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

March 2007

Most people will be receiving a tax refund this year, and many people I know have received theirs already. There are two reasons people would receive a tax refund: either they’re not minimizing their withholding throughout the year and missing out on interest or investment returns they could earn, or they deliberately overpay for the benefit of receiving a large check once a year. Regardless of the reason, it’s fun to decide what to do with the nice check you receive from the government.

CNN Money has five “slam-dunk” uses for a tax refund, and they suggest the typical advice. Fund an IRA, fund a 529, open a CD, add to your emergency fund, and/or reduce your credit card debt. In celebration of my Chinese food fortune last night, “You will have a fine capacity for the enjoyment of life,” here are ten things you can do with a $1,000 to $2,000 refund to enhance your life now, not in 30 years after average market returns.

1. Take a road trip. If you have AAA membership, you can get maps and travel planning for free, and the books they can provide are much better than planning the trip using Google Maps. Ask for the scenic route, and have no specific destination.

Scrooge McDuck2. Pimp your ride. Now that I work closer to where I live, I’m only in my car 90 minutes to two hours each day. Some of my coworkers have a commute of over two hours each way. If they work five days a week for the entire year, that’s 1,040 hours (or more than 43 full days) in the car. If I were be in any certain place for 43 days a year, I’d want that place to be as comfortable as possible. Start with a car microwave but don’t forget about the sound system.

3. Get on television. Perhaps you can convince the producers of House to cast you as a patient with an evasive affliction by offering some cash. If House isn’t your thing, there are other shows that require new actors every episode. For example, NBC is always looking for people to portray rape victims.

4. Emulate your hero. Order gold coins, bill wrappers, and money bags and re-enact your favorite scenes with Scrooge McDuck.

5. Invest in your favorite hobby. Speaking of coins, if you love coin collecting, visit a dealer or reputable eBay seller and pick up the 1909-S VDB 1C or 1880-CC Morgan $1 missing from your collection. Add something to your collection that will make you proud. If music is your hobby, buy a new instrument that you will enjoy. If photography is your thing, get some new lenses.

6. Attend a big sporting event. Get good tickets to the Super Bowl, World Series, or World Men’s Curling Championship. It’s more than just the game, it’s the atmosphere. Sports aren’t for everyone, so for the others, there are the Drum Corps International World Championships, this year in Pasadena.

7. Get a makeover. You are $1,000 to $2,000 richer now. If your outward appearance reflects who you are, you should make yourself look like you spent $1,000 to $2,000 on your looks.

8. Upgrade your gadgets. It’s time to upgrade your television. Everyone else has a wide aspect LCD or plasma screen, isn’t it time you have one, too? If you really enjoy television and movies, there’s nothing wrong with making that experience more enjoyable. It’s your money.

9. Treat your friends. Take them to dinner, see a Broadway show, and/or go to a strip club — whatever your friends happen to enjoy. They’ll like you more if you wave around a few Gs, and it’s all about you.

10. One word: Las Vegas.

If you have any other suggestions for ways to blow $2,000 or so, spending the money today to enhance your enjoyment of life rather than investing for the future, please leave them in the comments here.


After writing about the effect CitiBank’s new balance transfer fee has on balance transfer arbitrage, I received an email from a reader, Andy, who has an idea to take advantage of healthcare savings account (HSA) reimbursements. This is a summary of his idea.

A good way to make some extra money is to take advantage of expected reimbursements. Medical expenses are good examples. If your HSA is efficient and sends your reimbursement quickly after your claim is received, you can deposit the funds, pay the bill by credit card as late as possible, and earn interest until the bill is due later. Here’s how the time line works out:

* 1st of month. I receive a medical bill for $1,000 and immediately submit the claim to HSA.
* Likely before the 15th of month. Receive reimbursement from HSA and deposit into savings account.
* 15th of month (or first day of the next credit card statement period). Charge bill to credit card.
* 15th of following month (or several days after the end of the statement period). Receive credit card bill with $1,000 charge.
* 15th of third month (or credit card statement’s due date). Pay credit card bill using $1,000 from savings.

If you assume that you’re receiving a 1% rebate on your credit card, and your savings account earns 5% annual interest, here are Andy’s calculations, outlining two months of interest plus a rebate on the bill. None of your payments will be late.

Obviously, this is a best-case scenario and the actual return would be lower. Missing the credit card payment will negate any benefit. It’s interesting to note that if your card offers a 2% rebate, the annualized return increases to 18.25%.

