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Thoughts and Advice from FMF Readers

Much of the quality content here at FMF comes from the comments. There's a lot of wisdom, experience, and good advice on almost every post as readers with some great perspectives leave their thoughts. If you don't read the comments here at FMF, you're missing out!

Every once in a while I select a few that I want to be sure everyone sees for one reason or another -- they offer a helpful tip, raise an interesting point, or so forth. So today I'd like to share three recent comments with you. One is a GREAT tip (and something I'll apply) while two others hit upon things I've been thinking about/seeing in my life or the lives of others.

So let's get started. Here's a comment on my post titled Get Rid of Your Stuff: Make Money, Declutter Your Life, and Help Others. I had noted that every season we go through our closets and pick out the clothes we didn't wear. We then give those away or sell them at a church used clothing sale. Here's how one FMF reader takes this idea to another level:

One thing I learned years ago is that after you purge your closet of clothes you don't wear anymore, to then turn all your hangers around backward on the rod for the clothes you're keeping. After you wear an item, turn the hanger back around the right way. You'll be shocked how many hangers are still backwards at the end of a season - even after you did what you thought was a thorough purge of your clothes at the beginning of a season.

I LOVE this idea -- and we'll be implementing it for sure at our house.

The next comment came when I announced my March Money Madness winner, a post about how a blogger "broke the rules" and bought a new car. One reader responded:

Rules are made to be broken.

Personally I have been looking for a car for my teenage son and I am surprised at the cost of used cars. People and dealers want exorbitant prices which tilt in favor of buying [new]. Until the economy turns around and the demand for used drops I don't see this changing soon.

I am not willing to pay $12k for a 4 year old car with 80k mile on it when I can buy a brand new comparable car for $17k and zero miles on it. (I am talking Saturn Astra to the Chevy Sonic)

The $1250 in depreciation per year is worth the peace of mind over the 4 years, under warranty and you know how the car was driven.

This is exactly the same situation a friend of mine encountered. He wanted to buy his son a used Subaru Forester. But the best ones he could find were vehicles with over 50,000 miles and were only $3,000 less than a brand new one. So, he bought new. I would have too. (Then again, I buy new anyway.) :)

I think the car-buying "rules" are changing. While buying used may still be the better option in the majority of cases, it's no longer a "no brainer" in all of the cases -- and especially with particular models.

Is anyone else experiencing the same thing as you look to buy a new/used car?

Finally, here's a comment on my post The Key to Great Investment Returns that I've been grappling with myself:

I am an advocate of saving and shunning debt but I can't agree that the 401-k millionaires are the winners! Here's why, I recently worked with a friend of mine who retired early at 48; with a million in his 401-k. He had other savings outside his 401-k but not nearly enough to cover day to day expenses etc. So, he ended up dipping into his 401-k-taxed at normal rates with a penalty.

Upon reflection he wishes he had spent more efforts building a million dollar cash portfolio which threw off a lot of income. For those really serious about retiring in their 40's and 50's start thinking about what my friend came up against and maybe structure your portfolios differently.

Exactly. If you plan to retire early and yet have the majority (or even a decent portion) of your retirement savings in 401ks and IRAs, then you better have a GREAT plan on how to live off the non-tax-advantaged savings you do have. Otherwise, you're looking at some big penalties for early withdrawal. Yes, there are ways you can get at the money, but they constrain you at least a bit. Here's what CBS says about what I'd consider to be the best option for doing this (it's one that the majority of people are likely able to at least consider):

Substantially equal payments. If you want to turn your retirement money into an income stream before you're too old, you can do it with the help of what the IRS calls rule 72t. This allows you to dodge the penalty as long you take the money out in "substantially equal" payments over your remaining lifespan or that of you and a beneficiary.

There's even a loophole within this loophole. The payments don't' really have to stretch over your remaining lifespan. You've satisfied the IRS if the payments last five years or until age 59 ½, whichever comes later. After that you can take out as much or as little as you want.

There are a handful of ways your withdrawals can qualify as "substantially equal" in the eyes of the IRS, and they can get complicated. The web abounds with 72t calculators to help you sort things out, but you might want to double check the formula you settle on with a tax adviser.

So there are ways to get at your tax-advantaged money early, but they aren't really great.

I have roughly 60% of my retirement savings in either my current 401k or IRAs that were funded from 401ks at past jobs. So if I ever wanted to retire early, how would I manage doing it without some complicated (and likely expensive) moves (not to mention the lack of flexibility issues.) As a result, my retirement plan schedule by year lists what funds I have access to and what funds I don't in any given year. These numbers give me a really good feel for when I might be able to retire early.

Anyone else grappling with this issue (or have you worked around it)?

Good Advice from FMF Readers

There have been several insightful comments lately here at FMF on a variety of topics. Since I know that everyone doesn't read all the comments in every post, I wanted to call these to your attention so you didn't miss them.

The first is from Apex and was left on my post titled Six Steps to Making a Successful Low-Ball House Offer. His thoughts:

The first thing to understand is what a lowball is. Lowballs are only possible if the listing price is too high. You can rarely buy a property for considerably less than market value, only for less than the irrational price the seller wants. If comparable properties are selling for 200k and you think you can convince someone to sell you theirs at 160K or even 180K pray tell what amazing powers of persuasion and hypnotization you have that would convince any sane person to sell to you for that price? Most sellers think their property is worth more than market, not less. Along those lines a better strategy is to try to find properties that are priced closer to market than to try to lowball properties that are considerably overpriced. Paying sticker is a good deal if the sticker is right.

The second thing to understand is that you can't reason with irrational sellers. Very few of the things on this list will do you any good with an irrational seller. Someone asked about tips for dealing with an irrational seller. Here it is, find another seller.

The things on this list are decent but if your goal is to purchase for less than ask then there is really one item that is most important and it's not on this list. That item is time on the market.

Sellers pick a price for a reason. The reason is often entirely invalid but they don't believe that. Only time will show them that their price is wrong. The longer a property has been on the market the more likely it is that the seller will realize it is mis-priced and be willing to accept lower offers. This is of course no guarantee with an irrational seller but it is the number one indicator to determine how much below ask you can offer.

If it is a bank owned foreclosure property time on market is almost the only thing that matters. Banks are basically computerized in this respect. You can watch them drop the price on a schedule until they find the price at which the market will bring in buyers.

There is one other thing that can get a lower priced offer accepted, perhaps even below market. That is if you find a seller who is desperate. Perhaps someone going through divorce, or who needs cash to save a business that is squeezed or some other personal problems that require cash. If someone is desperate they are going to sell quickly because they need to. This is the only situation where someone is going to sell to you drastically below market. Why else should someone sell to you considerably below what other houses are selling for. If you think you can purchase a property far below market value you better be willing to offer on 100 houses to find the one seller who is desperate or get prepared to be regularly disappointed.

Drastically below market deals only happen on late night real estate shark commercials. And none of those are real.

As many here know, Apex knows real estate quite well. His advice is to be especially listened to in this area and I think the above is GREAT counsel for those looking to get a "deal" on real estate.

The next comment was left by Alex on my post titled Another Plug for the Thank-You Note. His comments:

As a hiring manager, I agree with mdb's comment. Thank you notes typically come well after I've made a decision.

The biggest mistakes I see candidates make in an interview?

1. Show up late for the interview (about 50% of all candidates make this mistake).
2. Criticize a previous employer.
3. Fail to bring a "leave behind" such as a resume to share.
4. Appearing disinterested. They either don't listen to/answer the question being asked, talk too long, or speak over the interviewer.
5. Appearing underprepared or on the interview circuit. They don't research the company.
6. Overly nervous or body language that lacks confidence.

If you can avoid these mistakes, you'll have a good shot at the job. After all, to make it to the interview, you've already passed the paper cut for qualifications -- the interview is essentially a manners test.

A couple thoughts:

• He and I disagree on the usefulness of the thank-you note. I think this is highly dependent on the type of job you're looking for. If it's very entry-level, then the hiring decision most likely will be made before a note can get through the mail, so perhaps an email is called for. But at higher levels, the hiring process often drags on a looooong time (believe me, I know) and there's plenty of time to mail a note. In addition, a thank-you at a higher level demonstrates a level of care and follow-through that you'd expect of a manager or executive.


• Everyone should note and avoid the mistakes he lists. Really, this stuff is a lay-up. Be on time, be prepared, and present yourself well and you'll have a great shot at the job.

The next two comments came from my post titled Four Reasons Resumes are Rejected.

The first is from Walden:

I am a recruiter and I review hundreds of resumes each week. I would absolutely agree with all of the above points. If I had to boil it down even further, I would say the top 2 reasons I reject a resume is 1) not telling me right away why you are right for this job, and 2) grammatical/spelling errors.

I'm busy. The hiring managers I work with are busy. If I have to comb through your resume looking for related experience or qualification ABC, forget it. I don't need a long cover letter, but putting a one or two sentence "Professional Summary" at the top of your resume detailing what skills/background you have that are a fit for my job is priceless. Then, spend a little time highlighting applicable experience from your recent positions, do a spelling/grammar check, then do ANOTHER spelling/grammar check, and send it off!

My comments:

• I don't like the cover letter or summary on a resume because it's fluff IMO. I'd prefer that more time and space is spent on work experience. I can tell if you're right for the job based on what you've done and accomplished, I don't need you summarizing your career. Then again, Walden is a recruiter and I am not, so maybe it's better to listen to him. ;-)


• Got to agree that everyone looking at a resume is BUSY. That's why the resume needs to sell, sell, sell (with good accomplishments all over it) from the get-go.


• 100% agree on the spelling. Have a few friends look over your resume before you send it off.

The next is from texashaze -- and it reinforces much of what we've already covered:

We're always interviewing and hiring. Cover letters are never looked at and in fact they aren't even given to us by our screeners/HR. Walden provided a good tip to put 1 or 2 sentences on top of your resume. I always read those and rate them high. Also anything over 2 pages is too much. Finally write your resume to the job. Some resumes I get don't even relate to the position.

I know there have great comments before and since these were made, but I wanted to at least select a few to show you what great and knowledgeable readers we have here at FMF. And why you should always read the comments -- they are often better than the posts! ;-)

What is Money?

Here's a long but interesting comment that a reader recently left on my post titled Money is a Tool. I felt it was worth sharing with everyone since it's likely to spark some discussion:

• What is money? With all the literal and varied interpretations of what is money all about, let me point my views about it.

• Money is just a medium of exchange. You need money to transact business and exchange from the goods or services you want to buy or have.

• Money is just a medium for barter. To facilitate the transaction of business or trade you use money. Bartering as a means of transacting business is slow, obsolete and burdensome.

• Money is a certificate to pay the settlement of debt. Money is the universal symbol to pay debts, moral damages, even heal personal wounds and to erase wrongs committed by others.

• Money is an employee. Yes, money to some is regarded as employees since it can work for you to create more money. When in reality sometimes money is better than an employee because it does not create labor unrest and does not provide personal problems.

• Money is just like manure. Money is just like manure, you stuck it in one place it smells, you spread it, it prospers and turns to be just like a fertilizer to grow more plants.

• Money is just like a friend. Money is just like your friend, spend it and it is like discarding your friend. Saving money is like keeping your friends. The more you save it, the more friends you will have.

• Money is an instrument to spend it and acquire goods or services. In its basic sense, the only purpose of money is to spend it and to acquire the service you want to have in your life.

• Money is the oil that makes life run smoothly. With all the wrong notions of money, money can make our life run smoothly. It can pay our bills, food, vacations, education and luxuries in life.

• Money is just for enjoyment. Money according to some pragmatist was only invented with the sole purpose to enjoy it, nothing more nothing less.

• Money is a storage of wealth. Money could be saved for greater benefits it will provide in the future. It is a mode of delaying instant gratification for future long lasting and prosperous future gratifications.

• Money is just like a hall mark card. Money that we part is merely just like a card with beautiful writings and dedications in it with the exchange of something else - stuffs, services rendered and luxurious goods for the rich to acquire.

• Money is just an energy. Yes, money is just an energy that is why it is called the currency and since everything in this earth and the entire universe and galaxy is made up of ever changing wave of energy. Concentrate upon it and it surfaces, neglect it, it turns into waves of energy again.

