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

February 2007

Here is Kiplinger’s predictable 12-step program for becoming a millionaire, which inevitable contains “… and wait” somewhere. This guide is geared towards corporate workers who live and die by the paycheck.

1. Keep your eyes peeled for better ways to do your job. While Milton Wadams was slowly finding himself out of a job, thinking of something creative will help you stand out and make executives want to keep you around.

2. Don’t be afraid to negotiate. Here are 8 tips for negotiating a salary. I’m not quite up to expert negotiator status, and I’ve had this book on my wish list for a while.

ducks-row.jpg3. Get your ducks in a row and your numbers on paper. There’s another vote for checking your market range on Salary.com, but I still believe their surveys are inaccurate.

4. Plot your strategy when it’s time to move on. The article suggests creating a professional-looking MySpace page. Do recruiters and hiring managers look at MySpace when making their decisions? I find that very hard to believe, even when we’re living in the future like we are. I do think it’s important to have a professional internet presence, but I think most corporate workers are better off ignoring MySpace.

5. Contribute as much as you can to your 401(k) and other tax-deferred retirement plans… and wait.

6. Flex your tax-saving muscle. Use a flexible spending account to pay for medical expenses to reduce your tax liability.

7. Review your tax withholding. The article points to this tax withholding calculator so W2 workers can ensure they’re not giving the government an interest-free loan. That money can go to work throughout the year, if you’re disciplined.

8. Stash savings in a Roth IRA if you’re eligible. The law says you’ll be able to withdraw your earnings after retirement without any taxes due. Let’s hope they don’t decide to change that law in the next thirty years or so.

9. Don’t delay. The best time to start thinking about increasing your net worth all ready passed. Since no one has yet perfected time travel, the next best time to start is now, and you’ll regret it if you don’t.

10. Invest automatically. When your money automatically disappears before you can touch it, maybe you won’t even notice it’s not there. When I first started my corporate job, I signed up for Direct Deposit because it was a pain to get to the bank. Then I set up automatic transfers from that checking account to a savings account slightly out of reach for everyday expenses.

11. Watch for fund fees. Even index funds can have high fees, so don’t make any assumptions. Check your prospectus before you make any investment decisions, and learn how to understand it so you know what you’re reading.

12. Keep it simple. The article says it: “Be wary of get-rich-quick schemes or sales pitches for complex investments, such as oil-and-gas partnerships, that trade on the millionaire cachet to lure investors into buying high-fee products they don’t understand. Most millionaire households accumulate their wealth over the long term by sticking to a regular investing plan in a balanced portfolio.”

Each of these 12 steps makes a small difference in the immediate term, but if you hang on and build these thoughts into your personal philosophy, eventually the rewards will be in your bank account. [Kiplinger's Personal Finance/MSN Money: 12 steps to become a millionaire]


Along with my monthly checking and savings account statement, I received the following notice in the mail:

Important Message for Personal Account Holders Who Use Quicken, QuickBooks, or Microsoft Money

Beginning April 1, 2007, a monthly fee of $5.95 will be assessed if you access Wachovia Online Banking directly from within your personal financial management software such as Quicken, QuickBooks, or Microsoft Money.

This monthly fee does not apply if you download your personal account information from wachovia.com into personal financial management software or if you have a Crown Select, Crown Classic, Crown Banking, Crown Access, Crown Regular, Crown Interest, Custom Banking, Performance Banking or Command Asset Program account.

The notice also says that by upgrading to one of the listed account types, I can avoid the $5.95 fee. When I originally upgraded to Quicken 2007, I was no longer able to connect directly to Wachovia using the software. While I’ve fixed the problem, now I always download my activity by logging into my account on wachovia.com. As long as I continue to do so, I won’t be charged the $5.95 monthly fee.

This is an example of Quicken’s high cost to the banks being passed onto the consumer — banks have to pay Intuit to support Quicken’s file format.


As I mentioned earlier, I finally picked up the Martin D-15 acoustic guitar I’ve been planning to buy since August last year. Here are some tips if you’re thinking about buying a musical instrument.

electric guitarFirst, if you are buying an instrument for your son or daughter just starting out, you may find out later that they want to switch to another instrument or the teacher recommends one that might fit the student better. You may also find out before long that they have no interest whatsoever.

The music stores will try to push a “rent to buy” program in which you pay a small amount every month until you’ve paid off the entire cost of purchasing the instrument. In most cases, this is not a good deal. The stores will make sure you pay more than what the instrument is worth. If you’re buying an instrument for a young beginner, see if the school can loan an instrument or try to find a family or friend who would be willing to part with a used instrument. Don’t buy a used instrument, especially if it is a wind instrument.

If you’re buying an instrument for yourself, and you’re a beginner, take a more experienced musician with you. The most important point is to try a number of brands and models to find an instrument you feel comfortable with, but if you’re not quite the most talented yet, but a helper will be able to provide unbiased opinions.