What you can earn from this technique is limited by the maximum reimbursement you can receive from your HSA, but if you qualify for other employer reimbursements, you can use them to your advantage as well.


The random comment selector has chosen 2million of My Journey to Financial Freedom to be the winner of the free copy of Quicken Rental Property Manager. Thanks everyone for playing! There were some good comments as well.

Brenda says:

I have 3 rental properties and have been keeping all my books by hand! Ugh!!! Can you imagine the hours this program would save me? I hope to have more properties in the future. I tried using a program called “Saferent” but wasn’t impressed with it. If you choose me as the person to give the gift to and it doesn’t work out for me, I promise to give someone else a go at it. It will not be wasted. Also, if you like, I will let you know if it was helpful to me or if I passed it on.

From Jon K:

I have one rental property now. Just filed my 2006 taxes- the first year to report activity from a rental property. I intend to never sell my residence. In other words, when I decide to move, I want to simply convert my current residence to a rental property. Not sure if that’ll work out, but that’s the plan. I’ve checked out this software in stores before, but I was holding off on buying it. Now that I’m once again in the market for a new home, it might not be a bad idea to have some software to manage my future real estate empire! ;-)

Valerie has this comment about the software:

Rental Property Manager might be OK for anyone who is NOT using Quicken itself. But, as Savvy notes in his review, RPM is very rigid in regard to changing categories, entering prepayments, etc. The big problem for Quicken users is that it is impossible to transfer the data from RPM to Quicken, so if you want a report on your Net Worth, you have to re-enter the data into Quicken. AND you can keep all the same information in Quicken just as well and not need to have a separate program at all.

Robin has a favorable review:

Just to let you know, I do use this software presently for my one and John’s 5 rental properties, and while I probably could have set up an Excel file to do at least some of the tracking for me, this is a much cleaner-looking solution which comes nicely set up. I track all of our income and outlay all year as it happens with this software, then print out all our Schedule E forms simply… One of the best features is that it tracks tenant information, providing nice centralized storage, and even alerts me when I need to update/renew leases…

Again, congratulations to 2million. Stay tuned; I have two more Quicken-related giveaways in the upcoming month or so.


The thing about playing the credit card balance transfer “game” is that you have to pay by the credit card companies’ rules — and they can change these rules with very little notice.

On my most-used card, the Citi Dividend Platinum Select Card, CitiBank lowered the cash back rebate last year, making it more difficult to take advantage of credit card arbitrage.

That wasn’t enough, apparently. It seems CitiBank wants to curb customer profit further. I received this notice in the mail a few days ago:

We are removing the maximum dollar amount on the Transaction Fee for Balance Transfers. This fee will be 3% of the amount of the balance transfer, but not less than $5. This fee is a FINANCE CHARGE.

A $10,000 balance transfer will earn $280 after a year in an HSBC Direct account (if they don’t change rates) assuming you pay off $833 for the next 11 months to pay off the entire balance, and assuming the balance transfer offer is at 0% interest. Of this $280, you’ll get to keep $211 if you’re in a 25% tax bracket. The fee to transfer this balance is $300, so you are actually losing money in this scenario.

The bottom line is that if you have to pay a 3% transfer fee, and you have to pay the balance off within 12 months, there is no scenario in which your interest earned after tax — if your tax rate is anywhere higher than about 5%, and it most likely it is — will exceed the fee. So if you’re going to take advantage of 0% balance transfer offers, find a card that does not have an unlimited transfer fee. Even better would be no fee at all.

The only other option is to find an liquid cash-like account earning guaranteed annual interest significantly more than 5.05%. Good luck.


Bipolar Landlords: Revoking Credit Card Rent Payments

by Luke Landes

For the second time since moving into this apartment several years ago, the landlord (a national corporation, not an individual or a family) has decided to stop accepting credit cards for rent payments. While I suppose this is good for tenants who don’t pay their full credit card balance every month, but I’ll no longer ... Continue reading this article…

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HSBC Direct Will Offer High-Yield Checking, Are You Interested?

by Luke Landes

A reader pointed me to an article about high-yield online checking accounts. I’ve been following these stories with a little bit of “interest,” and I’ve already opened a new checking account at ING Direct. This article talks about some of the drawbacks of this account; namely the necessity of a “regular” checking account for transferring ... Continue reading this article…

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This Week in the Archives: Cable, 401(k) Borrowing, and Credit Reports

by Luke Landes

Each week, I look back at some of the better or more interesting entries I’ve posted throughout the last few years at Consumerism Commentary. Here’s what was on my mind March 23-31, 2006, and it was a busy week: * Mar. 24: Microsoft’s Strategy: Screw the Customer (4 comments) * Mar. 24: Lose Your Money ... Continue reading this article…