• Money is just a dirty peace of paper with the pictures of long dead persons. For the common Tao, money is just a piece of paper with some pictures and inscriptions upon it which is in itself in essence also correct.

• Money is just like your leg or arm, use it or lose it. Money is just like your legs or arms if you do not use it then it becomes useless.

• Money is like the earrings and jewels that rich men give to their wives. Money is precious, they are like the diamond earrings that the rich give to their wives that is why it is very costly.

• Money is neutral. Money is neither good nor bad, it stays neutral. It can be good when it serves as utility and useful purpose and bad when use for evil designs.

• Money is wealth when used for utility purposes. When money is used for public service and for the betterment of the nation it becomes wealth.

• Money is God in action. Money use for tithing and returning it back to God is the recognition that everything belongs to Him. We are merely the stewards of God's money and His creations.

• Money is the extension of your own self. Money is the reflection of who you are. If you are charitable when you have only few of it then that will be your nature when you have plenty of it. If you can manage money with very few of it then your can be entrusted with plenty or perhaps millions of it.

• Money is power. He who has the money is powerful. Money answers everything. Money speaks. He who has the gold rules. Money makes the world go round.

• Money is not real, it is the representation of something else. Money in itself is just a plain piece of paper. It is the people who place meaning into it that makes it valuable.

• Money is receipt and receipt is money. You must print receipt to acknowledge the receipt of money and goods or services you have delivered. Ancient times acknowledges the deposit of gold and silver by issuing receipt which can be loaned for more gold which is the symbol of business transaction.

• Money is commodity. If you have commodity you can sell it in the market for money. If you have money you can buy commodity or services.

• Money is just a servant. The more money you have, the more it can serve you, other people, the community and the world that we live in.

• Money is a tyrant master. Money can be a tyrant master if you are indebted with so many debts and obligations. You become the slave of money if you borrow money you cannot afford to pay because you will be burdened with financial obligations to pay together with the surcharges.

• Money is a tool. Money is just a tool to acquire goods and services. It is neutral, not good not bad. It is just a tool for you to acquire economic goods without which life's activities can be drudgery.

" MONEY SWORE AN OATH THAT NO ONE WHO DID NOT LOVE MONEY SHOULD HAVE HER." OLD IRISH PROVERB

FMF Reader Shares Success Story

Here's an email I received this morning:

I know you like getting emails like this and wanted to share another "glad we made this decision" story with you.  About a year ago, I was evaluating our personal finances.  From your posts, I saw how much you liked the American Express Blue Cash Card.  It made me question whether we should continue with our Visa United card (which earned us frequent flyer points). 

My husband and I talked it over and we decided that it was time to make a switch.  We believed that a) airlines would eventually cancel the frequent flyer programs as they are looking for ways to save costs, b) with two small children, we only fly about once every two years and that's to Europe to see our families and c) we'd prefer to have the cash and the flexibility to decide what to spend it on.

We took your recommendation and set up the combo system of American Express Blue Cash Card and Chase Freedom Cash Visa which has worked really well.  My husband is a general contractor and we discovered that there is also a Chase Contractor Cash Rewards Card so we signed up for that too to really maximize both our personal and business spending.  (I've got a business version of Chase Freedom Cash Visa as well for my consultancy business.)

But the best bit is not the cash rewards (much as we like them)!  Last week, I received an email from United letting me know that the number of frequent flyer points required to book a Standard Award seat from the US to Europe was going up from 50,000 currently to 110,000 in 2009!  http://www.united.com/page/article/0,,59,00.html (Note:  they've already increased it from 50,000 to 100,000 for the rest of 2008.)  So, while they have not canceled the program, they are making it harder to use the flights internationally (the number of points for US flights stays the same).

Luckily, we had booked our 2009 trip to Europe in August 2008 and had already used up the majority of our points earned before we switched the cards.  In the meantime, we are grateful that we are not having to spend twice as much money (in reality, wait twice as long) to save up the required points to have enough for our next trip to Europe in 2011.

Yes, I LOVE stories like this! That's what this site is about -- giving ideas that people can use to improve their finances. I'm glad she sent me this testimony -- it made my day!

The Three "As Much as You Cans"

Here's an interesting comment left on my post titled The Importance of Being Earnest (In Saving):

Thanks for the reminder. The Millionaire Next Door is a great book, and I love the idea of being frugal as a starting point. My favorite is the philosophy of John Wesley, the English preacher from the 1700s. He believed you should 1. Make as much as you can, 2. Save as much as you can (frugal), and 3. give away as much as you can.

Sounds like a good philosophy to me. How about to you?

Good Ways to Deal with a Gift Card You Don't Like?

Two readers left similar comments on my post titled Review: Macy's (And the Problem with Gift Cards). They both offered comparable solutions on how to deal with a gift card you don't want/like. Here's the first comment:

Here's an experience I had with a gift card. Very little in that store appealed to me, but the card had an expiration date, and I didn't want its value to disappear.

I finally selected some curtains. After the sales tax, they ended up costing a bit more than the card's value. So I paid with both the gift card and a little extra cash.

But after taking them home, they didn't match very well with the rest of the room, so I took them back.

They gave me a refund all in cash! This meant there was no more expiration date to worry about, and I could go spend it elsewhere. So perhaps that's another alternative.

And the second has a bit of a twist:

Here is what I do if I have a GC from Macy's, and this only works if you have a Macy's CC also. Purchase an item with your GC, then return it and but the credit on your CC. Then call to get a credit balance refund, and ta da...cash.

I don't have a Macy's credit card, so I can't use that method, but the "buy something and return it for cash" method seems like it would work for almost any gift card you might have. But my question is this -- aren't stores on to this sort of activity? When you return the item, won't the see that the purchase was on a gift card and give you your refund back on a gift card (or in store credit)?

Comment from Extreme Makeover Home Edition Worker

Here's a comment left yesterday on my post titled Two More Extreme Makeover Home Edition Homes in Trouble I thought it was very insightful and worth sharing with you all:

I worked as a seamstress on an episode of EMHE a few years ago. The excesses were awful; one of the teenagers got SIX flatscreen television sets in his bedroom. Why?? My task was making bedding for a round bed in a basketball-themed bedroom. Again, how practical is that?!? Have you priced sheets for round beds lately? They provided ONE set of sheets with the bed, and they were black. I felt really bad for them. The stuff we were asked to make was done very quickly, with completely inappropriate materials. It was going to fall apart as soon as the crews left. None of it was going to survive being laundered. But hey, that wasn't the point, was it? I haven't been able to stomach watching the show since then. Another home was done near me and I refused to participate this time.

I hope this isn't a widespread issue with the show, but I'm afraid it might be.

Sometimes Realtors Make Things Worse

Here's an interesting comment I received on my post titled Is Selling Your Own Home Worth It?:

I've purchased two houses. Both were cases where I did not shop around for a house, but a house I liked went up for sale. One was sold by owner, and the other owner already had a sellers agent. The sellers agent insisted that I have a realtor, so I went through ZipRealty and used an agent that would refund some of that 3%.

I had always figured that using an agent would make things easier, since the first time I bought without one. You know what? The annoyances were really the same and having two realtors as middlemen didn't help all that much. In fact, it made things slower, and some of the stress higher. I wish the seller had at least tried putting up a for sale by owner sign. I would have bit. (and the realtor initially didn't want me putting in an offer since there was already a contract and a backup offer. Funny, in the end it was me who bought it. The same realtor who poo-pooed me got money despite that. What the heck kind of system is this to reward such behavior????)

I don't think we really need to be paying agents 6% to sell our house. That can be a ridiculously high amount of money. Hire your own people to market, fix up, and photograph your house, and you'll probably do a better job than a lot of sellers agents. Even if you don't want to bother with all that, just dropping the price by up to 6% could get you a lot of people interested pretty quickly.

That middle paragraph is the one that really hit home with me. We have one property that we've bid on and the seller's agent has been a real pain in the you know what. It's almost as if he doesn't want us (or anyone?) to buy the place. Sure, I understand that he's trying to get the best price for his client, but isn't a "good" price now better than a "better" price a year from now (which is reasonable to expect given the market conditions)? Apparently not. And not only that, his attitude has been very antagonistic from the get-go.

I guess what I'm trying to say is that if you're going to use a real estate agent to buy or sell a home, be sure you pick a good one. But that begs the question -- how do you find a good one? Sales results? Interviews? Referrals?

Perspective on an MBA

Here's a recent comment on my post titled The Value of an MBA that I thought you all would want to see. It provides some interesting insights/opinions -- especially for those of you considering an MBA:

I think there is a lot of misinformation conveyed above. There are really 2 distinct issues at hand when evaluating getting an MBA. First, improved/incremented knowledge and performance in your job. Second, increased job and career opportunities. In the first instance, getting an MBA if you are NOT educated about business AND work in a business/administrative capacity should clearly provide a benefit AND over time performance improvement and progress simply because you can do your job better. That will probably not propel your career at a vastly accelerated rate BUT should be helpful unless your company has no appreciation for improved work quality. You will still be impacted by all the other work processes/idiosyncrasies like politics, openings, growth or lack thereof creating opportunities etc. You also have to look at the culture of the company and see if having advanced business skills and knowledge are appreciated, acknowledged, utilized and rewarded. In some companies they are not due to size, family ownership etc. There is generally some opportunity cost to getting an MBA, whether time, money etc. You need to look and see objectively if you can get ahead with whatever degree you have or whether there is an "opportunity" premium associated with the degree.

In the second case, getting increased opportunities to really impact your career is probably reflective of going to a Top 10-20 school. However, you have to look at who recruits at the school, where their graduates focus and who they work for. National schools still have their niches. The cost is high for attending if you have to pay BUT generally you will leverage your pay significantly AND also the range of opportunities available to you. If, however, you are past 40 AND not say an ex military officer the benefit might be minimal. In many cases, at that point your career is established and the MBA is like frosting vs. flour. One finishes you off vs. being a core piece of development. The ideal MBA candidate is in the mid 20s-30 with at least 3-5 years of large business or organization experience. There is more appreciation for small company experiences than when I went to get my MBA at the University of Michigan in 1980. Then it was all large corporation focused...GM, GE, IBM, P & G etc. Now with the growth of venture capital, entrepreneurship, high growth companies etc the view is different. Getting a top 5 MBA like I did, opened doors which would not have otherwise been open especially with a BA in history and economics. It enabled me to move out of field sales into consulting, financial and strategic planning then marketing and general management. It gave me the background to do all those things successfully and the confidence to believe in myself due to increased skills and knowledge. It gave me a very good network of graduates to tap into. That especially is of very high value over the long run. Ultimately, 10 years out you have to be able to deliver but the MBA can open doors, enable you to perform and give you momentum with a good earnings stream. It also gives you the ability to be adaptive, deal with change, understand it in a broader context and should make you better able to be strategic and more objective and hopefully more flexible. Those are all key attributes in the business world. In terms of ROI, the payout is not just immediate but also in terms of momentum, that received and that which you can develop yourself due to the skills from the degree.

Realistically, you can also develop many of these skills by attending a good BBA program like Michigan, Wharton etc. Getting a law degree with lots of business courses also prepares you very well for business, especially in terms of critical thinking. The MBA will give you more soft business courses but a JD with accounting, finance, and some management courses will do good things too if the rest of the focus is business law. In today’s environment, the legal requirements and government involvement are omnipresent.

BTW, if you have a top BA many investment banks, consulting firms, and some other firms, all large, Fortune 500 types will provide you outstanding training that is as good as an MBA, mostly because the teachers are all MBA school profs doing "Exec" education. But that will not provide you the network of contacts, the degree, prestige etc but will give you good knowledge.

Good Luck.

Any additional thoughts on this?

The Keys to Getting Rich

Here's a comments I love -- left on my post titled Inside The Millionaire Mind of Mush—How We Became Millionaires:

High income is not the key, though it certainly helps. Saving a significant portion of your income, investing it wisely, spending less than you earn and having a plan are the keys.

My father-in-law is a lawyer in private practice, and is about 30 years older than I am. He is a good and kind man to his family, and very kind to me. I am certain that if properly focused, his income could be 1.5 to 2 times mine, very easily. Yet at age 33, I easily have 5-8 times the amount of savings he has available for retirement, and my retirement savings are in the five-figure range, not six. Why?

