Monthly Archives: May 2007

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June 2007 Numbers

Another month passes, another step in the right direction.

A gain of roughly $4k was less than I’d hoped for, though it’s been our average gain for the first 5 months of the year, but we’ll need to step it up a bit if hitting $100k by the end of December is going to happen.

Since the mid-month report, I’ve added back in the trade-in value of my second car that was involved in the accident. We don’t have it back yet from the body shop, but apparently it’s going to look as good as new — but with that amount of body work on record, it’s value dropped over $1k. That’s okay though — I can’t say there was ever a real solid plan to sell it or trade it in anyway so it will continue to “decorate” the garage.

Another good month on the stock market too. While the 401k didn’t go up as much as it did in April, it’s still becoming very apparent that the secret to wealth lies there. I really don’t have much in there and I’m sadly not contributing much while I attack my debt, yet it manages to go up well over $1k per month consistently — and almost $2k for the past two.

On the liabilities side, we wiped out the home improvement loan I’ve complained about, which is a huge load off of my shoulders. Since March, we took it from over $8k down to nothing, perhaps making this the last month (finally!) of really aggressive debt reduction. Right now, we don’t have anything left sitting at a rate higher than 5.35%.

On the flip side… there is the credit card debt. It nearly doubled this month, but that’s due to the 0% transfer we’re taking advantage of to finance the home improvements we’re planning to make this summer. The balance is currently sitting in an ING Direct account making us about 77 cents each day so it doesn’t really feel like debt. Get back to me on that next May!

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With all of the budget numbers floating around in my head 24/7, every now and then a “number” from the past just comes to mind. This morning, it was the number 546 77 77 that awoke me.

You have to say it like that. Five four six, pause, seventy seven, seventy seven. While in the shower I kept repeating it in different silly voices. The “angry” version seemed the most familiar. What the hell was it?

By the time I ran out of hot water, I’d come to the conclusion that it was a phone number. I’ve actually lived in two places where the local exchange was 546, but I know I’ve never been fortunate enough to have such an easy to remember phone number. Pizza place maybe? Hmmmm…

Most things that wake me in the middle of the night date back to my years in University so I tried to isolate it to something somewhere in the mid-1990’s. Was it some constant represented by a greek letter used in chemistry? Physics? Damn.

No, it had to be a phone number. Five four six, pause, seventy seven, seventy seven.

Driving to work, I listen to AM radio (yeah, yeah, I know people think I’m too young to listen to talk radio), and they have some of the worst “local” commercials and that’s when the, now compact flourescent, lightbulb went on.
Jim Shapiro
“I’m JIM SHAPIRO, the TOUGH, SMART lawyer. 1-800-546-7777. Jim ‘THE HAMMER’ Shapiro. Call 1-800-546-7777.”

It was from the funniest ever daytime (or sometimes very latenight) commercial. This guy used to get so angry in his commericals, I swear, it was like his head was about to explode. He was INSANE. I mean, there is no way I’d call this guy to represent me. No way.

Apparently, now that I’ve googled him, he practiced out of Syracuse which would explain why we could see his commercials north of the border in Canada. What I’m not sure of is why THE HAMMER would have paid for advertising on the local CBC station?

Being poor students, we didn’t have cable and the one CBC station (CKWS in Kingston, Ontario) we could pull in with rabbit ears had Hockey Night in Canada, so we weren’t really looking for anything else. The only place we could have seen the commercials was on a Canadian station. Perhaps it’s because Watertown, New York could likely pull in the signal. Eitherway, that’s still not really very close to Syracuse.

I can’t tell you how hard we’d laugh each time THE HAMMER came on. And being that we were generally watching Baywatch, Star Trek, and Fresh Prince repeats, well, lets just say he was good for atleast one 30 second spot every single commercial break. Six times an hour, baby. We’d recite his whole ad — in public. It never got old. “I SUE DRUNKS!”

It’s kinda sad that this is the only type of knowledge that’s stuck from my days in university.

Here’s some video:



Honorable mention for best mid-1990’s greater-Kingston local commercial goes to Bob Clute Pontiac — the dealer with the handshake.

Seriously, someone out there has to be able to sing their old jingle with me. In one commercial, I think they had the entire Belleville Bulls hockey team singing it. It was truly a hit song in the region.

No, really.

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The best kind of money is… FREE MONEY!Liz Pulliam Weston’s column today on MSN Money is about the 0% balance transfer money making scheme that I’ve finally had the courage to attempt.

It’s legal money laundering as far as I’m concerned. In her article she calls it “arbitrage”, which I guess is just a sexier term for the same thing.

