Carnival of Wealth, Fijian Independence Edition

October 10, 2011

Fear God and honour the Queen

 

Happy 41st birthday to our Fijian readers. Fun Fiji facts:

  • Fiji has about as many people as greater Hartford, in an area slightly bigger than Connecticut and Rhode Island combined.
  • Its nearest neighbor is the Wallis & Futuna Islands. Continuing with the theme, they’re about as far away from Fiji as Hartford is from Ottawa.
  • The prime minister’s name is Frank “Shy Boy” Bainimarama.
  • The Fijian dollar is worth around 53¢. (Not 53 Fijian cents. 53 American cents. Don’t be stupid.)

Now, onto the Carnival: an assortment of personal finance blog posts collected and inspected over the past few week. If you want to submit yours to next week’s Carnival, click here. But we’d prefer that you’d just read. Therefore:

Steve Zussino at Canadian Personal Finance debunks the common myth that the U.S. government recognizes something called “dual citizenship”. You can become Canadian if you want, but the IRS will still calculate and demand you pay your taxes.

Tim Chen at Nerd Wallet was probably the kind of guy who routinely had Monday morning’s homework done on Friday night. No, that’s not an ethnic stereotype joke. He just has an amazing knack for offering us his following week’s submission mere seconds after the current week’s goes live. He’s first in line, every time. This week Tim (or actually, Anisha Sekar) gives us reasons to get the Citi ThankYou credit card.

If there was ever a site manned by robots and Bangaloreans, it’s the tautologically titled All About Living With Life. Brought to you by Charles Chua C K. (We already made the “Louis’s brother” joke a while back.) Before Mr. Chua gets around to placing his initials where they belong, he’s given us this keyword-rich post on how to determine the worth of a stock. The form is awful, but there’s some valuable content in there if you’re willing to dig.

Benjamin Graham called dividends “the investor’s secret weapon.” In Canada, that’d be “the investour’s secret weapoun.” Mr. Cheap writes about Canadian dividend stocks at Money Smarts Blog.

What’s keeping you from starting a business? Yeah, yeah, steady paycheck, security, the economy’s bad, your wife wouldn’t approve, your parents are ill, your kids need you, your dog has a rash, whatever. We’ve heard all the rationalizations, and so has Mike Donelly at AnotherWay.org. Speaking from experience, he explains why there’s no better time than now to follow your dreams. Assuming you even have dreams in the first place, of course.

Imagine if you were walking across the street, minding your own business, when a truck ran a red light and killed you. Sure, your brain would detach from your spinal column and your blood would drip all over the asphalt, but what about your assets? And your heirs? They’re the ones who’d suffer the most (except physically, that’d still be you.) Jill at My Dollar Plan explains how that doesn’t have to be the case, with her estate planning tips for folks of every age.

Not paying attention to every penny you spend? Yes! Pat S. at Compounding Returns thinks it’s ludicrous to let frugality play a part in every single decision you make. If you’d rather wake up half an hour later, then do so and drive to work instead of riding a bike. Pat S. will also buy peaches from a retailer instead of growing his own, thanks. (That sound you heard was the guy who runs The Simple Dollar banging his head against a wall. A homemade wall, made of adobe bricks he dug out of his very own backyard with an abandoned shovel that he found on the street corner.)

Some of the biggest idiots we ever met, we met in college. The idea that a college degree is vital to a successful future has been debunked time and again. There are millions of examples of productive non-collegians, and even more examples of unproductive people with degrees. Boomer and Echo explain how there are plenty of ways to put 4 years to good use.

The Wealthy Canadian reviews The Wealthy Barber Returns, which he claims is the best-selling book in Canadian history? Really? It sold more than Ken Dryden’s The Game or My Story, My Dream by Celine Dion? Okay, if you say so.

We’re hundreds of thousands of years in as a species, and some of you are still deciding to ruin your lives by becoming parents. Masochism runs strong among Homo sapiens. This week, Darwin’s Money laments ever having kids leaving his 7-year old unattended so he could flood the house (from the second floor, no less.) Darwin got out for just a few hundred bucks. Some of his readers weren’t so fortunate.

Most personal finance bloggers could learn from Mike Piper. The Oblivious Investor is back again with an expose (can’t be bothered to find the series of keystrokes that makes an acute accent) on Vanguard. They recently announced major changes to their “LifeStrategy” funds. Are the changes positive? And what type of investors should look at these funds?

We usually count on Erin Pavlina to give us the worst, least relevant submissions every week. This week, however, she takes a back seat to somebody named Craig at GayNetworkBuzz, “the largest provider of gay chat and gay dating in the UK”. Next week, he’ll take a back seat to…never mind, too easy.

