Unsure About Socially Responsible Investing (SRI)
I read this question in a recent issue of the Yoga Journal magazine:
"I don't want to support tobacco companies or environmental polluters, but my broker claims that socially responsible investing will cost me. How can I persuade my broker to make investments that align with my values?"
What Did the Appraisers Do Wrong?
Early in November, the New York state Attorney General Andrew Cuomo accused home appraisal company eAppraiseIt of yielding to pressures from lenders like Washington Mutual and appraising the home values too high. According to the news report, Mr. Cuomo said
"consumers are harmed because they are misled as to the value of their homes, increasing the risk of foreclosure and hindering their ability to make sound economic decisions."
Bought Nothing on Black Friday
The day after Thanksgiving is also known as the Black Friday. Stores open extra early and offer special sale. However I bought nothing on this day. I unknowingly participated in the Buy Nothing Day not because I'm boycotting anything, I just didn't feel the need to buy anything. I don't get the concept of "saving" money by spending money on things I don't need. $250 off a wide-screen TV is good if I need a wide-screen TV. If I don't, it means nothing. When I need it, I'm sure the price will be even lower.
What did you buy on Black Friday? Did you get a good deal? I hope you didn't have to line up early outside the store in the cold.
Take the Bait On No Interest Financing?
No interest, no payments for 12 months! That's a typical financing offer by furniture and electronics stores. I noticed recently some airlines started offering the same type of financing. For example United Airlines has a United Travel Card which offers no interest or payments for 90 days on qualifying purchases. American Airlines' credit card offers 6 months no payments, no interest on purchases from aa.com. These cards are specific to the airline. They don't have a Visa or MasterCard logo. You can't use them for other purchases. If there is no other discount for paying now, should you take the no-interest financing?
Mathematically, maybe. If you keep your money earning interest, and you pay the same amount X months later, you come out ahead, although you don't earn a cash or miles rebate on these. It's the same as the 0% credit card balance transfer game you may have read somewhere.
Of course the stores or the airlines making the financing offer are not foolish. They use the financing offer as an incentive for you to buy from them. The actual financing is usually outsourced to another company. For example United uses Chase and American Airlines uses Citi. The financial company banks on the percentage of people who can't pay in full when the bill comes due. That's when the fun starts. Interests are silently accruing on the side during the no interest, no payments period. If you can't pay off the entire balance before the due date, you owe interest retroactively. And we are talking about interest rates up to 25% a year.
Carnival of Personal Finance #127
The Carnival of Personal Finance #127 is up at Moolanomy this week. My entry was Opt Out of Credit Card Convenience Checks. Here are two articles I'd like to comment on:
5 Reasons You Should Buy A New Car at Gather Little by Little. It's actually 5 reasons you should NOT buy a new car. I have to disagree with the author there. The conventional wisdom of buying late model used cars just doesn't work any more for the cars many (most ?) people want, namely Toyota or Honda sedans. The prices on used Toyota Camry and Corolla and Honda Accord and Civic are bid up to a point which makes more sense to buy new and drive until they die. The car dealerships make much more money selling used cars than selling new cars because new cars have become a commodity, which makes comparison shopping easy.
What To Do If Your Health Insurance Says Your Treatment Is Not Covered
Last Friday, I happened to pick up a copy of the Wall Street Journal somebody left on the train. There was an intriguing article on the front page — How U.S. Health System Can Fail Even the Insured. There's also an online video for the same story.
It's a long story but the story line is familiar. A Mrs. Barbara Calder has a rare genetic illness but she had to jump through one hoop after another to get her health insurance to cover the treatment she needed. I'm going to use this case as an example to show what to do if your health insurance says the treatment you need is not covered.
Here's a timeline of the events. I'm marking my comments with [TFB].
Opt Out of Credit Card Convenience Checks
It's getting close to the holiday shopping season. I have received several convenience checks from my credit cards. These convenience checks are usually treated as cash advance which carries a fee. They also make the grace period on purchases disappear. I usually just shred them.
I called my credit card company about something else yesterday. While I had the agent on the line, I asked her if they can stop sending me those checks because I will never use them. To my surprise, she said yes. They don't advertise it but they do have an opt-out list. They can exclude you from the convenience checks mailings only if you ask. Perhaps not all credit card companies have a list like that, but if you hate those convenience checks like I do, it's worth a phone call.
Dealing With the Fallen US Dollar
It's all over the news. The US Dollar fell against the Euro, British Pound, Canadian Dollar and other major world currencies. The recent Yahoo! Finance poll with more than 130,000 votes shows that people think it will go even lower a year from now.
About 3 years ago, in the end of 2004, there was also a lot of talk about the weak US Dollar. At that time the US Dollar:Euro chart looked like this:
Cost of Driving One Mile
Today is Veteran's Day. I'm able to take the commuter train today because many people are off today. I'd like to take the train more often but there is very limited parking at the train station. I sometimes drove to the train station and had to drive away because there was no parking. Taking the train is not only good for the environment, but also good for the pocketbook.
How much does it cost for driving one mile? The cost of gas is only a small part. If gas is $3.00 a gallon and you get 25 miles per gallon combined city and highway, that's 12 cents a mile. You have to also include the cost of the car. If a car costs $20,000 and it lasts 200,000 miles, that's another 10 cents a mile. Add in financing, insurance, cost of oil changes, tires, brakes, repairs, the tab goes up and up. The IRS sets the vehicle mileage reimbursement rate at $0.485 per mile. By my calculation, it's pretty close. For the sake of simplicity, let's just call it 50 cents per mile driven.
Back From Vacation, Catching Up
I'm back from my vacation. It was a good one. As you can imagine, after being gone for four weeks, there's a lot for catching up, both at work and at home. Blog posting will still be slower than usual.
The good news is that nothing finance-wise was screwed up. All my bills at home were paid, thanks to pre-scheduled online bill payments. There wasn't any problem with money outside the country either. My traveler's checks were gladly accepted. My Fidelity mySmart Cash ATM card worked overseas without any problem. It got me a good exchange rate too. The stock market didn't move too much. The limit orders I set up before I left weren't executed. Too bad the Fed lowered interest rate again.
My vacation in one of the poorest countries in the world is an eye-opener for me. Many words acquired new meanings. I feel really lucky living in the United States. To people in a developing country, the stuff that we complain about all sound like whining. People over there get by with so little and they are still happy. We have so much and we still complain. For example, this young man carried 80-100 pounds of stuff for us up and down the mountains, wearing flip-flops. This is a high paying job for him although it pays less than $10 a day. Just to travel to his next job site and make himself available for the job, he's going to take a bus for 8 hours and then walk for 3 days.
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