for their engagement rings.  I have friends that decided to take this route.  And many high profile people have gone this route also.  Did you know that Princess Diana had an alternative stone engagement ring?  It was a sapphire.

We decided to go with an alternative stone in the end also.  There were a few reasons that we went this route. 

- I have a major problem paying for a product in which the price has been heavily manipulated through constricting the supply
- My fiancée does not feel comfortable wearing jewelry worth thousands of dollars
- The money we saved is being put towards a down payment for a house

She has been wearing the ring for a while now and loves it.  She has received many compliments on the stone and ring.  What stone did we decide to go with?  A topaz.

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Live Below Your Means – Part 1 of 4

June 30th, 2006

The number one reason why Americans have a hard time making ends meet is that they don’t live below their means.  Our culture has a “buy it now and pay later” mentality.  All this living at or above your means is costing yourself financial freedom.

In part 1 of 4 of this series I will explore a typical example of a semi-major purchase.

Buying furniture is something that we all need to do.  After all, we need places to sit, eat, and sleep.  However, many people when they need a new couch, buy the best couch they can afford.  They have the mentality that since they can afford it, they should buy it.  Should you?  Let’s crunch some numbers:

$2000 in discretionary funds

Scenario #1
 
Today:

$2000 – Brand new leather couch purchased

10 Years Later:

$0 – Leather couch is in the trash

Scenario #2

$1000 – Less expensive couch purchased
$1000 – Invested into stock market earning an average return of 10%

10 Years Later:

$0       – Leather couch is trash
$2500 – Investment has now grown approx 250%

As you can see in scenario #1 you only bought a depreciating consumable good.  You now need another couch and none of your money worked for you.

In scenario #2 you also bought a couch, a depreciating consumable good, but one that was below your means.  You then invested the remaining $1000 you had and 10 years later, that investment was worth $2500.  You allowed your money to work for you.

You may be thinking “big whoop, you now have $2500 more after ten years.  $2500 after ten years is chump change for such a long time”.  If you are thinking this, you are missing the point.

What about the $1000 you could save and invest the next year, and every year thereafter for the next ten years.  Your original investments will be, on average, worth $2500 10 years later every single year.  So you now have thousands of dollars in investments, not just $2500.

In part 2 of 4 in this series, I will be writing about savings in everyday purchases.

* Note that I rounded numbers in some instances to make it easier to follow.

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A Dollar Is Not A Dollar

June 29th, 2006

People have a habit of spending money in small amounts and justifying the cost by using the “it’s only a dollar” rationale.  Well I have news for you.  A dollar is NOT a dollar.

I know what you are thinking.  Is this one of those 1+1=3 things?  Nope, a dollar is not a dollar because attached to the value of a dollar is an opportunity for that dollar to be invested into more dollars.

Here is how it works:

Say you are at the grocery store and you see a huge chocolate chip cookie on sale for $1.  You decide to buy it even though you don’t need it.  Because, hey it’s only a dollar and look at that cookie, it’s huge!

However, if you took that dollar and invested it in the stock market, it would earn an average return of 10%.  If you took all the profits from that dollar and reinvested it, that dollar would be:

$1.61   in 5 years
$2.59   in 10 years
$4.18   in 15 years
$6.73   in 20 years
$10.83 in 25 years
$17.44 in 30 years

As you can see the cookie did not cost you $1 as it was priced.  It costs a heck of a lot more than that if you look at what that dollar could do in the long run when properly invested.

Next time you are tempted to buy something frivolous, think about how much it is really costing you.  Is it still worth it?

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Get Paid For Doing Surveys

June 28th, 2006

There are many survey programs out there.  What you get out of them can vary widely.  You can receive nothing, points or even cash.  My fiancée absolutely loves to give her input on new products that are in the developmental process.

After observing her do many free surveys, I told her that she might as well get paid to do them.  After all, these companies are gaining valuable marketing information from her, and she should be compensated for it.

One of the leaders in the field is Pine Cone Research.  My fiancée has been doing these surveys for 6 months now and has collected over 10 checks from them.  The pay is $5 per survey and they usually take 10-15 minutes to complete.

Pine Cone Research is top notch.  Every check has been received and their software is quick and easy to use.  If you are looking into doing some surveys for some extra cash or for some fun, I highly suggest you check them out.

Unfortunately, you cannot just go to the web site and sign up.  They are very selective of who they choose to send surveys to.  And for good reason.  At $5 a pop, they want and deserve to get quality people.

