As featured in The Wall Street Journal, Money Magazine, and more!

September 2004

Speaking of Fees

This article was written by in Investing. Comments Off

Is your financial manager worth it? Walter Updegrave from CNN/Money answers a writer’s question. The writer has had a financial manager in charge of $400,000 in mutual funds and stocks since 2001, to whom the writer has paid 1% per year, or $16,000 total, in fees. The assets have increased 1% over the past 4 years.

Updegrave tells the reader how to go about determining whether the $16,000 in fees was worth the 1% increase in assets. Some calculations are involved in order to create an appropriate benchmark, and Updegrave points the reader to the Instant X-Ray Calculator in which you may enter your mutual fund holdings to determine your total composition in stocks, bonds and cash.

If you’re paying a crazy fee, your financial manager damn well better be blowing past the market averages. As we all know, the likelihood of leaving the benchmark in the dust is very low.

Annual Fee?!

This article was written by in Investing. 2 comments.

My previously-mediocre-but-not-horrible discount brokerage firm decided to start charging an annual fee… a fee higer than some full-service brokerages. I’m high-tailing it out of there ASAP, and I’m looking to do it without any tax implications. Although, even if I have to sell, the tax burden shouldn’t be too bad.

So, with the several thousand dollars in that account, I’m most likely looking at Scottrade. They have no annual fees and seem to be generally non-evil.

Currently, the entirety of my brokerage account is invested in AIVSX, American Funds’ “Investment Company of America” fund, which seems to do a good job of matching the S&P 500, but not much else. It also has a pretty ugly 5.25% up-front load fee, which pisses me off about as much—or more—than annual fees. In effect, every time I bought shares of this fund, I paid 5.25% higher than the market price per share, with the extra going to the broker. That also means that (put simply) if the fund was getting a 10% yield, it was only a 4.75% improvement over what I paid.

Fees like this on the smaller investors, like me, bug me to no end. It’s obvious the brokerage firms prefer the clients with large sums to invest. They are the people who make the brokers rich. The brokers should accept that (instead of giving the top investors breaks) and leave the little guys alone.

Hooray for Junk Mail

This article was written by in Saving. Comments Off

It’s not technically spam in this case. I signed up for an ING Direct savings account a while ago, and my regular readers have probably seen many entries on Consumerism Commentary about how happy I am with this bank. In fact, at the moment they offer 2.2% APY on their savings account which is quite generous compared to the rest of the world.

About once a week (although it seems less frequent) they send an email containing money savings tips. I had the option of opting in when I signed up. I like the emails because it’s good to be reminded to stay on track and not to spend exuberantly.

Here are their tips for this week. Of course it’s all common sense, but it’s good to have reminders. Be aware that their tips push their products under the guise of a partnership with ihatefinancialplanning.com, which is owned by the ING companies.

Airline Miles Credit Cards

This article was written by in Credit. Comments Off

So, you’ve got a credit card that rewards with with airline miles or points. Yeah, you know there’s a monthly fee and an above average interest. Yeah, you carry a balance each month to win more miles. It’s worth it, right? You’ll get a free plane trip soon, and the value of that outweighs the extra interest and fees you pay. Right?

Not even close. CardWeb.com did some research and came up with the horrifying numbers. It’s a dirty secret that the price you pay isn’t worth what you get.

Flexo’s tip: Get a card with no yearly fee, cash back on purchases (not carried-over balances), and pay your balance off each month. And don’t buy what you can’t afford.

In other news, I have added a link on the top of the sidebar which will allow you to subscribe to this blog using BlogLines.

Financial Update – September

by Luke Landes

I’ve decided to change my accounting technique, so I’ll include some past numbers to show any increases or decreases. For instance, I’m no longer including my “home inventory” and I’ve stopped including what amount I’ve had for “cash on hand,” since those calculations are most likely inaccurate.   09/23/2004 08/23/2004 07/23/2004 Savings/Checking: $ 9,432 $ ... Continue reading this article…

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Random Acts

by Luke Landes

Do you perform random acts of money kindness? Have you ever been the recipient of something unexpected? Besides always tipping generously at restaurants, I try to help people out when they’re in dire need. I’m going to try to keep that article in mind and do more when I can.

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Monthly Update?

by Luke Landes

Some readers have been curious about my monthly status. Some are concerned because I haven’t been posting regular updates over the last few months. Here’s the issue, for some background… In March, I decided to leave my corporate job to teach in a high school. This is what my college education was geared to, and ... Continue reading this article…

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Looking Forward to Raises

by Luke Landes

Raises next year will supposedly be higher than this year, but not by much. Employees who aren’t entitled to overtime pay will see their salary increase an average odf 3.6 percent, and those who are entitled to overtime pay will see an increase of 3.5 percent. Executives, on the other hand, will see an increase ... Continue reading this article…

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Popular Day

by Luke Landes

There were many interesting articles on CNN/Money today. Here are a few summaries. The majority of Americans claim they would continue working if they were to suddenly come into lottery winnings of $10,000,000. 59 percent of people under the age of 50 said they would continue along their career path. If this statistic is ever ... Continue reading this article…

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5 Cent Piece Designs

by Luke Landes

The designs for the 2005 nickel have been released to the public, and here they are. You can click on the thumbnail to view a close-up of each design. Obverse Reverse 1 Reverse 2 It’s interesting to note that the quotation from William Clark’s journal on the discovery of the Pacific Ocean on the second ... Continue reading this article…

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Options for Pulling In a Six-Figure Salary

by Luke Landes

Jeanne Sahadi introducers her readers to some interesting career options if you want to nab that six-figure salary. First off is a general manager of a casino. There is a ton of money in Vegas (or Atlantic City, or even Connecticut) as long as you’re on the right side of the card table. Don’t gamble ... Continue reading this article…

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How To Excessively Spoil Your Kids

by Luke Landes

F.A.O. Schwarz (website, like the company, being restructured) is a children’s toy retailer. Perhaps you have heard about their bankrupcy. The company’s new strategy is to market toys to the children of the superrich. This item on the right is a toy Mercedes, with the price tag of $15,000. My Honda Civic didn’t cost much ... Continue reading this article…

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Making Money in Real Estate

by Luke Landes

“Get an education and buy real estate.” That was the advice given to Stan Taflaw. He is one of CNN’s Tycoons in the Making. With his high salary as a nurse and hospital administrator, and help from his rental properties and real estate sales, he’s been able to put three of his daughters through college ... Continue reading this article…

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