For those who don’t know, she explains the whole thing succinctly, “Arbitrage is simply exploiting a difference in interest rates, by borrowing at the lower rate and investing at a higher one.”

It’s comforting to know that my exact plan of attack is exactly what she described in the article. I’m using a 0% credit card offer and then dropping the whole load into an ING account.

What’s not comforting is that she mentions that the offers like this are getting harder and harder to come by, of course, just as I’m testing the waters. Figures. If this first run went well, I was going to start making moves like this with greater frequency…

That said, here’s to hoping my big check from the transfer is in my mailbox this afternoon so I can get it in before the long weekend.

Combined with the events of this morning, that’d make this Thursday one of the best on record.

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Bank of AmericaWith today’s paycheck from the 9-5, err 7-5, job I think I’ve officially reached the point where my available assets (checking, online savings, and treasury bonds) are higher than my credit card debt. For good this time.

For last few weeks, I’ve popped my head above the line a few times, but regular household expenses have pushed me back under.

Now there is a buffer. Hardly a sizeable buffer, but enough to finally start growing my wealth the way I’ve planned to for so long. It’s been over 10 years since I’ve been in this situation — and this time it’s exciting!

Also of note, this morning, I paid off the last $420 of the $12000 unsecured loan from Bank of America that we used to finance our new roof back in December of 2006. That was the loan that they gave us at what I considered a ridiculous 15.5% rate. Grand total in interest paid was $643.83, which hurts, but the thought that we were able to payback that much money in the span of 6 months (and nearly $8k of it in the past two months) gives me a huge dose of confidence for our future projects.

In hindsight, it probably would have been cheaper to have used a credit card to finance the roof, but the idea of a fixed rate and set-in-stone monthly payment was the main draw at the time and it would have put me back so deep into credit card debt, I’m not sure if I would have had the steam to keep going as aggressively.

Also this morning, I just got off the phone with Customer Service at Bank of America. I hate their automated phone system — they ask for your social security number, which is fine, but ‘0’ is also an option. What happens when the first digit of your social happens to zero? Bad programming. I can say that because my real job involves that exact type of thing.

Anyway, the reason I was calling was because I’d been dinged with a $16 maintenance fee on my checking account for the past two months. The first month, I just ate it because I do remember there being something in there on the original $12k loan application about getting a half percent rate reduction if I switched to a “Preferred” checking account. I initialed it, or something, thinking it would save me so money.

When I first noticed the $16 charge (yes, they same day they nailed me with it), I searched through all of their “Regular Checking” fees thinking that maybe I made too many transfers or something. I do some business in Canada from time to time too, maybe it was some rogue foreign currency fee they were hitting me with, but no matter how I broke down their listing of fees, I couldn’t come up with $16 exactly.

Then I read up about their “Preferred” plan. If your combined accounts are under $10k, the generic maintenance fee is… yep, $16 on the nose. My plan now was to kill off the loan, then call to get switched back to the plain old regular checking I’d been on in the past.

So, back to the call… The first woman I spoke to — her name was unpronounceable — had no idea what I was asking so she transferred me and a gentleman named Paul Bramble took the call.

I’m not sure if it’s fair to classify them as telemarketers, but like the folks I spoke with at Allstate last week, I’d classify Paul as top echelon. He was good. He explained that I wasn’t on the Preferred Checking plan, but that I had been in the past. This meant that I couldn’t really “switch” to regular checking because that’s what I was already on.

Then I said I’d just been hit with a $16 maintenance charge two days ago — and that my account balance had never dipped close to the $750 minimum required on regular checking accounts. (It’s funny, when I opened the account, the minimum was $1k — but with all of the bank takeovers and name changes, resulting in BoA eventually swallowing nearly every local bank in the market, that minimum has been lowered to $750).

In the end, I’ve been refunded the $16 charge and I now know I can push things down to $750.

Not bad for a Thursday morning.

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Allstate LogoYou’re in good hands will Allstate.

Well, I’m not going to go that far just yet.

We’re up to 5 phone calls so far since I originally filed my claim online on Saturday after the accident. I received a call from a pleasant woman that afternoon confirming the information I’d submitted online — or more accurately, I had to regurgitate all of the info again.

On Wednesday, I received a call from “Joe” at Allstate and went through it all again. Where was the accident? How fast were you going? Did you get a plate number? Where is the car now? I’m not sure if it’s that they’re disorganized, or if they’re going to sit and compare my answers from the recordings they have before determining what to do.