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Income Taxes: Done and Over With

by Luke Landes

I decided to bite the bullet and do my income tax return without any professional assistance. I was originally considering working with a tax accountant due to the increased income from my side business. As it turns out, it wasn’t as complicated as I thought it would be. I’m pretty sure I was able to ... Continue reading this article…

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Giveaway: Free Quicken Rental Property Manager 2.0

by Luke Landes

This giveaway is now over. I have a copy of Quicken Rental Property Manager 2.0 to give away. I’ve never used the software before, so I can’t provide any reviews. I don’t see owning rental properties in my near future, so I’d like to send the CD-ROM off to someone who will be able to ... Continue reading this article…

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Best Jobs for Moving Up

by Luke Landes

Salary.com and Money Magazine compiled a list of the best jobs for advancement opportunities. I’m glad I came across this today, as a coworker and I were discussing advancement opportunities within and around our department at the large financial services company where we work. There are many more things to consider than these statistics. In ... Continue reading this article…

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The Cost of Buying a Home: Projected Improvements

by Luke Landes

Last week, I cited an article in the Wall Street Journal outlining the true cost of owning a home over 30 years, which includes much more than just the mortgage. The main issue within the article is a warning to those entering retirement counting on not much more in the way of savings other than ... Continue reading this article…

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Amount Charged is Less Than Estimate: Psychology Involved?

by Luke Landes

When I was helping my girlfriend move to a new apartment this past weekend, we had the help of a moving company. We also had the misfortune of a snow and ice storm. After offering to pay three neighborhood kids to shovel the driveway and get rid of the ice so the moving truck would ... Continue reading this article…

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ING Direct’s Electric Orange Checking Account

by Luke Landes

As it was finally offered to me recently, I signed up for the new paperless checking account at ING Direct. Since I am a current customer of this particular bank, the account opening process was quick and straightforward. Right now, the account offers 0.20 percent APY interest on the first $50,000, which is great for a ... Continue reading this article…

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H&R Block Opens Virtual Tax Office

by Luke Landes

First, Reuters opened a news bureau in Second Life, a virtual reality game that people connect to through the internet to live out fantasy lives in the comfort of their own desk chairs. Now, while Congress is still trying to determine how to tax income in virtual worlds, H&R Block is joining the Land of ... Continue reading this article…

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The Cost of Buying a Home Over 30 Years

by Luke Landes

So you think it’s such a great decision to buy a house? Well, you need a place to live, and it’s better to own, right? Well, the cost of owning a home is something rarely described by proponents. Buy at $300,000, sell at $1,000,000 thirty years from now (an average 5.66 percent annual growth rate) for ... Continue reading this article…

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Carnival News

by Luke Landes

Monday’s Carnival of Personal Finance will be hosted by Lazy Man and Money on Monday. This week’s Carnival was hosted at Sun’s Financial Diary. There were some great articles, including 25 Reasons to Leave Your Job and What Lenders Talk About Isn’t Important, It’s What They Deliver. Hosting the Carnival can be a bit of ... Continue reading this article…

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More Than $50 Wasted

by Luke Landes

No matter how hard one tries to save money, unexpected things happen. The other day, I was driving to work and I was lucky enough to receive a traffic ticket. I was at an intersection making a left turn, and the left arrow had just disappeared. There was still a green light, but according to ... Continue reading this article…

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Shopping at Kohl’s and Being Granted Discounts

by Luke Landes

I’ve found Kohl’s to be a good store when it comes to shopping for clothing. They have sales pretty often, and it’s very easy to find bargains. The clothing seems to be of a decent quality, nothing special, and the items I’ve bought have held up well over the past few years. A coworker had ... Continue reading this article…

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Millions in Taxes Overpaid, Millions in Taxes Uncollected

by Luke Landes

It’s always interesting to see stories in the media that seem to conflict with each other. Here is a case of conflicting messages, although both viewpoints may be true to an extent. First of all, CBS reports that Americans pay too much to the IRS in the form of taxes. This happens mainly because people ... Continue reading this article…

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Weekly Blog Roundup, Birthday Edition

by Luke Landes

I can’t say I’m happy that our President decreed my birthday this year to be 23 hours long rather than the standard 24. Nevertheless, my official age increased today from 30 to 31. Last night, my father treated me and my girlfriend to dinner and a show in New York City, and today I was ... Continue reading this article…

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