So how do you get on with Pine Cone?  The best way is to keep an eye out for their banner ads.  They occasionally run the ads on constantly changing web sites.  Common sense tells me that the ads would more likely appear on survey related sites.  I suggest that if you are serious about this, to browse these sites until you see an ad.

You could also check some message boards.  Sometimes people post where the ad is at the moment.  A search will bring up plenty of message boards to browse.

It may take some work and a little luck to get on with them, but it is well worth it.  If you are going to be doing surveys, you might as well make a little money also.

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How To Get Deep Discounts Off Your Theme Park Tickets

June 27th, 2006

With the summer here, many people are flocking to theme parks to have some fun.  Among the popular destinations are Disneyland, Universal Studios, and Six Flag parks.  No matter which park you choose to go to, there is no reason why you should pay full price for these tickets because it is often very easy to find discounted tickets.

The first thing you need to do is determine how you qualify for a discounted ticket.  After you do this, it’s all down hill.  Here are some common ways people qualify:

Are you a member of any associations?  Almost all of us are.  A lot of them have programs which give their members discounts for theme parks.  Some associations include: teacher’s associations, unions, AAA, universities, and the military.  Give them a call or go to their websites to look for offers.

Keep an eye out for special promotions.  Look for soda can offers, coupons in cereal boxes and store promotions.  For example, Six Flags routinely has a 2 for 1 deal if you bring a coke can to the ticket window.  And don’t forget to look at the offers that come with your credit card statement or other bills, they may very well have a good coupon inside.

Check your local bank or credit union.  My credit union has heavily discounted tickets for theme parks.  The tickets are in limited supply, so plan ahead.  If they happen to be sold out of tickets, ask them if you have any other options.  They may very well have coupons that they can give you.

If you are paying full price for a theme park ticket, you are doing something wrong.  There are many discounts out there to be had.  All you have to do is look around a little.

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Eliminate Your Need For Fabric Softeners

June 26th, 2006

My fiancée were at the store a couple months back and a new dryer product caught my eye.  They are Dryer Balls, and they aim to replace dryer sheets and fabric softeners as we know them.

Basically they are small spiky balls made from PVC plastic which kneed your clothes as you dry them.  Just as the arms of the dryer flip your clothes around to dry them quicker, these balls create small areas of air which they claim to make your clothes dry up to 25% quicker.

After using this product for a couple months I have made the following observations:

They work just as well as dryer sheets.  I could not tell the difference between clothes dried with a dryer sheet and clothes dried with the dryer balls.  The clothes were just as soft, had no static buildup, and smelled just as fresh.  In fact, I prefer the smell of the dryer ball clothes.

I have not noticed if the clothes dry any quicker using the balls.  I imagine that this could be true, and I will do an experiment in the future to test this.

Using the balls as opposed to the dryer sheets is not only saving the environment, but it is also eliminating another source of chemicals that I am exposed to everyday.  I would not be surprised if 20 years down the road a study will find that the use of dryer sheets increases the risk of some kind of health problem.

The balls are moderately priced at $10 for a package of 2.  You should of course use both with each dryer load.  It will take a long time to recoup the cost from dryer sheets alone, but it will be recouped.  The balls are very durable and I expect them to last a long time.

I fully recommend this product for anyone who is worried about the environment, the chemicals they are exposed to, and who thinks new technology is cool.  This product is ingenious and a great buy.

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What To Do When Your Computer Dies

June 23rd, 2006

My soon to be brother in law’s computer died a week ago and like most computer illiterate people, he took the computer to a local computer repair shop.  He was forced to do this because he knows nothing about computers and didn’t know what to do.

The repair guy obviously sensed this and tried to take my BIL for a ride.  Fortunately for him, he could ask for my input when things seemed a little fishy to him.  Basically the repair guy charged my BIL $35 for a diagnostic and said repairs would be $400-500.

His computer is not even worth that much money.  He would be better off buying a new computer at that price.  On top of that, it sounds like all that the computer needs is to have the power supply replaced.  That’s a $50-100 repair, or less if you can get a Fatwallet Deal

So how do you protect yourself from being taken for a ride?  Educate yourself about your computer.  Anytime you totally rely on others, you open yourself up to being taken advantage of.  You should have a general understanding of what is going on.

Here is my Computer Diagnostic 101 course:

Get yourself a couple guides on computer troubleshooting and repair.  Make sure they are written in non geek speak so that you can follow them.  Here are a few recommendations:

Morris Rosenthal has put together a free computer troubleshooting resource on the web.  It’s easy to follow and has step by step directions.  There is also a visual flowchart to help you out.