• He has never met a splurge he could pass up to put away dollars for tomorrow.

• He does not invest.

• He does not try to learn new ways to spend and save to be more efficient with his money. If it requires a new habit, or behavior change, he's not interested. I could run his office for half the money he spends running it, but he would have to learn new ways of doing things, which he simply doesn't want to do.

His house currently has a broken window on the first floor- it's nothing but a screen, no glass. His monthly oil heating bills this winter were much higher than usual. Does he think to fix the glass and reduce the amount of heat escaping his house? No, but he does take spur-of-the-moment trips to cities on the East Coast.

At certain levels of poverty and lower-income earning, it is extremely hard, if not impossible to get out of the "poverty trap" even with courageous frugality and positive financial behaviors. But for others, like my father-in-law, the long march from paycheck-to-paycheck to comfortable financial security can be significantly influenced by personal behaviors.

Hard for me to argue with this!

Good Suggestions for Selling Your House in a Tough Market

Lots of good comments to my post titled Is It Worth It to Pay Your Real Estate Agent a HIGHER Commission? The post itself wondered if it was worth it to pay real estate brokers more than the going rate in order to sell your house faster. Here are a few of the comments that I thought were worth highlighting, starting with this one:

Your readers might be interested in reading all the pieces by the Freakonomics guys. I first read about this in the book, Freakonomics, but they go on and on in their blog about the value (or lack thereof) a real estate agent brings to a transaction...worth the read.

I've read the book and basically they say hiring a real estate agent doesn't help you get a better price on your home. But what if you paid a higher commission than everyone else? Would that help you break through the clutter and get your house sold faster and at a higher price? Here's what another commenter said:

As a RE investor and defense contractor that moves around frequently, I've sold many houses, and learned this lesson the hard way. IT WORKS.

The biggest bang for the buck is on the Buyers Agent side. Ask your listing agent what the going rate is in that area for buyers agents, then up your buyers agent commission by one half to a full point above the going rate. Above that is probably excessive, and brings diminishing returns. The typical buyers agent is usually on the lighter side experience-wise, and the extra commission could mean a lot to them. When they pull a list of homes for the buyers to see, your house will be near the top of the list if the commission is extra in most cases.

On the Listing Agent side, it's important to be at the going rate, but not really above it. The agent you select is probably going to use his/her existing marketing program. Do some research, find the listing(selling) agent who is the Superstar in your market. They make a lot of money, and usually are not going to work any harder for an extra half or one point commission. In a slow market you don't want to undercut them, but paying the extra isn't likely to change much here.

You can try the conditions as others have mentioned with dates and prices, but I've found Superstar agents are EXTREMELY BUSY, and do not want to be bothered or spend the time on it. Upping the Buyers Agent commission is simple, takes only a minute and they usually don't have a problem with it.

One similar note, I've had good luck with www.Iggyshouse.com. (I have no affiliation with them, just a customer). It let's you list your house and pay NO LISTING COMMISSION. It puts your house in MLS the same as an agent, the buyers agents will call you for showing instructions. You can set the buyers agent commission to what you want, I recommend putting it a little above the going rate for your area. See the site, it has all the details.

Finally, here's a useful tip -- one that says the key to getting your house sold is to find the right agent:

Great topic, esp in this real estate climate. I like the idea of doing SOMETHING different to sell your house in this market, and a bigger commission might be a nice motivator for real estate agents. Or would it? In the book Freakonomics, the authors make the point that agents would rather sell MORE houses at lower prices (and lower commissions). The volume of sales is what truly drives their incomes. This makes sense. Would an agent rather sell three $200,000 houses at 6% or two at 8% ($36K vs. $32K)? Hmmm.

So what to do? Well I just finished a year long process of selling my father in law's house. And I have some learnings. We started off trying to sell it without an agent. That turned out to be penny-wise and pound foolish because, yes, we would have saved on real estate commission, but ultimately we were unsuccessful in selling it, and we wasted a couple months. Next we hired a family friend to be our agent. And this was just dumb. We wasted 8 months with him. Turns out he's a great guy, but not much of a real estate salesman. We couldn't sell the house, and we may have ruined the friendship. Plus he had us lower the price a couple times--he kept saying, "We'll just bring it down, _,000 and that's really where it needs to be to sell." Stupidly, we listened to him, even though my spider sense was telling me that we were priced correctly and that wasn't the problem.

So finally, I decided we needed a fresh start, and that meant a new agent. This time I wasn't messing around, so I did a little research and sought out the best agent in town--and by best I mean the one who sells more real estate than anyone else. Nothing speaks like results, I figured. So I found a list of the top selling agents in town, interviewed three of them, and chose one. We made the switch, had an offer within three weeks and were closed three weeks later.

So what did this agent do differently? She doesn't charge any more. But she does understand that getting this done quickly is in EVERYONE's best interest, oh and she actually markets and doesn't just hope--what a concept.

So my $0.02 is to skip directly to this step. In my market, the Business Journal has a list of top selling agents, so finding them wasn't hard. Unlike in many parts of the market, it won't cost you anymore, and the results will likely be much better.

So maybe finding the best agent is the key to success.

What do you think?

Thoughts on the Bible, Tithing, Giving, and Faith

For those of you new to Free Money Finance, I post on The Bible and Money every Sunday. Here's why.

Today we have a "guest post" from smr, a person who left several recent comments to my post titled Tithe or Pay Off Debt -- Which One Should You Do First? I'm posting all of the comments together as I thought they made quite a unique and interesting post.

Why is everyone using the excuse that since tithing came from the Old Testament, it does not apply to us anymore?

Remember what Jesus Himself said in the New Testament in Matthew 5:

17"DO NOT THINK I HAVE COME TO ABOLISH THE LAW or the Prophets; I have not come to abolish them but to FULFILL them. 18 I tell you the truth, until heaven and earth disappear, not the smallest letter, not the least stroke of a pen, will by any means disappear from the Law until everything is accomplished."

Jesus also said...

"19 ANYONE who BREAK ONE of the LEAST of these commandments and TEACHES OTHERS to do the same will be called least in the kingdom of heaven, but whoever practices and teaches these commands will be called great in the kingdom of heaven."

Jesus said He came to FULFILL the LAW, because He knows that it is impossible for humans to PERFECTLY observe the laws such as failing to give back to God or by tithing by Him dying on the cross for you and me, so that even though we fail over and over again and regardless of the weight of our sins - be it murder or failing to tithe, He is faithful and just to forgive us if we confess our sins and repent.

Now, if you CAREFULLY read the teachings of Jesus in the four Gospels, you'll notice that Jesus in fact spent more time in discussing about the importance of FAITH and EARTHLY TREASURES than He did on sexual immorality, homosexuality, murder, etc, which the Pharisees thought were "weightier" sins. why? because God knows that money is the hardest thing to let go! He even said, you can't serve two gods: the other "god" is usually our money and/or physical resources and indulgences.

In the law of giving, tithing or 10 percent may be "outdated" because in fact, the New Testament commands us to give even MORE THAN 10 PERCENT of everything we have.

Jesus said in Luke 12:48:

48 When someone has been given much, much will be required in return; and when someone has been entrusted with much, even more will be required.

And Paul said:

“Each one should give what he has decided in his heart to give, not reluctantly or under compulsion, for God loves a cheerful giver” (2 Corinthians 9:7)

It's all about FAITH and honoring and glorifying God with everything you have: with your family, with your hobbies, with your relationships, with your jobs, with your time, with your money, etc.

Now for those people who feel like they have been "victimized" by their churches' get-rich-quick scams, remember that nonetheless, the Word of God remains unchanged and because I know about His Word, especially about giving to church, I am even more accountable to obey. I don't give my tithes and offerings because I want to please my church organization. I give because God said so; I give out of love and obedience to my God who died the most imhumane, humiliating death on the cross just so I can spend eternity with Him.

Yes, I agree that some pastors abused the teaching of generosity for self-interests but let them be held accountable for their own sins, but as for me and my family, we will continue to obey God's Word... because the Bible also says that there will be a judgment day when we will be asked to give account of our each and every deed, and when God asks you, why didn't you give, we cannot given Him an excuse that our pastors abused or duped us because He'll say to you in return, "but you heard and know MY Word."

Therefore, once I drop that offering in that basket, i really could care less where that money goes or whether it is used responsibly coz that is not the point of God when He asks us to give; instead, I trust God that He knows the motive of my heart: to please and obey Him.

Also, remember that God's blessings are normally hindered due to many factors, not just whether you tithe or not. this is exactly what Jesus pointed out among the Pharisees who were careful to observe the law of tithing yet fail to observe God's two greatest commandments: (1) love your God above all (2) love your neighbors as you love yourself.

So if you're tithing faithfully and still don’t seem to be "blessed," carefully evaluate the other areas of your life. Remember that SIN is the biggest hindrance to God's presence and blessing (greatest example is when Adam & Eve disobeyed God, they were kicked out of the Garden of Eden)

Do you have a bondage of sin(s) in your life or in your household? have you forgiven others lovingly and gracefully as Jesus have done for you? if you can honestly say sin is not a factor, it could be very well because God is simply testing your faith as He did on Job.

Remember that "FAITH is being sure of what we hope for and certain of WHAT WE DO NOT SEE." (Hebrews 11:1) how can you have FAITH if you're so certain? yet, without faith, it is impossible to please God (Hebrews 11:6).

So when you give your tithe, don't give because your church/pastors said so or you want to get rich; give because you have faith in God and, therefore, will obey His Word.

By the way, just to clarify, our SALVATION or GETTING INTO HEAVEN is NOT DEPENDENT on our faithful TITHING or HOW MUCH YOU GIVE.

Nonetheless, as a Christ-follower, we are called to obey to His commands. plus, as an incentive, our rewards and crowns in heaven ARE dependent on your OBEDIENCE to GOD'S Word.

Consider College Debt Carefully

Here's a good comment left on my post titled Stuck about taking on (and dealing with) substantial college debt:

I just want to comment on the education debt that Sarah and Jesse brought up. For those who are already in that situation, well, yes, I suppose that's one case where both parents would have to work. No argument there.

But for those who are at an earlier stage of their lives, there's a lesson to take from this. To take on that much debt is to make the choice to work--possibly for decades--after school to pay it back no matter what else might come up in your life that would otherwise be more important to you. Now, that's not to say don't get an education, or even to say don't go into debt to get it if that's what you have to do. But do choose your major wisely and think twice about picking that fancy private school. This is particularly true for people whose inclinations lead them to fields that are not reliably well compensated, like the arts or politics to name just a couple.

Sometimes it seems to me that people have lost their minds when it comes to education costs, in much the same way as people who drop 20 grand and up on their weddings.

This is in agreement with what I've written in posts like How to Get the Most Financially Out of College and Go to Law School Without Racking Up Tons of Debt (this isn't just for readers thinking about law school.) In particular, here's what I said on the latter post:

"The point is that you need to look at a college degree (including a law school degree) as an investment. What will it cost and what will you get out of it? Look at the best way to maximize this investment, and you'll be able to find a school that meets your needs and won't leave you in a ton of debt relative to your income. Ignore these factors and select a school based on considerations like campus feel, nearness to home, the popularity of the football team, one great professor, and so on, and you may be setting yourself up for a bad financial decision."

To me, college debt can be "good debt" as long as it's kept under control. And the main way to keep it under control is to compare it to what you'll be earning once you graduate. For instance, consider the following:

• A teacher who will make $30,000 per year who leaves college with $30,000 in debt.
• An engineer who will make $70,000 per year who leaves college with $30,000 in debt.

Any question about who is in better shape to deal with their college debt?

More Great Ways to Save on Wedding Costs

Here's a comment full of tips on saving on wedding costs. It was left on my post titled How to Have Half a Million Dollars at Retirement by Controlling Wedding Costs:

My wife's parents paid for our wedding. I don't know the exact numbers, but I know the budget was $3,000 and they went slightly over. This was a wedding with 200 guests, and it was definitely a nice event -- the quality didn't suffer for the cost.

Ways we saved:

1) Her dad is a pastor. He performed the ceremony, and we used their church.

2) We got married just before noon on a Saturday. We served a tasty brunch (without alcohol) rather than an expensive dinner.

