Outsource Chores, Job Security, and Social Security
Here are some noteworthy articles I read in the last week or two.
Why I’ve Hired a Maid Service by Flexo at Consumerism Commentary. Flexo decided to hire a maid service for $250 a month even though he knows how to clean rooms.
I don’t see any problem with that. After you contribute enough to your long term goals, you get to choose how you spend the rest of your money. Flexo can afford it. The service does a good job. Flexo thinks it’s worth it. That’s all. It doesn’t matter whether he can or should do it himself. I pay $100 a month for yard service for the same reason.
Make Yourself Indispensable by Nickel at Five Cent Nickel. As I ponder whether I should do something about my job, I welcome this article. Even when economy is bad, you can still create job security for yourself. My previous employer ran into some financial trouble in early 2000s. I was so scared to lose my job. Fortunately I survived.
Career Advancement Or Side Business?
Reader simplesimon left this comment to my post last week Wages During and After Recession:
Regarding how to earn more, check out the I Will Teach You To Be Rich blog by Ramit Sethi. He tries to get people thinking on what their skills are and how to turn that into income. From what I’ve read, many people have taken his advice and created side businesses for themselves.
Inherited IRA and Roth Conversion Pro-Rata Rule
Reader Cheri asked in my previous post The Backdoor Roth IRA: A Complete How-To:
I am curious how an inherited IRA would factor into a conversion, if at all?
That’s a great question. The IRS Form 8606 says
Customer Service Hours at Mutual Fund Companies and Discount Brokers
Today is Good Friday. Stock and bond markets are closed. If you have a question about your account, is the mutual fund company or brokerage firm where you have your money open to answer your questions?
I’m not talking about automated IVR systems. I’m talking about live human being customer service reps.
I polled some major companies about their customer service hours. Here are the results:
Bond Yield and Risks Triangle
There was an article on Washington Post by Robert Pozen and Theresa Hamacher about bonds:
A bond backfire after racing to buy long-term Treasuries and sell tax-exempt funds
Although I don’t agree with everything they said, especially their error about a TIPS fund in taxable accounts, on balance it’s a good article about the yield and risks relationship in bonds. I call it the bond yield and risks triangle.
Wages During and After Recession
Once upon a time, a now-defunct financial media company had a Twitter contest asking people to put a piece of financial advice into three words. My submission was:
Earn, Save, Invest
May 2011 I-Bonds As a Good 11-Month CD Paying 2.5% Or More
Every May and November, the US Treasury announces new rates for Series I savings bonds (I-Bonds). The inflation adjustment is based on CPI changes between September and March.
The Bureau of Labor Statistics announced the CPI numbers for the month of March 2011. CPI-U was 223.467. Compared to the September 2010 number of 218.439, it’s an increase of 2.3% in six months.
Although the fixed rate is unknown, it’s likely to be zero again. Even if the inflation adjustment for the second six months is zero, I-Bonds bought toward the end of May will be a good 11-month CD.
US Treasury Banks With Bank of America
I know many people complain about Bank of America. I saw this stamp on the back of the check I wrote for my 2010 federal income tax.
Free Sales Tax Or Free Financing
I heard on the radio an ad from a mattress store. It says for this weekend only, the store will either pay the sales tax on any mattress purchase or give free financing for 24 months.
Suppose the price of the mattress is $1,000 and the sales tax is 8% (to make math easier), if the customer chooses free sales tax, the customer will pay $1,000 out-of-the-door, sales tax included. If the customer chooses free financing, the customer will pay $1,000 + $80 sales tax = $1,080 over 24 months. That’s $45 per month.
Because the financing customer loses the free sale tax discount, "free" financing isn’t really free. The customer is basically borrowing $1,000 to buy the mattress now and paying it off with $45/month for 24 months for a total of $1,080.
No Tax Advantage In RSU
I heard in a casual conversation that some of my co-workers are holding their RSU shares after the shares are vested. They thought there are some tax advantages in holding the RSU shares.
There is no tax advantage whatsoever.
RSU stands for Restricted Stock Unit. It’s a form of equity-based compensation. The employer gives an employee a number of RSU. The employee can’t do anything with them immediately. That’s the restricted part.
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