Morris Rosenthal Resource

If you are going to need more, you can try out a computer troubleshooting book.  Here are some books that I found on Amazon.  They have good reviews and are inexpensive.

Computer Repair With Diagnostic Flowcharts: Troubleshooting PC Hardware Problems from Boot Failure to Poor Performance

PC Help Desk in a Book: The Do-it-Yourself Guide to PC Troubleshooting and Repair

These resources have you answer yes and no questions to narrow down the cause of the problem.  Through the process of elimination, the problem will be found, which will of course allow you to fix it.

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30 vs 15 Year Mortgages

June 22nd, 2006

The 30 year fixed mortgage is by far the most popular among home buyers.  What people fail to realize when getting a 30 year loan is that they are actually paying over 2 times what the home is worth.

You could save yourself a lot of money in the long run by getting a 15 year fixed mortgage instead.  The payments are only a little higher for the 15 than the 30 but you will save yourself tens of thousands of dollars.

Let’s compare the loans on a $150,000 house with a 6.5% interest rate:

30 Year Mortgage
$948.10    monthly payment

$150,000  principle
$191,316  interest paid on principle
$341,316  total paid

15 Year Mortgage
$1306.66  monthly payment

$150,000  principle
$85,198    interest paid on principle
$235,198  total paid

Above you can see that you save yourself $106,118 by getting a 15 year mortgage instead of the 30 year one.  Not only that, when you have your home paid off in 15 years, you can put your mortgage payment into investments and make that money work for you instead of working for the bank.

It should also be noted that the payments for the 15 year loan are $359 higher than the 30 year loan.  This should not be a problem if you are living below your means.  In addition, the mortgage payments should be a little lower than stated above because you can often receive a lower loan rate for a 15 year loan as opposed to a 30 year one.

There are plenty of places to come up with the extra money.  You could buy a lot less car, control your everyday spending, or buy less expensive furniture.  You would even be better off buying a less expensive house if that is what you had to do to make the payments.

$106,118 will go a long way, especially considering that it may very well turn into a lot more when it is properly invested.  The question you should ask yourself is: can you afford to not go with the 15 year mortgage?

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Contact Me

June 21st, 2006

Feel free to contact me with any questions or suggestion you may have.  I always like to hear about people views on my posts.

I’m especially interested in new post ideas.  Do you have a tip you would like to share?  Or do you have a money matter that you would like me to post about?  Suggest it to me:

 

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Make Sure You Are Protecting Your Identity

June 21st, 2006

Unless you have been sleeping under a rock for the last few years, you have undoubtedly heard about identity theft.  This is one of the fastest growing crimes in the United States today and can be a nightmare if you are a victim.

Here are a few tips to lower your risk of becoming a victim:

#1 - Regularly check all bank accounts, credit card, and other financial statements

You should be checking your financial accounts regularly to make sure everything is as it should be.  If a problem should arise, the sooner you catch it the better.  The damage will be smaller and the problem will be easier to fix.
#2 – Buy a shredder

Shred all documents that have important information such as your social security number, date of birth, and account numbers before you throw them away.  Dumpster diving is still a popular method for crooks to get a hold of your personal information so that they can steal your identity.

Keep in mind that all shredders are not created equal.  You should be buying a cross cut shredder.  These shredders will help ensure that a crook won’t be able to tape your statement back together again.

This is also why a simply tearing your statements up is not sufficient.  A little time and effort will easily allow someone to see the information on the statements you are trying to protect.

#3 – Obtain your credit reports at least once a year

It is essential that you are checking your credit report to make sure that new accounts are not being unlawfully opened in your name.  If you see that there are inquiries on your report for new credit that you did not do, someone could be trying to open accounts in your name.  Check them out and notify the credit issuer and the credit reporting agencies.

Recently a law was passed that entitled you to a free credit report once a year.  Make sure you are taking advantage of it.  You can get your free annual credit report at www.annualcreditreport.com from each of the 3 major credit bureaus.

#4 – Guard Your Personal Information

Don’t give personal info out over the phone or e-mails that you receive.  Businesses will not call or e-mail you asking for this information.  If you have any doubt, tell them that you will call them back to speak to them.

Look the business number up from their website or the phone book and call them back.  This will ensure that you are not speaking with a thief who is fishing for your personal information.

#5 – Protect Your Mail

One of the easiest ways for someone to steal your information is to simple take it from your mailbox.  To prevent this, you should consider getting a lockable mailbox if you don’t already have one.  Also be aware of what time a month your statements and bills come in.  If one is late, that could mean that someone stole the letter before you checked your mail.