3) Her mom and several friends prepared and froze most of the food in the 2 months prior to the wedding. We didn't have a caterer at all.

4) We decorated with colorful origami paper cranes (1001, from 2 to 36 inch wingspan, folded by us) rather than flowers. Her mother grew some vines, so the only flowers we paid for were the bouquets and corsages.

5) A family friend/baker made the cake.

6) We found a photographer whose rates AND portfolio we liked a year before the wedding. (Our engagement was nearly 3 years long, due to college and the fact that she was 17 when I proposed. This gave us time for things like that.)

7) We used several other decorations the church, her family, or friends already had available.

8) A close friend managed a nearby hotel's banquet setup and such. He coordinated the church youth group, who set up all of the tables and such. (We did give a fairly generous donation to the youth group.)

We probably could have come up with a way to throw a more expensive party... but I'm not sure we could've thrown a better party.

Good tips. What I'm getting out of this is to "use your connections" to try and cut wedding costs. Many of the tips above were simply friends or family that pitched in one way or another and thus saved the couple a ton of money.

Another Interesting Idea for Teaching Kids About Money

Here's a very interesting/compelling idea someone suggested on my post titled Interesting Ideas for Teaching Kids About Money:

I say give them (kids) an allowance of $500 bucks a month. At the end of the month give them an itemized statement (like a paycheck) deducting $480 for boarding, food and clothes and let [them] spend the $20 as they like. That should get them in the real world mindset.

Ha! I couldn't help but think this might actually work. What do you think?

Has a Charity Ever Turned You Off?

Here's an interesting comment I received on my post titled Let the Rich Man Go:

I'm not sure that this is the kind of comment you wanted from Let the Rich Man Go, but here is my 17% worth.

I sent an e-mail last night asking to be removed from a well known charitable organization's mailing list while offering a suggestion to them.

We started a new tradition at Christmas time a couple of years ago with our daughters. We give them a certain amount of money to give to whomever they choose, instead of buying each other lots of stuff. We still give gifts, just cheaper ones. And fewer. One of the girls chose _____ this past year. I made an online donation. We didn't get the 'free' gift that went with the donation, because that would actually mean a lower net donation would go to the organization. I liked it that we could opt out of the free gift as I made the donation.

Since then, we have received at least two mailings requesting another donation. Here is my problem with that practice. We were not on their mailing list before the donation, and as far as I am concerned, it was probably a one time thing. When I give $__, I want that amount to go to the cause. Their latest mailing informs that in 2006, "83% of all gifts and donations to _____ goes directly to our vital programs". The pie chart shows that 83% was Program Related Expenses, while the smaller piece of the pie went to Administrative and Fundraising Expenses. That may just be a fabulous percentage; I don't know because I haven't compared them with others.

The fact remains that if 17% of my donation is for Administrative and Fundraising Expenses, that is either salaries, free gifts, mailings, advertising or other operating expenses that I haven't considered. How much of 17% is for mailings? Probably not much, but I don't want to receive the mailings. Valuable resources are being wasted. __% of 17% of my donation is being thrown in the trash.

Here was my suggestion. Let people opt out of mailings when they make a donation, just like they can opt out of the 'free' gift. I'm calling it The 17% Solution.

A few thoughts on this from me:

1. Generally, 83% of the money going directly to programming is pretty good (my rule-of-thumb is that if it's 80% or higher, the charity is pretty efficient.) However, that needs to be compared with like charities. If similar charities are at 90%, then 83% isn't good. Likewise, if other charities are at 70%, then 83% is great!

2. I know what she means about getting on mailing lists. I've made one-time donations to many charities and now receive a TON of solicitations on a regular basis. One of them send me something monthly after I only made one $25 donation about four years ago. What a waste!

3. I serve on the board of a charity, so I know that competition for donors is tough. And the fact is, the more mail that goes out, the more donations come in.

4. That said, I like the idea she offers about letting people opt out of mailings. If there's no chance that the person will ever give again to the charity, don't you think the charity would want to know that?

What's your experience in this area? Have you ever been put off by being placed on a mailing/call list after what you thought was a one-time contact/donation?

Examples of How Poor People Can Get Ahead Financially

Several of the comments on my post titled Before You List Your Excuses, Read This were, well, excuses. I was surprised at the number of people who simply think it's impossible to improve your financial lot significantly. Now many of these comments were probably left by those who watch the "average" amount of TV per day -- something like six hours or so -- but I'm sure there's no correlation between wasting so much time and getting ahead financially. ;-)

But a couple of commenters caught the essence of what I was trying to get at and left some great, real-life stories to serve as examples. Here's the first one:

Both of my inlaws came from such poverty that my father-in-law only owned one pair of blue jeans. They put themselves through college while working, ate bread and canned tomatoes, and used whatever public assistance was available. They abstained from alcohol, tobacco and illegal drugs. They never wasted a moment. They never paid for something they could do themselves. Most of all they worked hard every day. Today they live in a 1/2 million dollar home. I guess they were just lucky in the lottery of life.

Ha! Exactly. Most of the nay-sayers talk about how it can't be done. The people in the comment above prove that it CAN be done. The difference? Attitude, determination, and hard work. Of course many people want to be financially successful without any hard work and determination and while having a bad, "I can't make it" attitude. Sorry, financial independence isn't handed to anyone on a silver platter.

Here's the next comment:

The American dream is still alive for those who want to work for it. My grandfather came straight out of Appalachia. We're talking tin roofs, dirt floors, and (during my grandfather's time) no formal schooling to speak of. There were no jobs (still aren't any), so he went to work in a factory in a different state. His family lived a lower middle class lifestyle, but they were able to afford to send my dad to college for an associate's degree. My dad and mom lived a middle class lifestyle, and all three of their children obtained undergraduate and graduate degrees. When my father and I talk about poverty, I usually take the more liberal view that people need some help in order to leave poverty. Dad can't stand that because he remembers grandpa's stories of going down to the welfare office to "beg" and "look poor" for a government handout. My grandfather did not want to live that way, so he did the best he could as a seventeen year-old father. He certainly had the deck stacked against him, but he sacrificed and worked hard to overcome his circumstances and provide more opportunities for his family.

Notice the theme? Hard work, determination, and a can-do attitude. Oh yeah, and time. You can't build wealth overnight. But if the principles described in these two comments are applied, ANYONE can improve their financial lot significantly. The choice of whether or not you want to do it is up to you.

Now let the nay-sayers have at it. I'm sure many will spend their comments here saying why they CAN'T get ahead. They're right. With that attitude, they can't.

Wisdom from Readers: Saving Money and Performance of Index Funds

One of the great parts of Free Money Finance is the comments. Readers leave hundreds of comments every month and many of them offer some exceptionally good advice/suggestions. But I know that many people don't have/take the time to read the comments, so I thought I'd share a couple good ones in one big post.

We'll start with a money saving tip left on my post titled Another Example of Asking for a Discount Saving Money:

I'm at the point in my life where I am constantly attending weddings, and many of them require travel. More often than not, when the couple has a "preferred guest rate" at a hotel, it's not always the lowest rate. Last week I called a Courtyard Marriott and found that the wedding rate was $175. I asked if they had a lower rate, such as AAA, and they did - for $116! So I booked the lower rate and told my friends to do the same. I very often ask for the AAA rate, even though we aren't AAA members. I have never, ever, been asked to show my AAA card upon check-in.

I do have a AAA membership and often get the discount. Come to think of it, I've never been asked to show my card either. Is this honest though?

Next is a great comment left on my post titled What Will Happen to the Stock Market in 2008. I am regularly surprised when people comment that investing in index funds simply gets you an average return. This commenter responded to such a thought from someone else -- and he responded just the way I would have:

Jake, good points except you got one little thing wrong: investing in an index fund will lock in above-average returns over the long run, not merely average returns. It's counter-intuitive at first that the average return can be above-average but when you take expenses and transaction costs into account, it's evident that index funds must mathematically have above-average returns.

Exactly. Right on the money!

FMF Reader Takes Advice, Saves over $400 Per Year on Comcast

I love to hear when people take a tip from Free Money Finance, apply it, and they improve their finances. Here's a recent example left as a comment on my post titled Save on Comcast Cable, DirecTV and a HDTV: Two More Examples of Saving Money by Asking for a Discount:

I took the advice of this entry and called up Comcast to have my rate reduced. I am paying $35 less a month now AND I get tons of extra channels.

Saving $420 per year PLUS getting more channels is a pretty good deal, don't you think?

A Good Reason to Pre-Pay Your Mortgage?

In Wondering About Pre-Paying a Mortgage Versus Investing I talked about my past disposition towards pre-paying a mortgage over investing but how my view might be changing. A thought-provoking comment was left on that post as follows:

Something to chalk up to pro-prepaying a mortgage that I don't see mentioned as often on PF blogs as it should is that if you have kids in college, the equity in your primary residence does not count toward your FAFSA basis for need-based scholarships and grants. Nonetheless, it does matter for many private schools. So, I could see primarily investing in a mortgage pre-payment if you had a kid going to school and you thought it might make the difference in their getting some grants and such.

A good point, but for us I doubt we'll qualify for any need-based scholarships or grants. That said, for people who do qualify for such options, pre-paying a mortgage might be a better option. Then again, if you're qualifying based on need, isn't it likely that you won't have much extra left over to make additional mortgage payments?

Don't Assume Quantity Purchases Are Always Best

In the past, I've noted that you should calculate the per use/per item cost on products because the bigger size isn't always the best value (despite what marketers have trained us to believe.) And when I posted Quantity Purchases Aren't Always a Better Deal last week, I received several good comments on the issue and wanted to share these with you all. Here's the first:

Perhaps the very reason the marketing companies have taught us that we always save by buying in bulk is this: They know a WHOLE LOT of people can't DO the math!!

I have gone shopping with a bargain loving friend who says things like. "OK, this item usually costs $12.00. Today, it's 10% off. So, how much would that make it?" I am not kidding. A smart girl in many ways, but since she wasn't taught math, she can be taken to the bank.

Yep. I've seen this happen as well. For those of you who can't do the math, carry a small calculator with you. Or better yet, use one that's ion your phone (that's what I do.)

Here's the next comment:

In some grocery stores, the shelf label will tell you (in superfine print) the cost PER UNIT. So I compare, say, cereal boxes, one large and one smaller of the same kind, and usually the price PER UNIT of the smaller box is LESS than the price per unit of the larger box. You would THINK that the price per unit of the larger box would be less, but that is not the case...but I bet more people buy the larger box because they think it's a better deal.

I've had people leave comments here saying that the small per unit information found on those tags isn't always correct. Anyone else experienced this?

Finally, here's one last comment:

The other thing to keep in mind is that buying in quantity only does you good for items that you will actually use. I used to buy bagels from a warehouse store because they were cheaper, but I had to buy 9 at a time. However, I only would get a chance to eat 5 or 6 of the bagels before they started getting moldy, so that really made the price more expensive for the ones that I was able to use. I can buy them individually at a grocery store for a few cents more, but since they don't go bad before I eat them, I actually save money.

True, very true. Costco is the master at getting people to buy huge amounts of various products, and we sometimes get close to falling into that trap. Then one of us will say something like "can we really use all of this?" or "do we really need so much of this?" and this is enough to know us back to our senses.

Save on Comcast Cable, DirecTV and a HDTV: Two More Examples of Saving Money by Asking for a Discount

Here are two new examples of saving money by asking for a discount. They were left as comments on my post titled Two Examples of Saving Money by Asking for a Discount. The first deals with saving on a Comcast cable package:

I was able to get Comcast to agree to lower my rates for my combined Internet/Cable package by $30/month for an entire year. I just called them up after the 1st of the year and asked. I wasn't getting anywhere until I mentioned the (apparently dreaded) word "satellite" and then I got promptly forwarded to someone in retention who made me the offer right away. Not only will I save $360 this year...it will give FIOS another year to roll out in my area so I can jump ship. :)

$360 savings a year for 10 minutes work isn't bad at all!

The next comment offers a similar idea:

My dad did this at Sears with a HDTV. He ended up getting a 60" for the price of the 50" he went in for because they were out of the 50" and they wanted the sale. I also recently kept asking for discounts when I upgraded to HD service with DirecTV. Originally their HD-DVR was listed at $300. Long story short, after a couple emails and calls, I got the price cut in half, plus got my HD service ($10 per month) free for a year, plus an additional $10 a month for a year off regular programming. So basically I "saved" $390 for about a hour of my time. A good deal in my opinion. The magic words I kept using were "can't you do better than that" and "Dish Network is still cheaper than that".

