Marketplace Money, the personal finance program on public radio, had a segment on 401k plan fees a few weeks ago. The host Tess Vigeland interviewed pension consultant Matthew Hutcheson, who said 90% or more of all 401k plans pay 3-3.5% in fees. Here’s a quote from the transcript: Vigeland: How high do some of these […]
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Fed Opens the Vault
Make it 3 for 3. Yesterday I said the Fed might come out with an emergency cut after the stock market dropped below the previous low. Well they didn’t do exactly that but they pulled out something else. They are going to open their vault and let banks borrow against the mortgage backed bonds they […]
Want to Encourage Savings? Simplify the Tax Rules
It has been reported that the savings rate in the United States is negative. I’ve heard arguments saying it isn’t really negative but I think it’s fair to say that the savings rate is very low. Everybody wants to encourage people to save, which is great. We already have a hodgepodge of tax favored programs. […]
How $2,000 Became $20 And What To Do With It
In my foolhardy days, I bought WorldCom stock when it dropped from $60 a share to $4 a share. I thought it was a “buying opportunity.” When it dropped more from $4, I thought I had only a “paper loss.” You know the rest of the story. WorldCom went bankrupt. I lost $2,000. Later, some […]
Mortgage Refinance: Closing Process Explained
My mortgage refinance has been approved by the lender. Now it’s time to pick a date for signing the papers. Is any day of the week better or worse than others? Yes, if you want to avoid paying extra interest on a large sum of money. The federal law (15 USC 1635) says if you […]
What a Recession Feels Like
I rented from Netflix the documentary Roger & Me by Michael Moore. This is the first film by Michael Moore which made his name. Whether or not you agree with Michael Moore’s liberal point of view, the film offered a good reminder of what a recession feels like. In case you haven’t seen it (the […]
Restricted Stock Units (RSU) Sales and Tax Reporting
RSU stands for Restricted Stock Units. It’s the new form of stock-based compensation that has gained popularity after the employers are required to expense employee stock options. The biggest difference between RSUs and employee stock options is that RSUs are taxed at the time of vesting while stock options are usually taxed at the time […]
How To Avoid Overdraft/NSF Fees
There is a long discussion on Wesabe Groups about overdraft fees. Some banks call it NSF which stands for Non-Sufficient Funds. In case you don’t know, banks apply the debits in a way that maximizes the number of instances of overdraft. They sort the debits on a given day by the amount and apply them […]
Restricted Stock Units (RSU) Tax Withholding Choices
Ever since the companies are required to expense employee stock options, more companies started to grant the employees Restricted Stock Units (RSUs) instead of stock options. The first batch of RSUs I received will vest shortly. Unlike non-qualified stock options which are taxed at the time of option exercise, RSUs are taxed at the time […]
"No Cost" Mortgage Refinance: Stepping Down the Ladder
I posted last week that I’m refinancing my mortgage. Now I can add more details. I lowered the interest rate on my 15-year fixed rate mortgage by 0.25% from 5.125% to 4.875% using a “no cost” refi. All closing cost will be covered by the lender. In exchange, my rate is higher than what it […]