Another important thing to remember is to take advantage of the mail forwarding service that they post office offers when you move.  It is also important to change your mailing address for all your accounts when you change residences.  You don’t know who will be moving into your old home.  They may very well be an identity thief.

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How Much Is Day Care Really Costing You?

June 20th, 2006

A good friend of mine had his first child with his wife a year ago.  They both make pretty good money and have good, stable jobs.  A couple months after their child’s birth, they both went back to work.  As such, their baby had to go into day care.

We recently had a conversation about how much day care costs.  He told me that it costs him $1300 a month to keep his baby in day care.  When another friend asked him how much he was making in his job, the reply was $3700 a month.  The $1300 daycare cost represents 35% of his take home salary.

So he seems to think he takes home $3700 a month for working.  This is simple not true.  My friend does not take home $3700 a month, which is what he earns from his paycheck after taxes.  He is making $2400 a month.  Why is that?  Well it is because he has an expense of $1300 a month that he would not have if he would become a stay at home dad.

He needs to sit down and ask himself if it is worth working full time for $2400 a month.  Not only is he working for less money, he is also missing out on some of the more formative years in his child’s life.

There are other options available too.  Could he work from home?  Could he start a home based business?  Could he freelance from home?  He works with computers so there are many options that he could do from the home.  Options that could make him $2400 a month, while being at home with his child.

In the end, the answer may very well be yes.  Yes, it is worth working his job for $2400 a month.  They made need that money to keep up with their lifestyle.  He may not want the responsibility of being self employed.  But, he has to recognize his is working for $2400 a month, and not $3700 a month as he thinks.

This is an important idea to think about when you are making financial decisions.  Often when you are deciding between options, you cannot only look at the costs and benefits on the surface.  You have to look at your opportunity costs.  In other words, what are you missing out on because you are making a particular choice.

In doing so, you may find that your options don’t look as great or as bad as they had before.

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Fatwallet – Save Money By Getting Deals

June 19th, 2006

A major part of my plan to becoming financially free is to contain my spending.  I’m not talking about never buying anything either.  We all have to buy necessities.  In addition, we need to buy some toys once in a while.  If you don’t, you will not be happy.  And what’s the point of living, if you’re not happy?

I found Fatwallet a little over a year ago when I was playing poker to support myself.  I needed a larger monitor that I could play multiple tables on at one time.  Playing more tables = winning more money.  I leave this at that because this poker story deserves its own post.

Anyway, back to the point.  Fatwallet is a deals forum community.  It has thousands of members and hundreds of posts a day throughout its many forums.  If you’re looking for a deal on anything from printer paper to a new washing machine, I suggest you check the site out.

Here are a few examples of deals that I have gotten over the last year:

- $1000 dell computer for $550
- $100 laser printer for $7
- $60 stick of RAM for $20 x2
- $80 video card for $3.75 x4
- $10 photo paper for $.05 x6

There are many more.  I have bought around 30 items over the last year or so at a significantly reduced price.  The things I have bought are things that I needed, or things that I could use as gifts.  This has saved me a lot of money that I have used to fund my other projects (business ideas).

So how are these deals possible?  Mainly two ways.  Most of the deals are either clearance items or are older items that are being phased out.  Businesses are constantly getting rid of their older stock so they can put out their products.  If you wait for this to happen, you can get the items when they are dirt cheap.

Patience is the key with this.  When I wanted to buy some RAM as a gift, I looked on the forums over a month period waiting for a deal to pop up.  When it did, I jumped on it and saved myself a lot of money.  I suggest everyone check it out if you are interested in saving money.

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Who Am I?

June 12th, 2006

I’m 28 years old, a former Marine, recently engaged, and a business owner. My business is ran out of my home office and consists of various web sites that I run.

What is the purpose of this blog?

I spend a lot of my time thinking about and researching ways to make and save money.  I think about investments, business ideas, and deals.  I like to get the most bang for my buck.  Most people find this boring, but for me it is fascinating.

I have found myself helping out friends and family with financial decisions and decided I would start a blog on these matters.  I hope to not only help others become more fiscally intelligent, but to help myself.  The more I work on this blog, the more I will learn about my money ideas.

The goal of this blog is two fold.

First of all, I would like to become financially savvy.  By writing about my ideas and interacting with the community, I will learn more than if I tried to do this all myself.

Secondly, I hope to make others more financially savvy as well.  I like to help others, and if I can help people to make or save money, then I have done a good thing.

So let’s get this blog started.  Hopefully we can learn from each other.

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