These stories prove once again that it never hurts to ask (for a discount.)

Saving on American Girl Doll Clothes

In my post titled What We Got for Christmas, I noted that my daughter got an American Girl (AG) doll for Christmas and we were now into the "what (expensive) clothes can I buy for her" phase. I had one reader leave the following comment in response:

I had an AG doll growing up - but my mom refused to let me spend money on the "official" clothes and accessories (she'd make an exception every once in a while, but even then, I had to spend my own money). Instead, we made a lot (my mom bought the official patterns for "my" doll and sewed up many of the clothes herself, my dad helped me make a period-style bed) or bought from craft shows (not just clothes, but a desk, a bench, a closet/chest, etc.). There's lots out there for 18" dolls that's just as good as AG for much less money. You can also get more variety that way. I'd steer your daughter in that direction, if I were you.

My daughter had another 18" doll (not AG) before she got her AG doll, and my wife made some very simple clothes for her. They looked "fine", but they're not as nice as the AG clothes. Hence my daughter wants the AG clothes or something that at least looks like them.

Another reader (thanks, Blaine) pointed me to an eBay store that sells AG replica clothes for about 25-30% below AG costs. But they don't have the "Just Like You" clothes my daughter wants. Arrrrgh!

Anyone know of a good source that sells a broad line of AG replica clothes at good prices?

Save Thousands of Dollars Doing Your Own Body Work

Little did I know how easy it is to save a boatload of money by doing the bodywork on your own car after an accident (assuming of course that you're at least a bit handy and the damage isn't too great.) But then I wrote Minor Minivan Fender-Benders Can Cost You a Fortune and some commenters enlightened me to the fact that a "$2,000 repair" could costs a fraction of that if you do it yourself. Here's the first comment:

A year or two ago someone backed into me in a parking lot, so we're talking under 5 mph here.

He broke my front left turn signal cover and left a minor dent in the bumper. I was very mad with him because i had been honking my horn all the time as he backed up so i decided to claim from his insurance. (luckily i also had a witness)

The insurance rep told me to bring the car in for repair and submit the bill for reimbursement. Over a month went by and i hadn't brought the car in for repairs cos the damage was so minor. I ended up buying a light cover online for $30 and a patch kit for the dent may $60 and did the repair myself.

I then called the insurance company and told the rep it was too much hassle to bring the car in for repairs cos then i would have to rent a car and the damage was so minor anyway i just wanted the $90 back that i had spent.

The rep said "No, no we want to make sure you are compensated appropriately for this, Ill sent out an assessor"

So a few days later the assessor arrives and does his thing. I was thinking ok this isn't so bad, maybe I'll get a check for a few hundred outta this! Then he handed me the report which had a total of $1400 on it.

He said you'll get a check in the mail in a few days.

He must have seen the shock on my face and knew exactly what i was thinking cos then he says "Go and have a nice weekend in Tahoe or something"

...So i did!! :-)

So a $1,400 repair really costs $90?

Here's another one:

Back when I had to park on the street, someone side-swiped my car in the middle of the night - breaking the side mirror housing, and causing minor dents/paint damage in the driver's door. I called my insurance about it, who sent me to a local body shop - I don't remember the quote exactly, but it was something between $1,500 and $2,500 to bang out the dent and completely match the paint, as well as replacing the mirror. I have a high deductible, and I figured that it was pointless to pay that much money to have my car look like new (not to mention that my premiums would go up), so I let it go.

I held the mirror on with duct tape for several months, until my husband pushed me to go to the local Ford dealer's parts division. A brand-new, complete mirror housing was less than $50. It took me 1/2 hour to get the remains of the old housing off and put the new one on - in the dark!

I think the key is understanding which repairs are necessary for the car to work right (mirror, body damage, etc) and which are merely cosmetic, but costly (dented door).

Ok, so she probably has some minor dents left, but still -- $1,500 to $2,000 or $50. Which would you rather pay?

A motorcycle was riding the lane during commute hours. All traffic was stopped except for him. He claimed that someone swiped his back wheel and he hit the car next to me and fell on my car, the heavy motorcycle pinning him to my car. Two guys had to help move the bike off him. I only have a ding on my car. I wasn't going to claim it, but I had to wait around for the highway patrol and then spend time talking to his insurance and they wanted to send out an adjuster. All said and done, it wasted 6 hours of my time. When they decided to send me the check for $700, I took my husband out to a nice dinner.

Is it just me or is something really out of whack here? Why is there such a big difference between what it really costs to repair some body damage and what is actually charged? Is it the insurance companies who are messed up? The auto body places simply charging too much? Or what? Where else is there such a high mark-up on such services?

A Couple More Ways to Make Extra Money

Here are two additional money making suggestions left as comments on my post titled 11 Great Ways to Earn More Money. The first suggests renting out a portion of your home:

I live alone in a large house. I'll rent out rooms to people from my company who are visiting from over seas for a few months. It's cheaper for the company than a hotel and the employee gets a more cultural experience living in a real American neighborhood.

BTW, you can also rent out a portion of the home to allow people to store their stuff. There's big business in those storage lockers you see all over the place!

Next, here's a tip I love:

I would suggest becoming a referee (youth or adult) in a sport you enjoy. There is always a need. The pay is usually a bit higher than minimum wage, and the time commitment is totally up to you.

A bit above minimum wage? The refs for my son's basketball team get paid $35 per game for less than an hour's work. They can ref three games a night at the same facility, so they can make some good income if they ref several nights each season.

BTW, being an official also helps you physically as you're running/walking for much of the time. (Especially at the end, when you have to run from upset parents!) ;-)

Finally, here's a testimony for the missing money site I noted in the post:

I was bored at work, so I went to the link for Missing Money and searched for me--nothing. You DID help my sister out a lot, though. She lived in New Orleans during the hurricane and as it turns out, never got her last check from her employer. She just got back an extra $900 owed to her thanks to your post. :-)

Wow! $900 for about two-minutes of work! Not bad at all!

How to Earn 3% Cash Back on Your Credit Cards

On my post titled Over $700: I'm Going to Earn More Credit Card Rewards This Year, I had one reader state the following:

In 2007, we spent a little over $40K total with cards and earned $1,233 for an average of about 3%.

I asked him about how he did this as 3% is a pretty good return. He responded:

It's a hybrid approach and yes, there is a grandfathered 5% g/g/d Chase card involved that's no longer available--and I'm sure it's only a matter of time before Chase converts this to a 3% (3.75% if you wait to redeem) card. But even when that happens, I don't think it won't affect my % all that much.

So, here's the entire run-down:

• Chase Visa Rewards: 5% on g/g/d

• Discover: 5% on changing categories (currently airlines, hotels, car rentals this quarter)

• Costco Amex: 3% on dining out (all types of restaurants)/2% travel. We also did all our online holiday shopping with this card, as they had a special offer in December giving back 3% on all online purchases. (Watch your junk mail carefully, I almost threw this offer out.)

• Costco Business Amex: Don't have this one yet, but I'll be replacing the above Costco card with this when Chase kills my 5% card, as this will add 5% gas to above Amex categories.

• Chase Professional MasterCard: 3% on dining out (all types of restaurants), gas, office supplies, hardware/home improvement.

• Orchard Bank/HSBC MasterCard: This is the card of last resort since it offers 2% on EVERYTHING ELSE, but limits the rebate to $400/year ($20K in charges). So we're careful about using up our rebate on this one when we can get 2% (or more) on another card.

• We also have a few store-specific cards with rewards programs that offer 5% back in store gift cards/certificates that are essentially same as cash, since we'd be shopping at those stores anyway.

Most of the cards I've listed give back 1% for categories not listed, but I only charge appropriately with each card to earn the maximum available. Since I got the Orchard/HSBC card, NOTHING earns less than a 2% rebate.

I could do a little better by adding a 3(.75)% Chase card to cover a few more categories like cell-phone bills, but at this point that's probably overkill. When Chase forces me into that card, I'll make that work.

Anybody who's not averaging 2% on up to $20K of charges ought to seriously re-examine their "strategy" since that can be easily attained using just one card.

A few thoughts from me on this:

1. Yes, you can certainly earn a good return if you have a high-rate, grandfathered card that's no longer available to new users. Unfortunately, the rest of us can't get in on this action.

2. Personally, there's a "hassle factor" that I don't want to deal with. Two cards is the maximum I'm willing to deal with. Having, managing, and using an extra 5-10 cards to get a bit more back, simply isn't worth the effort.

3. He's right on the 2% issue. Personally, I think I can get to 2.6% with two cards. I'd probably be higher if I had $40k in charges like he has.

4. I wonder what his return would be without the grandfathered cards. I'm guessing it's probably somewhere near the 2.6% I'm shooting for with two cards.

Sell Drugs, Make a Fortune

Here are some comments left on my post titled Top 10 Overpaid Jobs:

Add pharmacists to this list. Yeah, I know I'll probably get a lot of flack from this comment but I feel it's true. Twenty-five year old PharmD's, fresh out of school, are making up to $60/hour plus TRIPLE time for working major holidays (such as Christmas). I have a coworker who's son graduated as a pharmacist in June, 2007 and began working for CVS at $55/hour!!! Not to mention his son received a $30,000 sign-on incentive!!! It's ridiculous how much money they make (at least for retail pharmacists).

I'm a bit jealous, because my coworker's son was only in school for five calendar years to earn his PharmD (he's a bit of an overachiever) -- but still, my jealously aside it is a ridiculous amount of money for a profession that can easily be automated.

Oh, I forgot to mention that CVS retail pharmacists that work the overnight shift can earn 20% more!!

Maybe I'll go back to school to earn a PharmD and ride the gravy train.

Wow! I knew pharmacists earned a good living, but I didn't know it was this good. That's a GREAT starting salary! But I wonder if it kind of levels off as the years go on. Is there lots of upside in this position?

Another reader left this in response to the original comment:

The reason pharmacists make what they do is because there is a LACK OF SUPPLY. If tons of students were going into pharmacy the pay would obviously drop. I went to a school that had a big pharmacy program (Rutgers). What you typically saw was the people who went into pharmacy were people who wanted to go into medicine but not put in the work or want to deal with the competition of going to med school or dental school (which was typically the next choice for people who couldn't get into med school).

Also people think that pharmacists just dispense medicine but that is extremely naive and an uneducated assertion. I know a number of pharmacists (my family and friends circle is full of them) and they really have to know and understand every single drug and all its interactions with other medicines, etc. Pharmacists are correcting erroneous prescriptions written by doctors all the time. The fact that the person who is responsible for giving you the right medicine and making sure it is safe for you given your profile and other medicines you take is making a fairly typical middle to upper-middle class salary shouldn't upset anyone. $60/hour works out to $120,000 per year - big whoops. Not exactly raking in the dough.

Ok, I agree that you want someone who knows what they're doing dispensing medicine, and it's worth the high pay. I'd disagree that $120k is not that high. It's a good salary -- especially for someone right out of college.

Finally, the first commenter left this response:

Yeah, I knew I'd get dinged on the pharmacist comment I made. "I know a number of pharmacists . . . and they really have to know and understand every single drug and all its interactions with other medicines, etc. Pharmacists are correcting erroneous prescriptions written by doctors all the time . . . [and] giving you the right medicine and making sure it is safe for you given your profile." Pharmacists provide a valuable service, please don't get me wrong. I just think the compensation far, far outweighs the job. But, as the above commenter suggested, it is all about supply and demand. Demand for retail pharmacists is very high and supply is very low.

So, what's your take on the issue? Anything to add?

Make Money by Selling Your Old Coins

I've previously suggested that you can make money by selling stuff you own. A reader of my post titled $10k Challenge: Make Money at Auctions just did this. Here's what she had to say:

I actually made over $400 in a month by selling stuff on ebay from around my house that I simply wasn't using anymore. But I did research first to see if similar items were getting bids and how much they were selling for so I wouldn't be out any seller fees. It pays to do your homework.

Think of all the stuff you have in your house that you're not using. Why not sell it, clear out some space, and earn yourself some extra cash to boot?

