Comments for fivecentnickel.com http://www.fivecentnickel.com personal finance tips, tricks, and commentary Mon, 13 Feb 2012 15:56:49 +0000 http://wordpress.org/?v=2.9.2 hourly 1 Comment on Q&A: Using IRA Funds to Pay Off a Student Loan by Favour martins http://www.fivecentnickel.com/2007/09/13/qa-using-ira-funds-to-pay-off-a-student-loan/comment-page-1/#comment-270682 Favour martins Mon, 13 Feb 2012 15:56:49 +0000 http://www.fivecentnickel.com/2007/09/13/qa-using-ira-funds-to-pay-off-a-student-loan/#comment-270682 FINANCIAL SERVICE ANNOUNCEMENT Good Day Sir/Madam: Getting a legitimate loan have always been a huge problem To clients who have financial needs. The issue of credit and collateral are something that clients are always worried about when seeking a loan from a legitimate lender. But FAVOUR FINANCIAL INC... has made that difference in the lending industry. We can arrange for a loan from the range of $5,000. to $500,000.000 Our Services Include the Following: Debt Consolidation Second Mortgage Business Loans Personal Loans International Loans No social security and no credit check, 100% Guarantee. All you have to do is let us know exactly what you want and we will surely make your dream come true. FAVOUR FINANCIAL INC. says YES when your banks say NO. Lastly, we fund small scale loan firm, intermediaries, small scale financial institutions for we have unlimited capital. For further details to go about procuring a loan contact us, Kindly respond immediately to this favourlending234@gmail.com BORROWERS INFORMATION'S: First Name:.... Last Name:..... City:.......... Zip Code:...... State :........... Country:.......... Gender: .......... Date of birth: ... Telephone:........ Marital Status :.. Occupation: ...... Loan Amount:...... Purpose of loan:.. Loan:............... Loan Duration :........ Monthly Income :..... Your international pass sport or drivers license is: Have you applied for loan before (yes or no).. Best Regards FINANCIAL SERVICE ANNOUNCEMENT

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]]> Comment on Stocks are Not Bonds, CDs, or Savings Accounts by Nickel http://www.fivecentnickel.com/2012/02/10/stocks-are-not-bonds-cds-or-savings-accounts/comment-page-1/#comment-270662 Nickel Mon, 13 Feb 2012 01:36:47 +0000 http://www.fivecentnickel.com/?p=25872#comment-270662 Peter: I have no problem with the stock market in general, or with dividend stocks in particular. BUT... If you're using them in place of cash, you're making a big mistake. The primary reason for holding cash is that you might need to access it in a pinch. So if you toss that your cash into the market in search of a marginally higher yield, you're exposing yourself to tremendous market risk, and you may wind up being forced to sell at just the wrong moment. In short, negative real returns are (imho) a necessary evil for money that you need access to in the near term. What I was railing against in this article was that dividend stocks are a reasonable alternative to a bank account for your cash needs. I've seen this argument made more than once, and it's simply wrong-headed (again, imho). Peter: I have no problem with the stock market in general, or with dividend stocks in particular. BUT… If you’re using them in place of cash, you’re making a big mistake. The primary reason for holding cash is that you might need to access it in a pinch. So if you toss that your cash into the market in search of a marginally higher yield, you’re exposing yourself to tremendous market risk, and you may wind up being forced to sell at just the wrong moment.

In short, negative real returns are (imho) a necessary evil for money that you need access to in the near term. What I was railing against in this article was that dividend stocks are a reasonable alternative to a bank account for your cash needs. I’ve seen this argument made more than once, and it’s simply wrong-headed (again, imho).

]]> Comment on Stocks are Not Bonds, CDs, or Savings Accounts by Peter http://www.fivecentnickel.com/2012/02/10/stocks-are-not-bonds-cds-or-savings-accounts/comment-page-1/#comment-270652 Peter Sun, 12 Feb 2012 21:25:40 +0000 http://www.fivecentnickel.com/?p=25872#comment-270652 I followed the link in your example - S&P Dividend ETF (SDY) - to see what the income stream from this looked like over the period of the big loss in asset value (2007 to 2009). I expanded the chart out to the last 5 years and last 10 years, and it seemed to me that, if I was depending on this investment as a source of income, it isn't that bad. Sure, the paper loss would have been gut-wrenching, but that too has recovered significantly. And the annual income seems better than I see from so-called safe investments like Treasury bills, money-market accounts and the like. I don't imagine 1- to 2-year CDs have had yields better than the inflation rate - yes, that means negative returns in real terms. The quarterly dividends do vary - generally in the range 30 to 60 cents, with the following two exceptions: 2007 Q4 dividend was $1.38 and 2009 Q1 dividend was 0. Could you provide some insight into what caused these two significant deviations. I'd say that income from this kind of investment isn't as steady as salary from a steady job, but it's probably less volatile than typical income for people like farmers, fishermen, and snow-removal guys. I followed the link in your example – S&P Dividend ETF (SDY) – to see what the income stream from this looked like over the period of the big loss in asset value (2007 to 2009). I expanded the chart out to the last 5 years and last 10 years, and it seemed to me that, if I was depending on this investment as a source of income, it isn’t that bad. Sure, the paper loss would have been gut-wrenching, but that too has recovered significantly. And the annual income seems better than I see from so-called safe investments like Treasury bills, money-market accounts and the like. I don’t imagine 1- to 2-year CDs have had yields better than the inflation rate – yes, that means negative returns in real terms.