While you are trying out instruments, a process known as “auditioning,” ask for instruments fresh from the factory. In many cases, instruments that are displayed on the floor have been out for a while and may have passed through hundreds of hands.

If you want to buy online, you have no way of auditioning the instrument. I highly discourage buying an instrument online. Even if the online retailer offers the Best Return Policy Ever, it will still be a hassle.

Here’s a little about price.

There is only one “price” you’ll need to know about once you decide on the brand and model. Ignore the “manufacturer’s suggested retail price.” This number is usually highly inflated to provide the false sense of a bargain. When I was in college, the professional model clarinet made by the manufacturer called Buffet had a MSRP above $4,000.

Ignore this price. The manufacturer sets another price: the lowest advertised retail price. Retailers are not allowed to advertise the instrument for less than this price. Again, when I was in college, the Buffet R-13 model was advertised for no less than $1,600. This sounded like a great deal.

In fact, most musical instrument stores have a “price match guarantee,” where they will offer to match a lower price advertised by any other retailer. Of course, this is a joke as the manufacturers control the advertised price. This may work out in a few cases in which a manufacturer lowers the advertised price, but don’t count on this happening.

Most people will simply pay this lowest advertised price, think they got a great deal thanks to the bogus MSRP, and move on with their lives. You cannot hand over cash or a credit card without negotiating. The music stores have a third price for their inventory, the market price or “street price.” This is the only price that matters. Depending on market conditions, this price will move up and down, and may differ between retailers.

You will have to negotiate with your salesperson. It helps to subtly let the salesperson know that you understand that the lowest price guarantee is a joke and you were hoping they could come down on the price. I’ve also found that it doesn’t pay to press your luck. The first offer is usually the lowest they will go when you’re dealing with major stores like Sam Ash and Guitar Center. Salespersons are trained to recognize the savvy shoppers are don’t want to screw around and miss the sale.

What about the extras they push?

Sometimes your instrument comes with additional accessories or replaceable parts. Some of the originally included accessories should not be used if you’re looking obtain the best sound and comfortability. You should seek the best sound and comfortability because doing so will raise the enjoyment you gain from playing an instrument. Here are some examples.

* Guitars: buy a set of good strings. If you’re new to playing, get recommendations.
* Wind instruments (brass and woodwinds): buy a good mouthpiece. The mouthpieces included by the manufacturer will usually be a poor choice. A good store will have a wide selection and allow you to audition mouthpieces.
* Woodwinds: buy a box of good reeds.
* Drums: get a set of batter heads from a brand that specializes like Remo and sticks from Vic Firth.

Follow these tips and your enjoyment of music will last longer. You’ll find the right instrument for you and you’ll know you got a good deal.


Getting out of debt is a great goal to have. Perpetual debt is like slavery. All the money you earn beyond your necessities for living is turned over to someone else in the form of debt service and interest, and in many cases even your basic needs are paid on credit. Creating and enacting a plan to break this cycle is admirable.

Every once in a while I hear about someone swearing off all forms of credit as evil or unnecessary. Here are some reasons from MSN Money why being debt-free can be costly.

1. With no credit history, you will find it difficult to get a mortgage with a decent interest rate or at all. Those completely against debt shouldn’t be looking for a mortgage in the first place, though. Living at home until building up enough of a savings account to pay for a house in cash might be a bit too much to ask for most people.

Not all debt is created equal… Some debt — mortgage debt being the classic example — is tax-deductible and gives individuals the opportunity to improve their quality of life and set themselves up for a comfortable retirement.

Lenders consider those with no debt only slightly less risky than those with bad credit.

2. The article gives the example of a couple who decided to live debt-free after graduating from college. They saved to pay for their home with cash.

The family stayed completely debt-free for nearly two decades. Then the couple decided to embrace a little debt in order to build the house of their dreams… To pay off their $150,000, 15-year mortgage faster, the couple has been prepaying it with any extra money that comes in. After just three years, the balance is down to $79,000.

Mathematically, if they didn’t pay down their mortgage faster, they could have invested their extra funds.

Mortgage and student-loan debt are generally fairly cheap and leave you with an appreciated asset. Plus, the interest you pay on these loans is deductible. Having this kind of debt can actually get you ahead if you invest extra cash rather than put it toward your loan principal.

This requires discipline, a trait that some people have, some people don’t, and most people think they have but don’t.

I’m not going to preach. I can’t tell you that a life without debt is the only way to live, or even the “best” way. Mathematics show that in some cases the user of credit pays off. The only people who believe mathematics contain the answers to all life’s problems are mathematicians.