One idea I particularly like is looking at your old coins and seeing if they are worth anything above face value. Flexo details how to determine the value of a coin and this is something I'm definitely going to be looking into this year. I have several old coins that I collected as a kid/teenager as well as some coins we received from my wife's father when he died. I think a few of them have some potential. Who knows, maybe there's a half-year of college for one of my kids waiting for me in a box downstairs. ;-)

Simple Trick to Help You Save Money

Here's a useful tip left as a comment on my post titled Idea for Saving: Put Your Change in "Savings" Every Night:

If you keep close tabs on your expenditures in a tool like Quicken, there is a way that you can simulate a loose-change piggybank. First, create a rolling transaction in your checking account dated a month in the future and with a category of "Loose change". Every time you enter a transaction, determine how much change would be required to take you to the next dollar. For example, if your grocery bill is $92.73, your "change" is $0.27. Add $0.27 to your rolling "Change" transaction to set it aside for investment and make sure it won't be spent. Then, once a month, take all the money you've set aside as "Change" and move it to your savings account or some other investment vehicle. I haven't tried this yet but it's pretty tempting and I might do it at some point.

I'm not big on "tricks" like this to make me save (I don't have any trouble saving on my own), but I do understand that many people need/could use something like this to help them accumulate a good amount of money during the course of a year.

How Much Would You Need to Quit Your Job?

Well, the verdict is in and it looks as if most readers would quit their jobs if they won the lottery.  I'm not really surprised by that -- having lots of money opens up completely new doors that allow some pretty cool decisions to be made/considered.

One reader put a spin on my original question and came up with an intriguing question of his own:

Perhaps the better question is what amount (after tax) is your tipping point. I'm 42 and have four girls ages 2-10. Without getting into to the detail, $2.5MM (rounded to the nearest half million).

Good question, huh? I'd follow it up with, "And how close are you to reaching that goal?"

For me, I think I'd need $2.5-$3 million. I'm not going to go into great detail in this section on how close I am to reaching that goal since I'll be covering that issue in my year-end net worth wrap-up. But I will say that I think it's possible for me to significantly downsize (if not quit work completely) in the next 7-10 years (somewhere between age 50 and 53.)

How about you? How much would you need to have to be able to quit your job? And how close are you to reaching that goal?

Government Welfare Versus Personal Charity

Here's a thought-provoking comment left on my post titled Welfare "Joke":

I think we should take care of the poor as well, but it should be through charitable organizations, not the government. The government is a wasteful organization. Twenty dollars to the government would probably provide $10 in welfare benefits. The same $20 to a charitable organization would provide $15 to the needy.

Wow! How did he pack so many thoughts into four sentences?

So here are a few questions for you all to consider/comment on:

1. What's your take on government welfare versus personal charity? Should it be the role of government to help the poor and needy or should individuals do it?

2. If you think individuals should care for the poor, do you think such a system is practical in today's society?

3. Should people be forced to help the poor at all?

4. Is the government really wasteful? Would charities be more efficient? Would businesses?

Chime in with your thoughts. I think this can lead to some interesting and worthwhile discussion.

Would You Keep Your Job if You Won the Lottery?

Here's a comment left on my post titled Do What You Love and Starve:

I really enjoy my job. I think I'd still like to do it even if I won the lottery. It's just an ordinary sort of a job though, nothing earth-shattering. I probably don't love it as much as I do, sleep, say but of all the things that I actually do, it's one of the best.

This got me to thinking about a question I wanted to ask you all: would you keep your job if you won the lottery? (and just in case some of you say "well, that depends on how much I won," let's make it a very large amount -- say, $50 million.) So, would you keep your job if you won $50 million?

I like my job a lot and love the people I work with, but if I won $50 million, I'd be outta here in a second. How about you?

If You Work the System, You Can Save a Good Amount of Money

Here's a great illustration of how with a little planning, ingenuity, and work you can save a good amount of money. It was left as a comment on my post titled How Many Gift Cards Will You Use This Holiday Season?:

We occasionally give gift cards, and often receive them as gifts (quite happily), but mostly we buy them for ourselves.

One of the largest grocery store chains here in NE Ohio is Giant Eagle. They sell gift cards for all sorts of restaurants, appliance stores, bookstores, etc. They also have a "fuel perks" program where, if you use their customer loyalty card, for every $50 you spend in the store they give you $0.20 off per gallon of gas at their gas stations in the parking lot.

The perks accumulate, so buy $200 worth of groceries and you get $0.80 cents off per gallon...UP TO 30 GALLONS! The best part? Buying gift cards count as normal store purchases.

So here's what my wife and I did. We needed to put new windows in the house. So we:

1. Went to Giant Eagle and bought $2,000, yes, 2-thousand dollars, worth of gift cards to Home Depot.

2. We used our Citi Bank Cash Rewards Credit Card to buy the gift cards (discount = 5% off of grocery store purchases). That saved us $100 right off the bat.

3. $2000 spent at Giant Eagle gave us a total of $8.00 off per gallon of gas. Amounts can be rolled over so any amount you have over the price of a gallon of gas is retained for up to 60 days.

4. I then took one of the gift cards to home depot and bought three 5-gallon gas cans.

5. I took the remaining gift cards and bought my new windows, which I installed myself, and which btw have now drastically reduced my heating bills.

6. Then for the next month whenever I needed gas I would take the gas cans to the Giant Eagle gas station and fill my car (15-gallons) and fill the cans with another 15 gallons - FOR FREE. I would take my gas cans home and fill my wife's van in the garage, btw.

With gas at $3 a gallon, that means I filled up my 30-gallons twice for FREE and then paid just $1 per gallon for the next 30-gallons. A total gas savings of $240.

All in all, this method of using my rebate credit card, plus gift cards and fuel-perks, saved me $340 on the cost of putting in windows. That equates to a 17% discount.

Thank you Giant Eagle! Thank you Home Depot! Thank you gift cards!

Wow! What a story! It just shows that if you put your mind to it, you can save a good amount of money by "working the system."

For other money making ideas, check out these posts:

• How You Can Earn Over 2.6% Cash Back by Using a Combination of the American Express Blue Cash and Chase Freedom Cash Visa Credit Cards

• I Told You There Was Big Money in Being a College Advisor!

• Use the Skills from Your Job to Make an Extra Income

Make Extra Income by Teaching What You Know

Here's another great money making idea left as a comment on my post titled Use the Skills from Your Job to Make an Extra Income:

I've found that teaching can also be a good way to make some extra money. After finishing up my MBA last December, I started applying to local colleges about teaching night classes.

I started teaching some Economics courses at an ITT Tech campus. This was good experience, but the pay wasn't great. I figured it was a good stepping stone.

It turned out I was right. After about 3 classes, I got a call and offer from a 4-year school closer to home looking for a Quantitative Analysis instructor for their evening MBA program. This kind of class was right up my alley. Not only was it closer to home, but the pay was 2.5x as much!

So now, depending on the class schedule, I'm pulling in an extra $700 - $1000 per month for teaching 1 night per week. And trust me, teaching the same class the second time is much easier. Once you've prepared for the class a couple of times, it's gets to be pretty easy to prepare.

Holy cow, what a GREAT idea! And an extra $700 to $1,000 per month is pretty good.

Before you give me the "yeah, but I couldn't teach Quantitative Analysis" speech, let me say that you don't have to. If you simply know how to do something and can speak in front of people, you can teach courses on things like personal finances, growing roses, playing a sport, and so on. There are all sorts of colleges, community colleges, tech schools, etc. that all need teachers. Maybe one of them is you!

Help a Reader Decrease Real Estate Taxes

Here's a reader question left as a comment on my post titled The Inside Scoop on Getting Your Property Taxes Reduced:

My wife and I purchased a house with a restrictive covenant. Specifically, one of its owners must be employed by the local university (Duke, in Durham, NC) or one of its associated hospitals. Because this leads to a smaller pool of potential buyers, we got the house at a good price for the neighborhood ($325K). However, it has just been appraised by Durham County at $411K. This is a fair price for a similar house in our neighborhood, but we would, of course, not be able to sell it at this price due to the restricted pool of buyers. My question: Is this grounds for an appeal?

I think it would be since the restrictions on the house impact it's value. But I'm not an expert on the subject. Anyone out there with a more informed opinion?

More Reasons to Turn Down a Job Offer

Here's what I consider to be a good comment left on my post titled Five Reasons to Turn Down a Job Offer:

Having just accepted a job offer, and turned down other ones, I can think of a few reasons to turn down a job offer:

1. You have a better one lined up. :)
2. The job isn't one that actually progresses your career.
3. You are taking the job to run away from your current job.
4. You can't fully articulate what you will be doing for the new company or what the company does.
5. You get a strange vibe from your soon to be new boss.
6. You won't be able to explain fully to the next-next job why you took this one and how it helped you grow.

Some good stuff here IMO. My thoughts on each of these:

1. I had this happened a couple of times. It's always fun to tell someone "no", especially when they put you through the ringer, wanted to pay you nothing, and expected you to worship them for it. Of course, you decline nicely, but it's still fun. ;-)

I had one company in particular where the guy was offering me just a bit more than what I already made. I asked him if he could do better and he said something like "he could, but he didn't want to." Hmmm. Then I informed him I had to decline and was going to work elsewhere. he was speechless. He eventually recovered and wished me well, bit I could tell he wasn't very happy. He later had the executive recruiter he used call me up and tell me how I was ruining my career. Yeah, right. In the end, the other new company turned out to be one of the best career moves I've ever made, and the boss I would have had at the place I declined was fired in two years and the company was on the verge of bankruptcy.

2. Good point, though some people would take a job because of better hours, more enjoyment, etc., even though it might not advance their career. Me? I advise looking for everything -- something you enjoy AND that advances your career.

3. You don't want to jump from the frying pan into the fire -- or even from the fire into the frying pan. You want to be going to the new job because it's a great opportunity, not because you hate your current job so much.

4. This is certainly a red flag. Why would someone even take a job where they didn't know what they'd be doing?

5. Yikes! I had a job offer once from a company where the boss really weirded me out (he was the same one that had me do the algebra problem in the interview -- if you recall that story.) In addition, their offices were in a 1960's-like building that looked like it had technology from the 50's. No chance I was taking that spot (even though I HATED my current job.)

6. This is close to #2, so I'll refer you to my comments there.

Save and Make Money All in One Step

My post titled The 10 Most-Hated Money Saving Tips certainly got a lot of great comments. But there's one that stood out to me that I feel needed to be shared with everyone. It addresses my most-hated money saving idea -- moving to a lower cost-of-living city. The comment:

I can understand #1 being the most-hated. We met with a lot of skepticism when we did just that.

But, we researched and found a town (in the same country) that met our criteria and had a very low cost of living but most importantly, had ridiculously cheap real estate. For us, it was the low cost of entry into the real estate market that sold us on our location. I mean, less than the price of a decked out minivan low.

We purchased one house three years before we were ready to actually move out there and rented it out. A couple of years later, a second one. After we moved out here (5 months ago) we've bought 3 more and are currently closing on #6 and #7. The rental income from these places alone is enough to live modestly, so very soon, we'll have no need for a job. So much for the "not being able to find work in a small town" objection, eh?

Finding a place with inexpensive houses allows us to easily diversify, and our 7 houses combined still costs less (maybe even 1/2) of a home in Toronto. The risk to our portfolio is considerably lower than putting all our eggs in one house. We describe our thinking and our process in our blog WeLiveHereNow.net

Strategy #1 has worked very well for us, and everyone we talk to says they think it's great, but they could never do it. I guess that's just more houses for us, then! :)

So they not only saved a bundle of money, but now they're making money to boot -- enough so they don't have to have "regular" jobs in the near future. I'd say that's a pretty good combination!

Yes, You Can Save Money by Asking a Hotel for a Discount

Well, we finally have an expert weighing in on our discussion regarding asking for a discount at a hotel. Here's a comment left at my post titled A Practical Way to Save Money on a Hotel Room.

As a hotel desk clerk myself this is probably a good idea. We do not normally charge no shows, unless the entire hotel is booked, and especially if you come in late at night just try asking for a discount. I would rather sell you a room for a discount then have you walk out the door.