The quarterly dividends do vary – generally in the range 30 to 60 cents, with the following two exceptions:
2007 Q4 dividend was $1.38 and 2009 Q1 dividend was 0. Could you provide some insight into what caused these two significant deviations.

I’d say that income from this kind of investment isn’t as steady as salary from a steady job, but it’s probably less volatile than typical income for people like farmers, fishermen, and snow-removal guys.

]]> Comment on Why Doesn’t Sam’s Club Accept Visa Credit Cards? by Matt http://www.fivecentnickel.com/2010/03/31/why-doesnt-sams-club-accept-visa-credit-cards/comment-page-1/#comment-270642 Matt Sun, 12 Feb 2012 14:19:21 +0000 http://www.fivecentnickel.com/?p=5501#comment-270642 Sams Club just lost another customer. My membership expires the end of this month and I won't be renewing it. I have a credit card that's Visa, and a Visa debit card at a local credit union that'll only work when run as a credit card. So, the $300-400 a year I spent there for the last 2 years will go somewhere else. Sams Club just lost another customer. My membership expires the end of this month and I won’t be renewing it. I have a credit card that’s Visa, and a Visa debit card at a local credit union that’ll only work when run as a credit card. So, the $300-400 a year I spent there for the last 2 years will go somewhere else.

]]> Comment on Five Myths About Renter’s Insurance by Sterling http://www.fivecentnickel.com/2012/02/09/five-myths-about-renters-insurance/comment-page-1/#comment-270572 Sterling Sat, 11 Feb 2012 22:37:34 +0000 http://www.fivecentnickel.com/?p=25842#comment-270572 Great advice. In my insurance selling days at State Farm, I would always encourage renters insurance. First, the savings from having multiple lines of insurance often allowed the coverage to pay for itself! Second, insurance companies like having multiple relationships with their customers for long periods of time. Converting this policy to a homeowners policy later may payoff at various companies when they examine how long you have been a customer. Very good advice indeed! Great advice. In my insurance selling days at State Farm, I would always encourage renters insurance. First, the savings from having multiple lines of insurance often allowed the coverage to pay for itself! Second, insurance companies like having multiple relationships with their customers for long periods of time. Converting this policy to a homeowners policy later may payoff at various companies when they examine how long you have been a customer. Very good advice indeed!

]]> Comment on Double-Check Your Ally CDs by Courtney http://www.fivecentnickel.com/2012/02/10/double-check-your-ally-cds/comment-page-1/#comment-270552 Courtney Sat, 11 Feb 2012 17:51:43 +0000 http://www.fivecentnickel.com/?p=25882#comment-270552 Nickel - that's interesting, I would have assumed that it still would have been paid out at the annual anniversary rather than a fixed date. Seems like it would slightly affect the compounding for the first and last years? Or would it balance out in the end? Nickel – that’s interesting, I would have assumed that it still would have been paid out at the annual anniversary rather than a fixed date. Seems like it would slightly affect the compounding for the first and last years? Or would it balance out in the end?

]]> Comment on Double-Check Your Ally CDs by Nickel http://www.fivecentnickel.com/2012/02/10/double-check-your-ally-cds/comment-page-1/#comment-270542 Nickel Sat, 11 Feb 2012 15:20:51 +0000 http://www.fivecentnickel.com/?p=25882#comment-270542 BG: I agree, and it's important to keep in mind that much of the info surrounding this is rumor and innuendo. Apparently some people have had problems, and at least one says they have been told by an Ally service that it will be handled on a case-by-case basis. It's quite possible that they'll go through and systematically correct any problems. But it's better to be safe than sorry. BG: I agree, and it’s important to keep in mind that much of the info surrounding this is rumor and innuendo. Apparently some people have had problems, and at least one says they have been told by an Ally service that it will be handled on a case-by-case basis. It’s quite possible that they’ll go through and systematically correct any problems. But it’s better to be safe than sorry.