Yesterday morning, rinse and repeat, but this time it was “Angela” from Allstate. One thing I do have to mention is that the staff they have in their call centers are all very pleasant. They all spoke the Queen’s English (which is unusually rare these days), so at no point did I feel the need to hang up and call them back hoping for a better agent. I was never on hold for more than 20 seconds, and they didn’t sound as if they were brain dead zombies reading from a script.

The in the afternoon, the adjuster called. He was “Mike” from Allstate, though he’s likely a hired gun who works for a ton of insurance companies. Again, very upbeat and pleasant guy. Not being from the area, I asked where he’d take a BMW in that condition and he suggested a “Johnson Autobody” and gave me the number. I told him, “Sure, that sounds fine,” and took down the contact info.

In the meantime, he said he’d call them to give them the heads up and that I should call them later on in the afternoon to authorize them to pick the car up. Wow — this is sounding too easy.

Not 5 minutes later, my phone rings again, this time it’s Wayne from Johnson Autobody. Very nice guy. He went through everything that was going to happen — and all around seemed like a really great guy — over the phone. After explaining the brief history of the company, he gave me three contacts to call at the autobody place in case I had any questions at all.

Certainly not the stereotypical call you’d get from an autobody — no loud torque wrenches in the background, no loud music blaring, no gum smacking, and again, he spoke proper English — very VERY professional! I was starting to think this whole thing might not be as stressful as I’d originally thought.

Received another call from the adjuster, Mike, with the estimate (ouch!). I told him I’d already spoken with Wayne and things were good to go — he offered to leave the check with the car at the Citgo so the Autobody could pick them both up. His job was done.

I didn’t leave the keys with the Citgo after the accident, even though it wasn’t drivable, but I wasn’t too keen on leaving my keys there so I made the journey out to Johnson Autobody to drop them off. Looks a bit like the picture they have on their website — it’s tucked behind another auto place, so it’s a bit tough to see from the road, but once I stepped into the office, what little remaining apprehension I had over the whole thing quickly evaporated.

I wish this place were closer to home — I think I may have finally found a mechanic’s place that I like; this whole thing is going to turn out okay.

I’ll report again when the car is ready to come home with how they did.

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Piggy BankA fellow resident of New England, Boston Gal asked an interesting question a few days ago on her Open Wallet blog, “Can you really separate money from emotions?”

Here’s an excerpt:

I have always been the type of person who tries to see things from another’s point of view. Perhaps this is why I tend to tip more than is warranted. It could also be why I seem to do okay as a landlord. I think about what my tenant would want and try to provide that (within reason). Empathy and finances seems to work for me.

When I was younger fear was a great motivator. Fear of never being able to afford to move out of my Mother’s house prompted me to buy my condo at auction. Fear that I would not be able to afford said condo lead me to work harder and eventually change jobs and get onto a better career path.

Once I felt confident in my abilities to work and support myself, the fear went away to be replaced by worry. Worry that I might not have enough saved to handle periods of unemployment. Worry about dealing with unexpected expenses. This prompted me to get serious about funding an emergency account. It also helped me keep my spending in check and start living on less than I earn.

Eventually the worry was replaced by satisfaction. I had money in the bank, consumer debt was eliminated, and retirement savings were gaining steam. Money was no longer tied to negative motivational emotions, now it was positive. Adjusting to that took a bit of time.

She’s a few years ahead of me in her quest for financial freedom, of that I’m jealous…

I haven’t reached the satisfaction level just yet. I’m in the worry stage right now, but just like she described, fear was/is probably my biggest motivator too. I do worry about what I’d do if I suddenly joined the unemployed. I also worry about how much I’ll have to retire on. I’m afraid of a dismal future.

I can’t claim to have ever gotten serious about funding an emergency fund. You see people on personal finance blogs and message boards rhyming off left and right that you should have 6 months worth of expenses saved in an emergency fund. I don’t know about you, but 6 months worth of expenses for me is a ridiculously obscene high number to have sitting in a low rate savings account.

I also think that, to a degree, even when I was living paycheck to paycheck (which I sort of still am), I always kept between a $1000-$1500 buffer in my checking account — just in case. I guess that was my equivalent of an emergency fund.

What I got serious about was controlling my current spending, analyzing my past spending, and then weaning myself off of the credit cards.

All the bunk that Clark Howard spews is true. The balances only go down when you stop using them. I chopped three of them up, and while I didn’t put one in a block of ice in the future (I was never that crazy addicted to them), I started using one for gas only.