An empty hotel room is lost revenue for the business that can never be recouped. So, their thinking goes, why not offer a room at a discount? It's better to have a room rented out at a reasonable discount than to have it go unused for an evening.

Knowing this, you can use it to your advantage and simply ask for a discount. What's the worst that could happen -- they could say "no"?

Reader Earns 26% More Cash Back with Chase Freedom Card

Here's a comment left on my post titled Update on My Chase Freedom Cash Visa Card:

FMF - I don't know if you saw my comment on a post last week, but just an update on my card as well...We charged about $2,300 on the card last month, which was higher than normal, but my total cash back earned was right around $34. I recomputed it using my old primary card, Citibank Platinum Dividend's rules, and the cash back would have only been $27. I earned a full $7, or 26% more with the Chase card.

Unfortunately I didn't get the $50 or $100 bonus since I already had a Chase card and just upgraded it.

All of our charges went to the proper bonus categories, as well. I was afraid they would promise all the bonus money, but then not categorize them correctly, but it appears it really works.

This is my experience so far too -- they're getting the categories right.

I've already received one extra bonus for my first Chase Freedom Cash Visa Card ($100 through a mail-in offer -- $50 is the best deal I can find online) and applied for a second one because they offered me another $100. We'll see if I get it or somehow get disqualified because I already have the card and received the first bonus. I'll let you know.

The Inside Scoop on Getting Your Property Taxes Reduced

Here's a great comment left on my post titled One Positive of the Housing Decline that I thought you all would want to see:

My wife is a property tax assessor for our county, as well as a licensed appraiser at the state level. In our state, residences are reassessed every 3 years. The process is known as a "mass appraisal" because it has to be done at the neighborhood level (note that several "subdivisions" can make up a neighborhood. Quality of construction, square footage, land, and additions are some of the factors taken into account.

I don't recall the exact numbers, but in these mass appraisals, the goal (and state law) is that something like 90% of the homes should be within 10% of their "market value", that is, the price that the market would support if the property were sold in an arms-length transaction. In a year where market values are down over a three year span, the valuations of those homes being reassessed will be down. In a year where the market values are up over a three year span, the assessments will go up.

Also, due to the "average" nature of the mass appraisal, the chances of a property being undervalued are about the same as a property being overvalued. Of course, you don't hear of many people appealing their undervaluation. ;-)

While beastlike is correct about the budget being arrived at before tax rates are set, the assumption that the dollar amount of your taxes remains the same only applies if everyone in the county appealed their valuation when home values in the area drop.

The law is a bit tricky on this point -- Any property owner is required to file a "return" (think income tax return) each year during a certain window. This return simply allows you to state what you believe the property to be worth. The county can either accept your value or reject it. If they reject it, you have the right to appeal. If you do not file a return, the county's previous assessment becomes your automatic return. In essence, by failing to file a return, you are saying that you agree with the previously assessed value.

However, those homes that are up for their three year reassessment will be assigned a new value, and the property owners notified of the new assessment. These owners (one-third of the county each year) have the right to appeal their reassessment.

If you (a) did not file a return or (b) were not reassessed, then you have NO rights to appeal. This is the important part, at least in our state, and I would assume many others. If you believe the value of your home has dropped since your last assessment (or you believe a previous assessment was overvalued), FILE A RETURN. Otherwise you are stuck.

Mistakes made in square footage, additions, land, etc. are pretty much always corrected IF the process above is followed. If you come to an assessor after the windows have passed, their hands are pretty much tied. The values have been passed on to the county board at that point, and the budget will be set based on those values. The assessors cannot modify them after that point unless you filed a return (with a different value) or were reassessed in that year.

If you filed a return or were reassessed, and believe that you could not sell your property for the amount that you are assessed for, then you need to support that with reasonable comparisons of nearby, equivalent, arms-length transactions for the time period being appealed. For every appeal, my wife will research nearby transactions and see if they support the property owner's numbers. If they do, then she will go ahead and modify the assessment accordingly. It's understood that some percentage of the properties will be overvalued due to the nature of mass appraisals, and it's her responsibility to change these when they are brought to her attention.

Do NOT bring comparisons that are unrelated to your property--A father selling to a son, a foreclosed home, homes too far away from yours, vastly different square footages, vastly different acreages, etc. You are looking for comparisons that are "similar" to yours.

You can always sit down with the assessor and ask them for their comparisons. If you disagree with their comparisons, then you can appeal to the next step, in our state the Board of Equalization for the county. I would guess that your chances here depend on the quality of the assessor. If they know what they are doing, it's going to be hard for you to come up with better comparisons that convince the board that your valuation is better. For instance, my wife's valuations have been accepted over the property owner every single time in the last two years of appeals (about 40-50). Of course, she's also one of the few county assessors who is also a licensed appraiser.

If you lose before the Board of Equalization, you still have another option--you can appeal to the Superior Court. At this point there is a filing fee ($80?). My understanding is that the county attorneys do tend to settle a lot rather than go to court.

All said, it's going to take a lot of time and effort to argue an assessment that's close to the real value. If there are obvious mistakes, then you should absolutely appeal to have them corrected (make sure you file a return in order to do so). If you believe there is no way that you could sell the property for what the county's assessed value, then take that case to the assessor -- Chances are good that they will make the modifications if your numbers are reasonable. This is going to be the most likely course of action in this "down" market that we are currently seeing in most areas.

Regardless of what state you are in, now is probably the time to educate yourself on the process you need to follow next year to make sure your value is correct.

How Often Do You Check Your Bank Balance Online?

Here's a comment recently left on my post titled Money Saving Tip: Balance Your Check Book:

Here's another idea. Check your online banking account and balance WEEKLY.. if not every few days... It's an easy habit and you catch things sooner and can plan better.

I check my bank balance online every other week on average as I'm usually transferring money here or there for some reason, but if I wasn't doing that, I don't know if I would be checking my bank account online regularly.

Couple questions for you:

1. Do you think checking your bank account online is a good practice or something that's not needed?

2. How often do you check your bank balance online?

Two Examples of How Using Cash Can Save You Money

Here's a great comment left on my post titled Save Money by Asking for a Discount and Paying in Cash:

My wife and I have had fun shopping with cash recently while shopping for furniture. We were buying antiques at consignment shops, we bought 2 items and saved $400 easily. The first one was $1500 "marked down" to $895 we got it for $750. I say "marked down" because it was antiques, and I buy what I like, not what they tell me it's worth.

The other piece was $650, we offered 350, they said no way, we then said $400, they said there's no way they could do that even with cash. I said well thank you very much, and my wife and I left. As we left, I thought, "I should give that guy my number in case they change their mind". So I went back and gave him my number. We shopped at a place next door, and in 20 minutes or so, he called and took my offer. It was great!

Cash does work, try it.

Great stories!

That's a great tip that's hidden in the comment -- if they say "no", leave a way they can get in touch with you. Who knows, they may change their minds. I'm thinking of applying this principle to house hunting. If we find a place we like and make a lowball bid, it's likely the owners will say "no" the first time. But if we leave the door open with something like "well, if you change your mind, you can contact us to see if we're still interested." Who knows, a few months later they may start to get desperate and decide our offer was pretty good after all! ;-)

Another Way to Save on Moving

A reader left the following comment on my post titled Save Money on Moving:

Good friends of mine, moving from West to East, purchased a covered trailer to carry all of their belongings behind them. Arriving at their destination, they were able to unload all of their stuff at their leisure, thereafter selling the nearly-new trailer for more than they paid for it! Even with any additional, short-term insurance costs, they came out pretty well at the end of their moving adventure.

Sounds like a good, creative, money saving idea!

A Reader Endorses The American Express Blue Card

In my post titled American Express Blue Cash Card Named Among Top Cards by Money Magazine, I recently had this comment left:

I've used this card for 6 months and it has been great! I use the card for EVERYTHING. I do not carry a balance and will spend about 28k a year on it. It looks like I'll end with a REBATE of about $600 for the year. If I am going to spend the money, I might as well get something back for doing it. I don't view the $600 as "making money" - I view it as a rebate of the purchases I make. Nice card.

A few thoughts on this:

1. That's a 2.1% return, which is VERY good. He must have had substantial gas/grocery/drugstore charges once the card got past $6,500 in charges. At this level, g/g/d rebates are 5% and the cash back can really add up.

2. I've used the Blue Cash from American Express card for years and love it. However, next year I'm moving to a hybrid card strategy (using Amex Blue with the Chase Freedom Cash Visa Card) to try and maximize my cash back returns.

3. It's likely the reader could have earned more if he had applied a similar strategy. For details, see How You Can Earn Over 2.6% Cash Back by Using a Combination of the American Express Blue Cash and Chase Freedom Cash Visa Credit Cards.

Bankruptcy Is To Be Avoided at All Costs

In Bankruptcy or Foreclosure? I had one reader leave this comment:

I personally can't comment on foreclosure, but the effects of bankruptcy tend to linger a very long time - personally, professionally and emotionally. Ours happened 8+ years ago and of course, it is still reflected on our credit report. It was extremely embarrassing when we went to purchase our daughter a car and it was brought out in the negotiations with her sitting beside us. We had never discussed this with her - she was only 8 at the time of the bankruptcy. It was not something that concerned her and she didn't need to be concerned about her parent's financial stability. I have missed out on job opportunities due to this also - having been upfront and honest with the potential employer. My best advice - work as hard as you can to do whatever you can to prevent declaring bankruptcy.

And a few days later, I found this piece that says big lenders keep squeezing consumers who filed for bankruptcy. The highlights:

The Raleigh, N.C. factory worker pulled himself out from beneath a mountain of bills by means of a bankruptcy proceeding that wrapped up in 2002. One of the debts the judge canceled, or "discharged," was $9,523 Rathavongsa owed to Capital One Financial, the big credit-card company. But Capital One continued to report the factory worker's discharged debt to credit bureaus as a live balance, according to documents filed in U.S. Bankruptcy Court in Raleigh.

This kind of failure by creditors to update credit reports happens with some frequency, consumer lawyers and court-employed bankruptcy trustees say. And it can have consequences: In September, 2003, when Rathavongsa tried to close on a $274,650 mortgage for a new house, his would-be lender, Wachovia, said he would either have to pay Capital One or show proof from the credit-card company that the debt had been discharged. Despite several calls and a letter from his attorney, he says, Capital One never revised the credit report. To obtain the home loan, Rathavongsa eventually did what many consumers in this situation do. He gave in and paid Capital One $9,523 he no longer legally owed.

These are just two of the horror stories associated with bankruptcy. I'm sure someone will comment here on how well their bankruptcy went, but if it was me, I'd do everything I could to avoid filing for it. It would certainly have to be the last chance I had to get my life back before I'd proceed with it.

Anyone else have a different perspective?

You Don't Have to Make a Fortune to Become Rich

In It's Easy to Become Wealthy, I commented that I loved the book The Millionaire Next Door One commenter left this response:

I remember a few years ago when I was in college we had an entire lecture in my stats class about the flaws in The Millionaire Next Door book. I wish I had the notes on me from that time but suffice it to say there were a host of problems and it is why the book is popular with the average Joe but not with any professionals, researchers, etc. A couple of things I remember, the focus for instance was on the lowest end of the "rich" scale and was disproportionately skewed to much older people. So their typical "rich" person tended to be people who saved for a long time and built a decent (but by no means large) nest egg for retirement. The surveys took several hours and they paid something like $100 to the respondents to do it. I know of few rich people who would spend an entire day taking a survey for $100, this biases the results to "penny pinchers".

The best wealth studies I've found are the ones put together by private banks because for them it is actually their business to understand the profiles and habits of the rich, they are after all the people they service. If you read these you will see that the rich in fact ARE what you'd expect. They are mostly people who earn a lot and build up considerable net worths ($5mm+) and do live the life. They typically have nice vacation homes, I think the median amount they spend on a 1-week vacation was something like $25,000 from one of the reports I read. They do tend to buy high end luxury brands and pay for personalized services. They are overwhelmingly disproportionately educated in top schools like the Ivy Leagues.

The Millionaire Next Door book is popular because it gives the Average Joe some hope. It tells you what you want to hear, that even though you're not earning a great deal you can be "rich". It sells well because it makes you feel good that you can point to people who have $100,000 BMWs and make the ridiculous assumption that they probably can't afford to live the way they live.