]]> Comment on Double-Check Your Ally CDs by Nickel http://www.fivecentnickel.com/2012/02/10/double-check-your-ally-cds/comment-page-1/#comment-270532 Nickel Sat, 11 Feb 2012 15:19:07 +0000 http://www.fivecentnickel.com/?p=25882#comment-270532 Courtney: Yes, if a CD matured during the year, the final interest would have been paid out at that point, but I believe that for ongoing CDs, the interest is posted on 12/31 -- or at least that's the way it works for us. Courtney: Yes, if a CD matured during the year, the final interest would have been paid out at that point, but I believe that for ongoing CDs, the interest is posted on 12/31 — or at least that’s the way it works for us.

]]> Comment on Stocks are Not Bonds, CDs, or Savings Accounts by BG http://www.fivecentnickel.com/2012/02/10/stocks-are-not-bonds-cds-or-savings-accounts/comment-page-1/#comment-270522 BG Sat, 11 Feb 2012 13:38:11 +0000 http://www.fivecentnickel.com/?p=25872#comment-270522 Bonds represent a contractual obligation of the borrower to pay you back, with a known (up front) ROR. The risks are the borrower goes bankrupt (which wipes out the shareholders before the bond holders), and the unknown future inflation rate. CDs are normally FDIC insured (to certain limits) - practically risk free (hence pay less interest than bonds). Stocks, the riskiest if the three, represent your part ownership of a company. You theoretically (part) own the assets, profits, and are on hook for the liabilities (debts/bonds) -- worst case, you lose 100% of your investment, otherwise the gains are unlimited. Some companies will pay a dividend (out of profits after paying the CEO/executives millions), so you make money that way. Otherwise you make money as a shareholder buy selling your shares to someone else for a higher price than you purchased at (bigger sucker). Bonds represent a contractual obligation of the borrower to pay you back, with a known (up front) ROR. The risks are the borrower goes bankrupt (which wipes out the shareholders before the bond holders), and the unknown future inflation rate.

CDs are normally FDIC insured (to certain limits) – practically risk free (hence pay less interest than bonds).

Stocks, the riskiest if the three, represent your part ownership of a company. You theoretically (part) own the assets, profits, and are on hook for the liabilities (debts/bonds) — worst case, you lose 100% of your investment, otherwise the gains are unlimited. Some companies will pay a dividend (out of profits after paying the CEO/executives millions), so you make money that way. Otherwise you make money as a shareholder buy selling your shares to someone else for a higher price than you purchased at (bigger sucker).

]]> Comment on Double-Check Your Ally CDs by BG http://www.fivecentnickel.com/2012/02/10/double-check-your-ally-cds/comment-page-1/#comment-270512 BG Sat, 11 Feb 2012 13:19:49 +0000 http://www.fivecentnickel.com/?p=25882#comment-270512 I still haven't received my 1099s from Ally yet, guess I need to call their customer service line (benefit of the doubt, it just got lost in the mail). But not paying CD dividends, that is messed up. Last year I had Chase not credit one of my automatic payday deposits into the HSA account. Chase conducted an investigation and realized the same was true for everyone in my company (so fixed the problem for everyone). I expect no less from Ally. If there is a glitch, they need to find it and fix all accounts affected. If there were a glitch that was not in their favor, do you think they would wait for every affected (honest) customer to call? I still haven’t received my 1099s from Ally yet, guess I need to call their customer service line (benefit of the doubt, it just got lost in the mail). But not paying CD dividends, that is messed up. Last year I had Chase not credit one of my automatic payday deposits into the HSA account. Chase conducted an investigation and realized the same was true for everyone in my company (so fixed the problem for everyone).

I expect no less from Ally. If there is a glitch, they need to find it and fix all accounts affected. If there were a glitch that was not in their favor, do you think they would wait for every affected (honest) customer to call?

]]> Comment on Stocks are Not Bonds, CDs, or Savings Accounts by Investor Junkie http://www.fivecentnickel.com/2012/02/10/stocks-are-not-bonds-cds-or-savings-accounts/comment-page-1/#comment-270482 Investor Junkie Sat, 11 Feb 2012 00:50:29 +0000 http://www.fivecentnickel.com/?p=25872#comment-270482 No stocks are certainly NOT bonds. There is no such thing as a risk free investment. All investments have risk. Some aren't as obvious as others. Right now it's damned if you do, damned if you don't. Get a 5 Year CD that earns less than 2% APR, which is the targeted (but currently much higher) inflation rate the FED has set, or invest in higher risk bonds and stocks with dividends? Let's not forget if/when the rates do rise what will happen to mutual fund bond shares. Bond holders can get burned in a massive way. So either lose with real negative interest rates for any government issued bond, or CD, or choose many dividend stocks that have had a history of increasing their dividends for over thirty years (dividend aristocrats) and pay more than 3%? Unfortunately most dividend paying investments are expensive right now because of this multi-year 0% FED rate. Here are your options all are a crowed trade right now: - Corporate bonds - High Yield bonds - Muni bonds - Foreign bonds - Dividend stocks - REITs - MLPs - P2P Lending (new to the game) At least in my opinion the lesser evils to add new monies to are: muni bonds, REITs and dividend stocks. No stocks are certainly NOT bonds. There is no such thing as a risk free investment. All investments have risk. Some aren’t as obvious as others.