Weekly Blog Roundup: New York City, Raise and Bonus Edition

by Luke Landes

For a few more days, I will be running a contest to give away a new copy of Quicken Basic 2007 to a random winner. Entering is simple: just leave a comment here! I’ve taken the upcoming week off from work (the “day job”) to coincide with my girlfriend’s break from teaching. We had a ... Continue reading this article…

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Quicken Hack: How to Track Airline Miles or Points

by Luke Landes

One of the features I liked when I used Microsoft Money was the ability to track airline miles or points. I didn’t accumulate many, but it was good to see what I had available in one place rather than going to the individual airline websites. I switched to Quicken and I was disappointed to find ... Continue reading this article…

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Surprising Amount of Office Romance

by Luke Landes

There’s a winter storm here on the east coast, and with a practically empty office, minds aren’t on the job. According to a survey from Vault.com reported on CNN, it’s common to be thinking about other things, like love, in the workplace. 17 percent of survey respondents admitted they were caught being more-than-colleagues… “in the boardroom, ... Continue reading this article…

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5 Tips for a Frugal Valentine’s Day

by Luke Landes

Do you want to be romantic and save money? In a world where romanticism is portrayed by the media as the giving of expensive gifts like diamonds, a Lexus, and a tropical vacation, romanticism and frugality are seen as incompatible. Here are some ways to bring the two concepts together in a beautiful marriage of ... Continue reading this article…

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Spending More Money on the Internet

by Luke Landes

Here are five reasons according to Forrester Research people spend 15 percent more on the average online transaction compared to a traditional transaction from a brick-and-mortar store. You don’t have time to think. Once you have items in your cart, retailers want to move you through the checkout line before you can reconsider. If you’ve already ... Continue reading this article…

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A Teen Millionaire’s 3 Principles to Success

by Luke Landes

This is an excerpt from You Call the Shots, by Cameron Johnson. You can find my full review here. In this guest post, the author shares 3 principles that led him to succeed. I started my first business at age nine with $50 and a home computer, and ran it from my room at home ... Continue reading this article…

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Guest Post: Why Did I Decide to Write a Book?

by Luke Landes

At the age of fifteen and as a freshman in high school, Cameron Johnson’s internet company had grown to sales in excess of $15,000 per day. Cameron is now 22 years old, and his most recent endeavor is writing. Cameron Johnson is the author of You Call the Shots, a book I highly recommend. In ... Continue reading this article…

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Financial Ratios for Personal Evaluation: Debt to Income Ratio

by Luke Landes

The main reason I first started Consumerism Commentary was to publicly track my financial progress from “down-and-out” to “not quite as bad.” I started plugging my financial details into Quicken, and like Kara from Ka-Blog says, watching your net worth grow is addictive. There’s more to your finances than just the bottom line, though. I ... Continue reading this article…

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Review: You Call the Shots by Cameron Johnson

by Luke Landes

Cameron Johnson features testimonials from T. Harv Eker and Donald Trump on the dust jacket for his new book, You Call the Shots. The book also includes a foreword by David Bach. However, this book outshines in many ways what I am used to seeing (over and over) from the typical financial gurus like Trump ... Continue reading this article…

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The Carnival is Up, and Thoughts On Finance Writing

by Luke Landes

The Simple Dollar is hosting the latest Carnival of Personal Finance, and it was full of good articles from the past week. I’ve noticed a shift in writing style in the personal finance niche over the past year or so. I like the personal stories. This “personal level,” missing from traditional media, is so easily ... Continue reading this article…

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Study: Money Makes People Mean

by Luke Landes

A recent study entitled The Psychological Consequences of Money shows that people with money on their mind are less likely to help others. Here’s the abstract: Money has been said to change people’s motivation (mainly for the better) and their behavior toward others (mainly for the worse). The results of nine experiments suggest that money ... Continue reading this article…

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The Simple Dollar Will Host the Carnival

by Luke Landes

The Carnival of Personal Finance will be hosted on Monday morning by Trent from The Simple Dollar. He tells me he’ll be assembling the submissions while watching the Super Bowl. I encourage all bloggers to provide Trent with your best money-related article from the past week so he’s not bored during the game. There’s a ... Continue reading this article…

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Bad Job-Hunting Tips You Must Avoid, Part 2

by Luke Landes

Penelope Trunk from Yahoo Finance published an article busting job-hunting myths. I looked at several of her un-tips yesterday and in Part 2, I’ll finish off my thoughts. Bad Rule No. 5: Don’t have typos in your résumé I’m not recommending that you misspell words on purpose, but I am recommending that you chill out ... Continue reading this article…

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Personal Income Statement, January 2007 (Net Income: $5,415)

by Luke Landes

If every month this year turns out like January 2007, I’ll have nothing to complain about, except the amount of work I have to do. You might want to check my balance sheet first, or jump right into my income and expenses.

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Bad Job-Hunting Tips You Must Avoid, Part 1

by Luke Landes

I’m starting to like some of Yahoo Finance‘s new personal finance content. In a new article, Penelope Trunk warns readers of common but poor advice one often hears from friends and colleagues when hunting for jobs. Trunk’s point of view is interesting, and I’ll have to keep these ideas in mind when (if?) I ever ... Continue reading this article…

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