If you want to really be rich, put down the dumb mainstream books like The Millionaire Next Door and instead read about how truly wealthy people became wealthy. More importantly go out and EARN MORE MONEY. Saving is important but there is a strict limit to it. If you make $100,000 a year which is pretty average for most white-collar professionals these days, after taxes and very tight living expenses you might be able to save around $30k. Not a lot of money. If you try to earn more money, making an additional $30k is not much at all. If you're young enough, try to get into top schools. The average MBA from places like Harvard, Columbia, Wharton, etc. makes over $500K/year between 5-10 years out of school. I know a lot of these types of people, they don't own their own businesses, they don't have to take all the risks associated with that, they worked hard, went to top schools, work as investment bankers, doctors, lawyers at top firms, etc. and make several hundred thousand or more per year and they are in their 20s or early 30s. You can save a million dollars in a couple of years that way, after a little while you'll build up enough to make great passive income from your investments.

I remember a profile of an investment banker after the dot-com bust. He was in his early 40s and got laid off, he was not a rock star banker, just an ordinary one. They were talking about his life as transitioning from being a banker to being a stay at home dad. The thing that struck me though was that he had saved over $15 million in liquid investments. Partly do to getting out of the dot-com stocks in time, but the point is even these average guys in some industries make millions. The entry ticket to these industries is usually an Ivy League degree, hard work, and luck. Of course if you're already out of college thinking about this is pointless.

I have a few comments on these thoughts that I wanted to give:

1. Whether or not the book's research is accurate or not is not really the point to me. For me, I find the principles the book touts as much more valuable -- ideas like living below your means and so on. To me, this is where the real value lies in the book. The principles work -- my life is proof of it.

2. I think I disagree with the comments above that state you can not get "rich" on an average income. Of course, it depends on what you mean by "rich." If the commenter means having a net worth of $10 million or more, then I agree with him. However, very few people have this amount of money and to me they would be classified as "ultra-rich." But if you look at the net worth's of most Americans, you'll see that as little as $500k in net worth will make you richer than most people. This is a level of net worth that even someone with a very average income can achieve.

3. The commenter proves my assumption in his own example. If a person saves $30k per year and invests it at 10%, in 10 years he'll have $478k. In 20 years, he'll have $1.7 million. And in 30 years, he'll have $4.9 million. And this isn't rich? Maybe I'm missing something.

4. Yes, certainly having a high income helps -- and that's why I write so much about managing your career. Yet people CAN achieve high levels of net worth without making $500k per year. Run the numbers and you'll see that they prove this to be true.

To end this post, I'll leave you with another comment that was left on the same post as the comment above. It demonstrates EXACTLY what I'm talking about:

In 1980, I started as a lowly staff accountant in a national CPA firm earning $14,500/year. I managed to save money by living below my means. How? I drove the same car for 10 years and then bought another small, fuel efficient vehicle; I shopped for bargains; and my first priority, paying me. I worked more than 70 hours per week electing to be paid for the comp time instead of taking time off. Hard work and savings paid off; my salary increased but my life style did not incrementally keep pace. At age 40, my net worth was $1 million and I was still driving a Toyota Corolla. At age 50, my net worth is three times that at age forty but I still live as though I was earning substantially less. I am now 51, the house has been paid off some 4 years and I don't have to worry about losing a job or relocating to find better pay. I work about 60 hours per week not because I have to but because I love to. My parents had no money but I am proof, that with discipline and the ability to forgo gratification, it can be done.

Ace an Interview by Preparing for It

I had a couple great comments left on my post titled A Simple Recipe for Job Interview Success. Here's the first:

One more thing I can add: do your research. Nothing is more impressive to an interviewer than a candidate who comes to the interview prepared and can show that he understands the company, its products, the industry and the challenges that the company faces. As a hiring manager, meeting a candidate that has done his homework tells me that I would be hiring an organized, thorough and well prepared individual. It also tells me that this person will be able to hit the ground running.

A second commenter agreed with this:

As head of recruiting for a large company (over 33K employees) I can't tell you how many people - executives as well - come in totally unprepared for an interview. They haven't researched the company, they have no questions for us and seem to have not thought through their answers. Curtis is also right in that you should be yourself - otherwise you may take a job that doesn't suit you & that doesn't benefit you or the company. We try very hard at my company to make sure the persons skills are what we need and equally as hard to discover if the person is a culture fit. What you have outlined as critical steps are indeed the critical steps - be prepared & quantify your achievements.

It's not that hard, people. Really. Put in a little work up front, get to know the company and how you might contribute, and practice answering the top interview questions. Doing these small tasks will set you well ahead of the pack.

Great Deal in Case You Missed It

The following comment was left this past Saturday on my post titled Foreclosures Hit High, Could Be Time to Buy for Me:

Start searching foreclosure deals today. We will offer a special price for all Freemoneyfinance.com readers. Sign up now and pay only $23.80 per month. That's a 40% savings! Sign up here: https://www.foreclosure.com/registration.html Use promo code: freemoneyfinance

Not sure if: 1) it's valid and 2) who wants to take advantage of it (I might!) but in case you do, I wanted to post it "up top" so all could see the offer.

Camels and Needles

On my post titled Is It OK for a Pastor to Earn a Good Salary?, we got into a discussion of the following verse:

Again I tell you, it is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God. Matthew 19:24

One of the commenters came up with this explanation of the passage:

I have to address the camel going through the eye of a needle. This is one of the most misinterpreted verses because no one researches the context of the day. The eye of the needle was a gate in the wall of a city. It was made with the intention of only letting humans and some small livestock through, but mostly humans. It would be very difficult to get any large livestock (like a camel) through this gate. It would not be impossible.

I have heard this teaching too, though I don't agree with it. More on that later, though one commenter says the following:

As for the "needle's eye gate", there is no such place in Jerusalem. The idea of Jesus' saying referring to a gate in Jerusalem seems to have arisen between the 9th and 11th centuries.

Another commenter went on to explain what he thought the verse meant:

Jesus was speaking specifically to that young rich man's situation. The amount of $ he had wasn't a problem (we assume it was not ill gotten), his attitude about it was. A man who only has $10 to his name is just as likely to not enter heaven if his attitude about it is wrong. Jesus had interactions with several other wealthy men (Nicodemus comes to mind) in the Gospels but he does not explicitly tell them they must give up their wealth so we can not assume that Jesus was speaking universally about any and all forms of wealth.

Another agreed:

Here is my interpretation of this passage. The amount of money that we have is irrelevant. We are all meant to live abundantly. The problem arises when your love for money supersedes your love for God. Jesus is pointing out that it is easy for a person with lots of money to become attached to the money and therefore makes it hard to give that up for God. i.e. Love for God above all else. Of course this can happen for anyone with any amount of money.

Here's my take on the issue:

1. To look at what the verse means, you need to look at the context of it. Here's the complete story from Matthew 19:16-26:

Now a man came up to Jesus and asked, "Teacher, what good thing must I do to get eternal life?"

"Why do you ask me about what is good?" Jesus replied. "There is only One who is good. If you want to enter life, obey the commandments."

"Which ones?" the man inquired.

Jesus replied, " 'Do not murder, do not commit adultery, do not steal, do not give false testimony, honor your father and mother,' and 'love your neighbor as yourself.' "

"All these I have kept," the young man said. "What do I still lack?"

Jesus answered, "If you want to be perfect, go, sell your possessions and give to the poor, and you will have treasure in heaven. Then come, follow me."

When the young man heard this, he went away sad, because he had great wealth.

Then Jesus said to his disciples, "I tell you the truth, it is hard for a rich man to enter the kingdom of heaven. Again I tell you, it is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God."

When the disciples heard this, they were greatly astonished and asked, "Who then can be saved?"

Jesus looked at them and said, "With man this is impossible, but with God all things are possible."

2. It's notable that the same story is told in Mark 10 and Luke 18. Mark 10 adds (after the young man says he's kept all the commandments) in verse 21:

Jesus looked at him and loved him. "One thing you lack," he said. "Go, sell everything you have and give to the poor, and you will have treasure in heaven. Then come, follow me."

And the Luke version ends a bit differently in verses 26-27:

Those who heard this asked, "Who then can be saved?"

Jesus replied, "What is impossible with men is possible with God."

3. I think Jesus was talking about a real camel and a real needle -- not some sort of gate. He's basically setting up a situation that is impossible in human terms.

4. I agree with the commenter above who thinks this is about the person's attitude. It's hard for a rich person to enter the kingdom of heaven because he usually has other things on his mind, namely his wealth (protecting it, growing it, enjoying it), and puts it before everything else. As such, serving God and living according to Jesus's teachings is far, far removed from his thoughts and actions.

5. That said, it's not impossible for a rich man to enter the kingdom of heaven because with God, all things are possible (the final point of the passage.) If Jesus was simply talking about a gate and something that wasn't really that hard, why would it have seemed impossible in the first place? And why would we need God to make it possible if people really could? No, I believe Jesus is saying that by man's ability alone, it's impossible to enter the kingdom of heaven, but with God's grace, it is possible. In this context, he's talking about a particular issue associated with wealth, but I think the principle extends universally to all people -- no one can earn his way to heaven. Consider as support Ephesians 2:8-9:

For it is by grace you have been saved, through faith—and this not from yourselves, it is the gift of God— not by works, so that no one can boast.

6. The bottomline here is that wealth doesn't disqualify you from heaven, but a bad/incorrect attitude can (whether you're wealthy or not.)

That's my take on the verse. Do you agree or disagree?

Save Money on Moving

Here are some thoughts from a reader who left a comment on my post tilted Money Saving Moving Tips:

I have been preparing to move cross-country for family reasons and have been doing extensive research on the various ways to do this cheaply and quickly on my own as well. I have already helped my girlfriend move cross-country and have assisted several others move regionally, cross-country, and internationally through self-moves and with government paid moves. Here is a few I would like to add.

• If renting a Uhaul or penske truck/trailer/van for a long distance 1 way move the price will vary wildly by where you are going to move to. If you are moving to a small area then the fees can be 2-3 times as much. In my case it was going to be $1500 to rent a trailer but if I returned it in a neighboring larger city it was only $600!

• When negotiating salary or benefits with a company in the new area that does not offer relocation ask if they will do a partial relocation package. The companies are normally figuring on a complete relocation package for a 3-4 bedroom house as well as temporary housing while house hunting in the local area. For a cross-country move with complete door-to-door services including boxing, packing, shipping, and unloading it can easily range from $20-50k+ from a reputable mover! For most mid-career positions this is an expense that I understand most companies do not want to pay for but most will be willing to pay a smaller amount. Several companies which did not offer relocation packages were easily convinced to offer a smaller amount ($5k) as a hiring bonus. This amount would have easily covered my personal moving costs which included Uhaul rental, mileage rate, per diem (lodging and food), and packing supplies. Many companies will also allow you to inprocess at the company before the move and this allows time to house hunt at the same time.

• Paying for professional movers for a long distance move is never cheaper! It is much more convenient but never cheaper. I obtained numerous quotes and it was literally cheaper or a similar cost for me to buy a full size truck, enclosed trailer, pay for gas/time/food/hotel, ship my car, and move myself! To completely move my girlfriend's sparsely furnished small 2 bedroom apartment from DC to the Seattle area was between $25-30k!

• While definitely not cheaper it is often more "frugal/economical" to buy generic rubbermaid type containers if decent boxes cannot be found for free or nearly free. I did not believe this until I put it into action when helping my girlfriend move cross-country. It was a short notice move and we could not find boxes quickly of a quality that we would trust with her things so we bought numerous plastic containers on sale for a price that was 2-3x the cost of cardboard. They were used to pack, move, and then after the move the boxes were loaned out and given to others moving or in need. The remainder are used at her place for storage, organization, and several other uses. There was a higher initial cost but the multiple uses of them over time drove down their per-use cost

• Hire out the help loading and unloading when doing long distance self-moves through moving services such as http://www.twomenandatruck.com/ They will pack and load your things into a rental truck/trailer faster and more efficiently than most people can. There is a minimum amount of time or money they will come out for but the time savings was well worth the reasonable cost. A discount can often be negotiated if it is an off-time or between large jobs.

Good thoughts! Anyone have anything else to add?