Right now it’s damned if you do, damned if you don’t. Get a 5 Year CD that earns less than 2% APR, which is the targeted (but currently much higher) inflation rate the FED has set, or invest in higher risk bonds and stocks with dividends?

Let’s not forget if/when the rates do rise what will happen to mutual fund bond shares. Bond holders can get burned in a massive way.

So either lose with real negative interest rates for any government issued bond, or CD, or choose many dividend stocks that have had a history of increasing their dividends for over thirty years (dividend aristocrats) and pay more than 3%?

Unfortunately most dividend paying investments are expensive right now because of this multi-year 0% FED rate.

Here are your options all are a crowed trade right now:
- Corporate bonds
- High Yield bonds
- Muni bonds
- Foreign bonds
- Dividend stocks
- REITs
- MLPs
- P2P Lending (new to the game)

At least in my opinion the lesser evils to add new monies to are: muni bonds, REITs and dividend stocks.

]]> Comment on Five Myths About Renter’s Insurance by J M http://www.fivecentnickel.com/2012/02/09/five-myths-about-renters-insurance/comment-page-1/#comment-270472 J M Fri, 10 Feb 2012 23:33:10 +0000 http://www.fivecentnickel.com/?p=25842#comment-270472 I added renters insurance last year after my building burned down, destroying 12/14 apartments and everything inside. I was lucky enough to have one of the two units spared by the fire. The total policy cost me $150/yr with more than enough coverage. My roommates car got broken into recently and his renters insurance covered the loss. I added renters insurance last year after my building burned down, destroying 12/14 apartments and everything inside. I was lucky enough to have one of the two units spared by the fire. The total policy cost me $150/yr with more than enough coverage. My roommates car got broken into recently and his renters insurance covered the loss.

]]> Comment on Double-Check Your Ally CDs by Courtney http://www.fivecentnickel.com/2012/02/10/double-check-your-ally-cds/comment-page-1/#comment-270462 Courtney Fri, 10 Feb 2012 23:06:03 +0000 http://www.fivecentnickel.com/?p=25882#comment-270462 "It helps that all payments are issued on 12/31" I guess you have long term CDs? We have 6 and 11 month CDs, and interest payments are issued at the CD maturity, so it's going to depend on when you first purchased the CD. Ours are all around mid-month (the 8-13th). Anyway, I checked all 8 of our CDs and don't see anything missing. “It helps that all payments are issued on 12/31″ I guess you have long term CDs? We have 6 and 11 month CDs, and interest payments are issued at the CD maturity, so it’s going to depend on when you first purchased the CD. Ours are all around mid-month (the 8-13th).

Anyway, I checked all 8 of our CDs and don’t see anything missing.

]]> Comment on The Best Values in Colleges – 2012 Edition by jim http://www.fivecentnickel.com/2012/02/09/the-best-values-in-colleges-2012-edition/comment-page-1/#comment-270452 jim Fri, 10 Feb 2012 22:36:15 +0000 http://www.fivecentnickel.com/?p=25782#comment-270452 I wonder if the public school rankings are based on out of state tuition rates or in state? It would seem to me that your in state school is generally a much better bargain as far as price compared to paying out of state tuition rates. I wonder if the public school rankings are based on out of state tuition rates or in state? It would seem to me that your in state school is generally a much better bargain as far as price compared to paying out of state tuition rates.

]]> Comment on Stocks are Not Bonds, CDs, or Savings Accounts by yourPFpro http://www.fivecentnickel.com/2012/02/10/stocks-are-not-bonds-cds-or-savings-accounts/comment-page-1/#comment-270432 yourPFpro Fri, 10 Feb 2012 21:30:54 +0000 http://www.fivecentnickel.com/?p=25872#comment-270432 There is definitely risk to holding dividend stocks. I think they are a reasonable investment class though for a 5 year period. I don't think you will see as much fluctuation between the solid dividend producing stocks like ATT & 3M when compared with tech stocks like Pandora or Facebook... There is definitely risk to holding dividend stocks. I think they are a reasonable investment class though for a 5 year period. I don’t think you will see as much fluctuation between the solid dividend producing stocks like ATT & 3M when compared with tech stocks like Pandora or Facebook…