I didn’t attack the balances I had Dave Ramsey style, though I have to admit I did attack some of the lower rate balances first just because I knew I could get rid of them quickly. It’s crazy how fast credit card debt can disappear when you stop charging like $800+ per month. Suddenly, I had money in my checking account — but I kept sending it off to the credit card companies backing myself up against my buffer. That started in 2003.

Now, hear I am in 2007 with essentially less than $500 remaining in personal credit card debt. The fear of not being able to dig out (of ANY hole) is subsiding. Now it’s just a few months off, I hope, and I’ll hit the “satisfaction” point. I’m excited.

Back to the point, “Can you really separate money from emotions?” For me… no. I spend with my head, not my heart. But there is still an emotional connection. Even though I still feel I’m in debt (minus the 401k and cars, I am!), I still get a good vibe just from the direction I’m heading and have been heading for 4+ years.

Money can’t “buy” happiness really, but damn, once you figure it out, it makes you feel a lot better all over. Even when you’re still in the hole.

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Of course, we always used a phone with a cord — but that face explains it all!So, this morning in the shower I was remembering back in the 1980’s when crank calling was still considered “innocent” fun. All the cool kids were doing it.

I’d imagine it’s a lot harder to do now with everyone having some sort of Caller ID service these days — and quite honestly, you’d probably be labeled as a terrorist and end up detained in some secret foreign prison for committing such a crime.

Not being “daring” enough, I never actually made a crank call. Actually, I just wasn’t mean enough and we *never* made a call from my house, but I do remember ‘our’ script.

I don’t remember if we made it up (My friend Brian would get credit), or he heard it somewhere, but it generally went like this:

“Hello?”
“Um. Hi. Your dog is in my back yard.”
“Excuse me?”
“Yes, your dog is in my back yard.”
“We don’t have a dog.”
“I don’t have a back yard!”
click.

Some real high brow humor there.

Still, to this day, or maybe *just* today, it cracks me up.

I remember in the instance that the person did have a dog — we never had an alternate ending prepared. We still said, “I don’t have a backyard,” which is so ridiculous in hindsight, it almost makes it funnier. Am I alone in the room?

Anyway, I think it’s sad that this specific form of youth mischief has disappeared from society. Think of how huge it could be with all of these little kids sporting their own cell phones these days!

But nowadays, I guess kids get their kicks by spray painting swastikas on random cars. My, how far society has come… or fallen.

I miss the days of the innocent prank call.

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fin_2007may15.gif

Ouch.

Ouch. Sorry, had to say it again.

This time I’ve highlighted the negatives.The largest loss was due to the accident I was in this past weekend. I still haven’t heard yet if my insurance company considers it totalled, but until then, I’ll consider it a total loss.

Also relating to the accident, having to put a rental car on plastic, even just to get home, threw that all off track as well. In the coming week, I’ll also be taking a cash hit as I’ll have to pay my deductable on the insurance policy.

Not looking to be a great month financially.

On the flip side, the balance on the original home improvement loan continues to shrink.

I think we’re still on track to finish it off this month barring any additional unexpected expenses relating to the car accident.

I’m still overpaying the auto loan each month — and thankfully the automobile in the accident was paid for — but it’s not really beneficial as the rate is so low anyway.

Last week I also stepped on to the 0% balance transfer bandwagon. I applied for one of the CitiBank cards that boasts 0% for balance transfers for 12 months with no transfer fees.

Unfortunately they only gave me an insultingly low limit of $6800. I was hoping for more, and expecting more, but I guess it’s probably a better thing that it’s not a lot of money being tossed around on my first go around.

Right now, we’re thinking to just use $6000 of it and drop it into an ING Account until we’re ready to tackle phase two of our home renovation.

That way, we’ll have over $10k available in savings and some additional cash from my wife’s side to pay for the work. (I don’t include her finances in these reports as we don’t have any joint accounts, and, if we can manage to survive and gain wealth on just my income, well, the money she brings in is just a total bonus!)

When it comes time to pay back the roughly $5k balance on the 0% transfer twelve months from now, I’m confident we’ll have saved up enough to pay it off entirely and not have to pay a dime in finance charges.

We won’t make any money on the transfer like some people do, but it will give us the funds NOW and at no cost — which is exactly what we need.

Another scenario would be to pay down the credit card debt I’m carrying, but I’m reluctant to do that as it’s not reported on my credit report.

I own my own company and $7k of the credit card debt is on the company card.

My personal credit cards are used for gas, to pay the home internet bill, and the monthly fee for a storage unit I rent… oh, and unexpected car rentals! How could I forget those?

Can You Dig It?

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