We’ll do it again next Monday, and every foreseeable Monday until the end of time. ‘Til then.

Filed Under: Carnivals Tagged With: ,

The Only Credit Card(s) You’ll Ever Need

October 7, 2011

The worst credit card ever. Why? $7500 fee.

If you missed Wednesday’s post, today’s is Part II of the final (for now), definitive discussion on which credit card you should get. You need one that’ll protect you fully against fraud (discussed Wednesday), and one that gives you the best smorgasbord of rewards.

The problem with the latter criterion is that most rewards are retarded. Examples:

You don’t need any of these things. Well, you need tires, and maybe yoga pants. Maybe even NFL memorabilia, if you’re 12 years old, but that means you’re too young to have a credit card anyway.

The problem is that having these particular pieces of cheese at the end of the maze gives you incentive to change your buying behavior. Should you spend your last $50 on that tchotchke? Well, if it gets you that much closer to a “free” bouquet from ProFlowers, why not? Besides, this Friday is payday.

Most any credit card reward in the form of a discrete item is going to be something you build toward, rather than something you earn instantly. If a furniture store-branded card gives you 5% of your bill back in the form of armoire credits, you’re going to have to spend a few thousand dollars before you can redeem anything.

You want CASH. A flat percentage returned to you for every purchase you make. Discover was the first to do this, and it worked beautifully. Get 1% back, in $20 increments, and you don’t have to change your behavior.

Think about how much it costs the branded cards to provide you with their rewards. Macy’s sells its clothing for a 100% markup or thereabouts. That generous 3% reward rate they’re offering you dwindles to 1½% when you look at it from their perspective. Also, you can only wear so many clothes. And let’s not even get into gimmicks like the “monthly cardholder savings event”, in which the store keeps the lights on an hour longer for the idiots it wooed with such “generosity”, does so to make the gullible feel privileged, then gets all its money back and then some.

This bears repeating: get the card with the highest cash rewards. There’s more to it than simply looking at percentages. A card that offers 1½% should be better than one that offers 1¼%, but if the former pays you only in $150 increments (i.e., you have to buy $10,000 worth of stuff) while the latter pays in $20 increments, then you might want the latter unless you spend an awful lot.

So what card to get? It’s easy. First, only look at cards that don’t charge a fee. If this isn’t obvious, God help you. And that means cards that never charge a fee: not “no fee for the first 2 years, then $95.”  It’s a competitive market. Free cards are there for the asking.

Read the agreement.
Then read it again. 84% of the problems in the world could be solved if everyone did that.

Then figure out what cash rewards card fits you best. Looking at the above example, we’ve got:

Card A, which gives you a $150 credit every time you buy $10,000 worth of stuff. If you buy $9999 worth of stuff, you don’t see a dime until you spend another dollar.
Card B, which gives you a $20 credit every time you buy $1600 worth of stuff.

If you ring up $10,000 in purchases every month (some people do), get Card A. In a typical month, you’ll be $30 ahead of where you’d be if you got Card B.

If you’re not quite at the level of the big spender in the first example, and charge, say, $800 a month, you might want to (but don’t necessarily want to) get Card B. You’ll receive a $20 credit every couple of months, as opposed to waiting well over a year to receive $150 with Card A.

“Points” are for idiots. With every purchase, you want pennies, not points. Well, there’s one exception. Slight hypocrisy alert:

If you know you’re going to patronize a certain business anyway, then it might make sense to go with the rewards. Hear us out. We probably mentioned it someplace on the blog (can’t be bothered to look), definitely in the book, but we use a particular hotelier’s American Express rewards card. Only because we know we’re going to stay in this chain’s hotels a few times a month anyway.

Does that tie us to this chain? Maybe a little, but if we can redeem a free night while their closest competitor is holding a fire sale, we’ll stay with the competitor and save the free night for a later date. Plus, it’s American Express (see universality, above.) If we never left the United States we’d probably go with a Discover straight 1% cash back card.

Assuming there’s no particular retailer you’re already spending significant money with, i.e. you wouldn’t be changing your behavior to patronize that retailer, get a Discover card. Or if you travel out of the country, an American Express Blue Cash Everyday card (not the Blue Cash Preferred, which costs $75 a year. Which we trust you’d notice when you read the agreement, instead of taking our word for it.)

Glad we could help. Tell us where we’re wrong:

**This article is featured in the Yakezie Carnival October 24, 2011: Just do it Edition**

Filed Under: Consumer Debt, Credit Cards, Making Smart Choices, Travel
« Previous Page
Next Page »