]]> Comment on Double-Check Your Ally CDs by Nickel http://www.fivecentnickel.com/2012/02/10/double-check-your-ally-cds/comment-page-1/#comment-270422 Nickel Fri, 10 Feb 2012 20:29:56 +0000 http://www.fivecentnickel.com/?p=25882#comment-270422 You may need to check them individually. I have a bunch, too, but the majority are "parallel" CDs that I set up for the same term and amount on the same date. Since they all have identical values, I only needed to check one to be sure that the value reflected the 2011 interest. It helps that all payments are issued on 12/31, though you have to manually enter a date range to view that since it's more than 30 days ago. You may need to check them individually. I have a bunch, too, but the majority are “parallel” CDs that I set up for the same term and amount on the same date. Since they all have identical values, I only needed to check one to be sure that the value reflected the 2011 interest. It helps that all payments are issued on 12/31, though you have to manually enter a date range to view that since it’s more than 30 days ago.

]]> Comment on Why Doesn’t Sam’s Club Accept Visa Credit Cards? by Brandon http://www.fivecentnickel.com/2010/03/31/why-doesnt-sams-club-accept-visa-credit-cards/comment-page-1/#comment-270412 Brandon Fri, 10 Feb 2012 19:47:42 +0000 http://www.fivecentnickel.com/?p=5501#comment-270412 I know members can run there visa debit as a credit I dont agree with us not taking visa either we lose a lot of business because of this I just hate fact that members think that us cashiers make the rules. Dont yell at me call corporate and talk to them about. I know members can run there visa debit as a credit I dont agree with us not taking visa either we lose a lot of business because of this I just hate fact that members think that us cashiers make the rules. Dont yell at me call corporate and talk to them about.

]]> Comment on Double-Check Your Ally CDs by SD http://www.fivecentnickel.com/2012/02/10/double-check-your-ally-cds/comment-page-1/#comment-270402 SD Fri, 10 Feb 2012 19:43:01 +0000 http://www.fivecentnickel.com/?p=25882#comment-270402 Hi, How did you check all CDs? I have 30 CDs and they deposit interest at the year end so how will i come to know whether they have missed any months interest SD Hi,

How did you check all CDs? I have 30 CDs and they deposit interest at the year end so how will i come to know whether they have missed any months interest

SD

]]> Comment on Reverse ABA Routing Number Lookup by Mitch http://www.fivecentnickel.com/2006/03/28/reverse-aba-routing-number-lookup/comment-page-1/#comment-270382 Mitch Fri, 10 Feb 2012 17:43:05 +0000 http://www.fivecentnickel.com/2006/03/28/reverse-aba-routing-number-lookup/#comment-270382 Where do I input a routing number to find bank location on this site? Where do I input a routing number to find bank location on this site?

]]> Comment on Why Doesn’t Sam’s Club Accept Visa Credit Cards? by Cashier@Sams http://www.fivecentnickel.com/2010/03/31/why-doesnt-sams-club-accept-visa-credit-cards/comment-page-1/#comment-270372 Cashier@Sams Fri, 10 Feb 2012 17:37:37 +0000 http://www.fivecentnickel.com/?p=5501#comment-270372 What a lot of cashiers do not know is that you can use a Visa card, ONLY if the card specifically says "Debit" on the card. You can use it as a debit/PIN transaction, OR if you choose to run it as credit, simply press cancel and select credit. Sam's Club does not accept Visa CREDIT cards, however it does accept Visa DEBIT cards ran as a credit or debit. I know this because I am/was a trained cashier. At the Sam's Club I work/worked at, cashiers were not trained to know why we do not accept Visa Credit cards, just that we don't accept them. (Cashiers often mistake this as Sam's Club does not accept any Visa card whatsoever. That's not the case!!) I politely explain to the member/customers that we cannot run the Visa Credit card, but we are more than happy to accept Discover, Mastercard, and ALL debit cards. This includes Visa debit cards to be ran as credit. Now with that said, as a cashier it hurts me personally being yelled at by members because of something I did not do. I never came up with the rules, I just have to abide by them. Why do customers yell at me when I'm trying to explain a policy that not even I agree with? :( What a lot of cashiers do not know is that you can use a Visa card, ONLY if the card specifically says “Debit” on the card. You can use it as a debit/PIN transaction, OR if you choose to run it as credit, simply press cancel and select credit. Sam’s Club does not accept Visa CREDIT cards, however it does accept Visa DEBIT cards ran as a credit or debit.

I know this because I am/was a trained cashier. At the Sam’s Club I work/worked at, cashiers were not trained to know why we do not accept Visa Credit cards, just that we don’t accept them. (Cashiers often mistake this as Sam’s Club does not accept any Visa card whatsoever. That’s not the case!!)

