Cashing out Underperforming Investments

This afternoon, I redeemed some of the bonds I’d purchased from TreasuryDirect over the past couple of years — $853.55 worth to be exact.

According to Clark Howard, I jumped on the I-Bond and EE-Bond bandwagon much too late:

Series I-bonds come with two interest rates. The first is a fixed interest rate that stays the same for as long as you own your bond. The fixed rate is set when you buy your bond. The second is the floating rate, which is based on the inflation rate in the country. The government resets that rate each May and November.

Series I-bonds that were purchased from 1998 through October 2001 are the best to have. They earn great rates and should probably be held for a full 30 years. That is because they earn somewhere between 3 percent and 3.6 percent (the fixed rate), plus the current rate of inflation. Right now that total is between 6.15 percent and 6.76 percent. That is the best rate on savings anywhere. Remember that the total interest earned changes each six months and will reset again in May.

If you bought your Series I-bond between November 2001 and October 2002, you are currently earning 5.13 percent. A good deal and worth holding on to for now.

However, those who purchased from November 2002 to the present are earning much lower current rates — between 4.12 percent and 4.72 percent. Remember, the difference is based on when you originally bought your Series I-bond.

And looking at the rates I was earning, well, let’s just say that money would serve me better elsewhere. All of them were under 4%.

I’d have liked to cash out entirely, but I’ve got another 3 months to go until I can redeem the remaining funds (around $615) locked up. When the time comes, you can bet I’ll have a zero balance with the government. They’re just not competitive anymore.

As for what I’ll do with this “found” money, I haven’t made up my mind just yet.

I should throw it all into the ING Direct savings account, but I’m leaning more towards throwing around half of it at debt and the other half to my checking account to give myself more of a cash cushion — something I’ve been missing since the final siding payment cleared.

Posted on October 11th, 2007 at 1:19 pm by Brainy Smurf
Finance, I-Bonds, EE-Bonds | 1 Comment »

Goal for the 4th Quarter

As the siding project over the summer, which is still ongoing, I might add, squashed any chance of me reaching my original financial goal for 2007, I’ve had to scale back my lofty goal, for now anyway, and revisit things.

(I’ll save you the time — the original goal was to reach a net worth of $100k by the end of the year.)

The new goal is to have my Bank of America Business credit card paid off by the end of the year.

As of this morning (when I just made a payment of $600), the balance is $4000 at a 9.9% rate. There are two and a half months remaning in the year — roughly 11 weeks. That works out to about $375 that I have to knock off the balance per week.

Ouch. That sounds a bit worse than I’d originally thought when I starting writing this post.

Nevertheless, I’m going to stick to this goal — while also paying down my other debts aggressively.

It might be a struggle, but hopefully the incoming cash flow gets a kick start now that the hockey team we work for is in season — they are chronically months behind in payments to us. Really, last night, my wife informed me that they owe us in excess of $2k, but that’s a whole other story… and one I don’t really want to get in to…

Posted on October 11th, 2007 at 8:05 am by Brainy Smurf
Finance, Credit Card | 1 Comment »

Goodbye Verizon. Hello savings!

While working a golf tournament today, I came to the conclusion that I wasn’t going to bother keeping my cell number when I make the switch to Virgin Mobile later this week.

When I arrived home, I called Verizon Wireless customer service. Amazingly, only a 2-3 minute hold time and the woman I spoke to, Shawnita, spoke perfect English. Things were going well so far.

I was prepared for a fight — you know, them saying I was breaking my contract or something and that it would cost me $175 to cancel, or maybe they’d pull a fast one and try to keep me by offering me even more minutes. You know, the passive aggressive technique credit card companies use when you activate a card. I hate that.

We went through the “verification” things like my name, address, account number, that sort of thing, and then she asked what she could do for me today.

When I told her I’d just like to cancel the service, she responded with the loaded question, “Well, that’s unfortunate Brainy Smurf, is there a reason why?”

“Um, I just don’t use the phone.”

Silence. I heard a few keystrokes and then she said, “Wow, you really don’t use the phone. Can’t argue with that reason.”

