It’s only gets worse - underwater mortgage update
Federal funds rate at 0 percent?
Why Does College Cost So Much?
Consider that, according to the Bureau of Labor Statistics, in the 20 years from 1985 to 2005 energy costs have risen 108%, Medical costs 251%, and college costs increased 439% — but a college degree is worth it, right? Not necessarily. While having a college degree does open doors, and increase the odds of earning a [...]Previously settled debt letter for bill collectors
How to Save Money with the Cash in Hand Method
Did you know that buying with cash can actually save you money? The old saying, “Money Talks” has never been truer than in today’s economy. Even big name retailers are open to negotiation; their sales are down and more people than ever are buying on credit. The holiday season is coming up and stores are desperate [...]Discover More: 0% APR Balance Transfer Fee Cap Ends October 31st
It looks like the credit crunch continues to trickle down to everything financial, including tightening up in the credit card industry. I have it on good authority that the $75 balance transfer fee cap on the Discover More card will end on October 31st.
Why care? The Discover More Card is just about the last credit card with a 0% APR balance transfer for 12 months, as well as a $75 balance transfer fee cap. This is important because you may have noticed that nearly all other 0% APR cards have an uncapped 3% fee. So if you transferred $10,000, the fee would be $300. On a $20,000 balance, that’d be $600!. The cap saves you lots of money, and these offers have only gotten more scarce with time.
Getting Your Money
You can usually request a balance transfer to be sent directly to a card with a balance on it. (Or you could send it to a Citibank card without a balance on it, and request a refund check.) However, a reader wrote in last week to say that you can also call them up afterward and request a balance transfer check to be sent to you directly from Discover. You’ll still get the 0% APR until November 2009 and the $75 fee cap.
In addition, the card has a 5% cashback bonus program on a rotating spending category - for October to December 2008 it is grocery stores, restaurants, and movies. From July to September, it was gas and hotels. So it has the potential to be useful even after the 0% promo period.
More Options
There are few different flavors of the Discover More card if you’re looking to apply for a second one. Check out the Discover More Sealife edition, Discover More Wildlife edition, and the Discover More American Flag edition.
If you’ve been thinking about applying but putting it off, now would be the time to do it!
Got Enough To Retire? Frugal Spenders Just Might
In a CNN Money article titled “Got enough to retire? Think again“, I actually found the opposite.
The main point of the article is that you may need to replace a lot more than just 70-80% of your pre-retirement income after you stop working.
Here’s the chart of average replacement rates from an Aon study:
However, I am agreeing with the authors of Spend Til The End on this one - using replacement rates and averages for this sort of thing is dangerous. One should always look at their own unique situation. It’s you, isn’t it? For example, I don’t see why a household earning $100k or even $500k a year can’t get by on spending $40k per year, especially if their mortgage is paid off.
But after looking at the chart some more, something else caught my eye.
Let’s just say that your spending in retirement requires income of $40,000 per year. This is the same as assumed for a household earning $50,000 pre-retirement according to the study. Even though we earn more than that, I know that we can easily run on $40k per year outside of housing costs.
The graphic suggest that 50% of that, or $25,000 per year, will be covered by Social Security. That only leaves $15,000 per year to be covered by your pension or investment portfolio. Assuming no pension and a 4% withdrawal rate, that means you would need a nest egg of $375,000 in today’s dollars. That is much less than the multi-million dollar figures usually being thrown around.
Now, how much would you need to save to get that $375k? If you save $5,000 inflation-adjusted dollars per year, and they earn a 4% annual real (above inflation) return, every year for 35 years - you’d end up with a little over $380,000. In essence, you’d just have to max out your Roth IRA each year and call it a day. (The contribution limit is $5,000 this year, but the cap rises with inflation.)
Of course, this is all rough numbers and you’ll still have to work until the full Social Security retirement age. Most young people like myself are skeptical of Social Security, but I have come to believe that SS will be with us for a long time - it is just too critical a piece of the retirement puzzle for much of America. And hey, the solution to any underfunding - as always - is simple: tax the high-income earners more!
Laid Off: Some Things I Learned
The company I worked for up until last Friday had been facing financial challenges for over a year. All of the employees knew that it was only a matter of time before the company resorted to drastic measures. We joked that one day we would arrive to work and find that our keys no longer [...]Roundup: Current ING Direct Bank Account Promotions
ING Direct is running a variety of promotions right now:
$50 for new ING Direct Electric Orange Checking
# Have an existing Orange Savings Account (see below).
# Open your Electric Orange high-yield checking account.
# Use reference code: EM227.
# Activate your Electric Orange MasterCard Debit Card.
# Use your Electric Orange Card to make at least 3 signature-based purchases in the first 45 days after your account has been opened.
# Your $50 bonus will be automatically deposited into your Electric Orange 50 days after your account has been opened.
$20 for existing Electric Orange Checking
From this link, it appears that it is available to all that complete the required actions. Thanks CC.
# You are automatically enrolled.
# Make at least 5 purchases of $10 with your Electric Orange Debit Card.
# The purchases must be displayed on your November statement.
# A $20 bonus will be automatically deposited into your Electric Orange Checking Account by December 15th.
$50 for new ING Direct Business Savings
Via Scampsters of SD.
# Open an account by either calling 1-800-ING-9521 or this link.
# Use reference code: BZ253.
# You cannot withdraw $50 bonus for 30 days. Expires 12/31/08.
# May need to provide proof of business besides EIN (license, DBA, etc.)
$25 for new ING Direct Orange Savings
Sign up through one of these $25 bonus links, must open with at least $250. The bonus should show up immediately after application, but you cannot withdraw it for 30 days.
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