I politely explain to the member/customers that we cannot run the Visa Credit card, but we are more than happy to accept Discover, Mastercard, and ALL debit cards. This includes Visa debit cards to be ran as credit.

Now with that said, as a cashier it hurts me personally being yelled at by members because of something I did not do. I never came up with the rules, I just have to abide by them. Why do customers yell at me when I’m trying to explain a policy that not even I agree with?
:(

]]> Comment on Own Your Investments, Rent Your Fun by cashflowmantra http://www.fivecentnickel.com/2012/02/08/own-your-investments-rent-your-fun/comment-page-1/#comment-270362 cashflowmantra Fri, 10 Feb 2012 17:17:59 +0000 http://www.fivecentnickel.com/?p=25832#comment-270362 I like it. I have never heard it expressed this way before, but I believe in the same thing. Now I have a catchy little saying to go with it. I like it. I have never heard it expressed this way before, but I believe in the same thing. Now I have a catchy little saying to go with it.

]]> Comment on Five Myths About Renter’s Insurance by Long http://www.fivecentnickel.com/2012/02/09/five-myths-about-renters-insurance/comment-page-1/#comment-270352 Long Fri, 10 Feb 2012 15:35:58 +0000 http://www.fivecentnickel.com/?p=25842#comment-270352 Renters insurance is also important because it covers the belongings in your car. Auto insurance does not cover possessions in your vehicle that are lost as a result of theft or damage. Renters insurance is also important because it covers the belongings in your car. Auto insurance does not cover possessions in your vehicle that are lost as a result of theft or damage.

]]> Comment on Missing Tax Paperwork? by Jason http://www.fivecentnickel.com/2012/02/03/missing-tax-paperwork/comment-page-1/#comment-270342 Jason Fri, 10 Feb 2012 14:35:57 +0000 http://www.fivecentnickel.com/?p=25622#comment-270342 Regarding the post about the 1099-K, I also received one as I sell a lot on Amazon. It is my understanding that the latest 2011 Instructions for Schedule C instruct us to ignore the figure from the 1099-K and enter 0 on line 1a, due to the confusion that this form has created. All gross income should be added on line 1b and determined the same way as years past. Regarding the post about the 1099-K, I also received one as I sell a lot on Amazon. It is my understanding that the latest 2011 Instructions for Schedule C instruct us to ignore the figure from the 1099-K and enter 0 on line 1a, due to the confusion that this form has created. All gross income should be added on line 1b and determined the same way as years past.

]]> Comment on An Extreme Early Mortgage Payoff Story by John C http://www.fivecentnickel.com/2011/09/02/an-extreme-early-mortgage-payoff-story/comment-page-2/#comment-270332 John C Fri, 10 Feb 2012 14:24:05 +0000 http://www.fivecentnickel.com/?p=20572#comment-270332 Just paid off $338k mortgage 1.5 weeks ago. Of course market takes off right after I did this, but have no regrets. Best comment I've heard for analysis - if you had no mortgage, would you take out equity loan and throw it into the market? I doubt it. There's so many people out there in their 50s and 60s still with a mortgage and sweating it - not worth it. I'm 35, had the benefit of killing it for a couple years in the real estate boom (consulting background) but now income's leveled off and likely won't hit those peaks again for quite a while. Still have a comfortable cash cushion for immediate needs and investment opportunities as they arise (I prefer foreclosure properties for $100k or less, then renting out at $1500/month - pretty easy calculation, slow way to get rich). I live in NH. One thing I would say - don't pay off your house if you think there's a possibility of neighborhood/town/city going to crap (ie Detroit). Good luck with your decision(s). Just paid off $338k mortgage 1.5 weeks ago. Of course market takes off right after I did this, but have no regrets. Best comment I’ve heard for analysis – if you had no mortgage, would you take out equity loan and throw it into the market? I doubt it. There’s so many people out there in their 50s and 60s still with a mortgage and sweating it – not worth it. I’m 35, had the benefit of killing it for a couple years in the real estate boom (consulting background) but now income’s leveled off and likely won’t hit those peaks again for quite a while. Still have a comfortable cash cushion for immediate needs and investment opportunities as they arise (I prefer foreclosure properties for $100k or less, then renting out at $1500/month – pretty easy calculation, slow way to get rich). I live in NH. One thing I would say – don’t pay off your house if you think there’s a possibility of neighborhood/town/city going to crap (ie Detroit). Good luck with your decision(s).