And with that, my Verizon Wireless account is no more.

It was so much easier than I expected.

Posted on October 9th, 2007 at 4:47 pm by Brainy Smurf
Bargains, Cutting Costs, Cell Phone | No Comments »

Going the Pre-Paid Cell Phone Route…

I pulled the trigger this morning after mulling it over all weekend. I’m switching my cell service from Verizon to Virgin Mobile.

I was very tempted to take their most basic phone, the Nokia Shorty, which comes free and with $20 worth of free airtime upon activation, but the old materialistic side of me wanted something that looked a little flashier.

I ended up selecting the red version of the UTstarcom 1400 Slice. It has the options I’d like to have on a phone, you know, like make and receive calls, and more critically, it looks, well, modern? I think that’s why it won out over the Nokia phone. Hey, even one of the reviews on Amazon said hers had been mistaken for one of those LG Chocolate phones… As far as I know, those are expensive.

This way, I get the expensive look without the hefty price tag. Besides, I don’t really know what BlueTooth is, I won’t listen to music on my phone (really, what’s the appeal?), and I’m not really interested in having memory for 1000 different contacts. I’m not sure I even know that many people…

Let’s see… There is Papa Smurf, Smurfette, Jokey, Vanity, Hefty, Baker, Handy, Sleepy, Harmony, and Clumsy… I guess to fill a few extra spots, I could put Gargamel and Azrael’s numbers in there too, but let’s be honest — I’m not actually ever going to call them. Seriously…

Total spent so far is $31.79. I should have the phone later this week at which point I’ll have to activate it. Did I mention that there isn’t a contract either? I’m really upset with myself for delaying this process for so long.

From the way I’m interpreting it, the flat 18 cents per minute plan is what will suit me best, and to keep my phone activated, I need to send in $20 every 3 months. The fine print is kinda tough to understand, but I believe that’s what it boils down to.

It’s unlikely, still, that I’ll use $20 worth of minutes at 18 cents in a 3 month span, but when compared to the $40 per month I’m sending to Verizon currently, this switch will save me over $400 per year.

And for that, I don’t feel so bad about paying $31.79 for the phone.

Posted on October 8th, 2007 at 2:52 pm by Brainy Smurf
Bargains, Cutting Costs, Cell Phone | 2 Comments »

Can You Hear me Now?

After following the Happy Rock’s postings this week regarding Virgin Mobile’s pre-paid cell plans, I’ve decided to follow his lead.

I’ve been a customer of Verizon for nearly a decade now. I’m on my third phone with them. The plan I’ve been grandfathered into is what I’d call an affordable rate these days. It’s just shy of $40/month with all of the taxes rolled in. Certainly within my budget.

Problem is — I’d say in that over the entire decade, I’ve used less than 500 minutes. That’s right. I average less than 5 minutes of airtime per month.

That, my friends, is a waste.

Thanks to the Happy Rock, my eyes are now open to the fact that I’m essentially paying $8 per minute at my current rate?

I always considered having a cell phone, given my daily activities and total lack of usage, to be a waste anyway, but on the freak chance I *needed* to make a call (such as after the accident, the convenience of having one available was worth the monthly bill.

Well, with more attractive alternatives out there, those days are nearing an end.

Posted on October 5th, 2007 at 7:47 pm by Brainy Smurf
Bargains, Cutting Costs, Cell Phone | No Comments »

October 2007: Quest for $1,000,000.00 Dollars

Another month headed in the right direction!

That’s what the numbers say, anyway… I didn’t really *feel* like I made any progress in September.

I mean, I’m the type who usually pays the mortgage nearly a month in advance and I was only able to afford it three days before it was due this past month. I hate cutting it that close.

Obviously, the big jump came from my 401k. Over three quarters of the increase is tied up where I can’t touch it. I’m still *very* cash poor and that’s mostly due to the fact that a number of my clients are behind on their bills. One of these days, my mailbox should have a decent number of checks waiting in it.

Until then, I’ll continue to tread water.

Posted on October 2nd, 2007 at 7:26 am by Brainy Smurf
Finance, Net Worth Updates | No Comments »