]]> Comment on The Best Values in Colleges – 2012 Edition by The Biz of Life http://www.fivecentnickel.com/2012/02/09/the-best-values-in-colleges-2012-edition/comment-page-1/#comment-270322 The Biz of Life Fri, 10 Feb 2012 13:32:39 +0000 http://www.fivecentnickel.com/?p=25782#comment-270322 I'm a UVa grad, definitely a great school. Not so sure UNC should be #1 though :-). Anyone lucky enough to live in Virginia has an incredible selection of state schools to choose from. I think the same goes for NC also. I’m a UVa grad, definitely a great school. Not so sure UNC should be #1 though :-) . Anyone lucky enough to live in Virginia has an incredible selection of state schools to choose from. I think the same goes for NC also.

]]> Comment on Five Myths About Renter’s Insurance by Devin http://www.fivecentnickel.com/2012/02/09/five-myths-about-renters-insurance/comment-page-1/#comment-270312 Devin Fri, 10 Feb 2012 12:01:50 +0000 http://www.fivecentnickel.com/?p=25842#comment-270312 There is a reason why Insurance Companies are big and rich and it isn't because they are looking out for you. There is a reason why Insurance Companies are big and rich and it isn’t because they are looking out for you.

]]> Comment on Five Myths About Renter’s Insurance by Lorin http://www.fivecentnickel.com/2012/02/09/five-myths-about-renters-insurance/comment-page-1/#comment-270212 Lorin Fri, 10 Feb 2012 04:25:21 +0000 http://www.fivecentnickel.com/?p=25842#comment-270212 I never had it as a renter (too lazy) but now that I'm a landlord we require it. We just added it onto our policy and our tenant pays the extra $10/month in her rent. Very easy to do. I never had it as a renter (too lazy) but now that I’m a landlord we require it. We just added it onto our policy and our tenant pays the extra $10/month in her rent. Very easy to do.

]]> Comment on Five Myths About Renter’s Insurance by photomiser http://www.fivecentnickel.com/2012/02/09/five-myths-about-renters-insurance/comment-page-1/#comment-270202 photomiser Fri, 10 Feb 2012 03:12:42 +0000 http://www.fivecentnickel.com/?p=25842#comment-270202 We had renters insurance for the eight years we rented. Never made a claim, but I'm OK with that. If you otherwise have the cash to cover your losses, then you would not necessarily need it. But many people who rent are young and starting out, without much savings, so a loss could set them back significantly. With any insurance product, though, I'd recommend as high a deductible as you think you can handle. It should be for disasters, not nuisances. We had renters insurance for the eight years we rented. Never made a claim, but I’m OK with that. If you otherwise have the cash to cover your losses, then you would not necessarily need it. But many people who rent are young and starting out, without much savings, so a loss could set them back significantly. With any insurance product, though, I’d recommend as high a deductible as you think you can handle. It should be for disasters, not nuisances.

]]> Comment on Is Your Investment Allocation Right? by Evan http://www.fivecentnickel.com/2012/02/03/is-your-investment-allocation-right/comment-page-1/#comment-270172 Evan Fri, 10 Feb 2012 00:37:46 +0000 http://www.fivecentnickel.com/?p=25552#comment-270172 I would keep my current dividend investment portfolio exactly the same, but I have a random trading account that I would get rid. I don't know if it is inertia as much as there is no real need, the companies are eh, and I have an ok profit on some and underwater on others. I would keep my current dividend investment portfolio exactly the same, but I have a random trading account that I would get rid. I don’t know if it is inertia as much as there is no real need, the companies are eh, and I have an ok profit on some and underwater on others.

]]> Comment on The Best Values in Colleges – 2012 Edition by Newlyfrugal http://www.fivecentnickel.com/2012/02/09/the-best-values-in-colleges-2012-edition/comment-page-1/#comment-270162 Newlyfrugal Fri, 10 Feb 2012 00:01:16 +0000 http://www.fivecentnickel.com/?p=25782#comment-270162 My spouse and I both earned bachelor's and graduate degrees at a state college which is not on the list. Due to our chosen majors, we both earn well over six figures. So going to a more expensive school was not necessary for us. My spouse and I both earned bachelor’s and graduate degrees at a state college which is not on the list. Due to our chosen majors, we both earn well over six figures. So going to a more expensive school was not necessary for us.

]]> Comment on Ethanol Blended Gas = Lower Mileage? by Edh http://www.fivecentnickel.com/2006/06/01/ethanol-blended-gas-lower-mileage/comment-page-5/#comment-270142 Edh Thu, 09 Feb 2012 23:26:39 +0000 http://www.fivecentnickel.com/2006/06/01/ethanol-blended-gas-lower-mileage/#comment-270142 I didn't think the subsidy would ever go away. Surprised I didn't know about it till now. http://www.nytimes.com/2012/01/02/business/energy-environment/after-three-decades-federal-tax-credit-for-ethanol-expires.html I didn’t think the subsidy would ever go away. Surprised I didn’t know about it till now.

http://www.nytimes.com/2012/01.....pires.html

]]> Comment on The Best Values in Colleges – 2012 Edition by PFM http://www.fivecentnickel.com/2012/02/09/the-best-values-in-colleges-2012-edition/comment-page-1/#comment-270092 PFM Thu, 09 Feb 2012 20:47:49 +0000 http://www.fivecentnickel.com/?p=25782#comment-270092 ugh, unfortunately I have college costs coming up soon, but I do agree with Nick, value is important, so is the "college experience". I don't usually give much weight to these lists and only glance at them to see if my alma mater is listed, the good thing about this list though is UNC, it's 30 minutes from my house ;) ugh, unfortunately I have college costs coming up soon, but I do agree with Nick, value is important, so is the “college experience”. I don’t usually give much weight to these lists and only glance at them to see if my alma mater is listed, the good thing about this list though is UNC, it’s 30 minutes from my house ;)

]]> Comment on The Best Values in Colleges – 2012 Edition by yourPFpro http://www.fivecentnickel.com/2012/02/09/the-best-values-in-colleges-2012-edition/comment-page-1/#comment-270082 yourPFpro Thu, 09 Feb 2012 20:46:25 +0000 http://www.fivecentnickel.com/?p=25782#comment-270082 Is a poli sci degree from Princeton worth anymore than one from a SUNY school? I wonder.. Is a poli sci degree from Princeton worth anymore than one from a SUNY school? I wonder..

]]> Comment on Five Myths About Renter’s Insurance by yourPFpro http://www.fivecentnickel.com/2012/02/09/five-myths-about-renters-insurance/comment-page-1/#comment-270072 yourPFpro Thu, 09 Feb 2012 20:44:09 +0000 http://www.fivecentnickel.com/?p=25842#comment-270072 I'm not a huge fan of insurance in general. My motto is sh*t happens.. I understand how buying insurance can make someone feel secure. However, I know for a fact, the insurance companies are able to offer such low rates on renter's insurance because claims occur so infrequently. Insurance companies aren't barely scraping a profit either, they ensure maximum profit margins at the expense of those who purchase insurance from them.. I doubt many people will agree with me, but just my two cents.. I’m not a huge fan of insurance in general. My motto is sh*t happens.. I understand how buying insurance can make someone feel secure. However, I know for a fact, the insurance companies are able to offer such low rates on renter’s insurance because claims occur so infrequently. Insurance companies aren’t barely scraping a profit either, they ensure maximum profit margins at the expense of those who purchase insurance from them..

I doubt many people will agree with me, but just my two cents..

]]> Comment on Five Myths About Renter’s Insurance by Lorena http://www.fivecentnickel.com/2012/02/09/five-myths-about-renters-insurance/comment-page-1/#comment-270062 Lorena Thu, 09 Feb 2012 19:52:25 +0000 http://www.fivecentnickel.com/?p=25842#comment-270062 We haven't always had renter's insurance, but since we moved into our place last year, while I was pregnant, I told my husband we had to get it. Our friend, who happens to be our insurance broker, found us an inexpensive policy that's packaged along with our car insurance. We've got great coverage for our valuables and since it's packaged with our car insurance we don't have to worry about it. We haven’t always had renter’s insurance, but since we moved into our place last year, while I was pregnant, I told my husband we had to get it. Our friend, who happens to be our insurance broker, found us an inexpensive policy that’s packaged along with our car insurance. We’ve got great coverage for our valuables and since it’s packaged with our car insurance we don’t have to worry about it.

]]> Comment on Five Myths About Renter’s Insurance by Casey http://www.fivecentnickel.com/2012/02/09/five-myths-about-renters-insurance/comment-page-1/#comment-270052 Casey Thu, 09 Feb 2012 19:47:19 +0000 http://www.fivecentnickel.com/?p=25842#comment-270052 If you get renter's insurance through a company where you have another type of insurance, it can be even cheaper than you think. When I moved recently, I got a quote for renter's insurance for $100/year from the same company where I get my car insurance. It also got me a multi-policy discount that saved me $60/year on my car insurance, so it's really only $40/year extra to get good coverage. If you get renter’s insurance through a company where you have another type of insurance, it can be even cheaper than you think. When I moved recently, I got a quote for renter’s insurance for $100/year from the same company where I get my car insurance. It also got me a multi-policy discount that saved me $60/year on my car insurance, so it’s really only $40/year extra to get good coverage.

]]> Comment on Five Myths About Renter’s Insurance by CD http://www.fivecentnickel.com/2012/02/09/five-myths-about-renters-insurance/comment-page-1/#comment-270042 CD Thu, 09 Feb 2012 19:18:12 +0000 http://www.fivecentnickel.com/?p=25842#comment-270042 I never knew about renter's insurance back in the days before we scraped enough together to buy our first home. Now I'm renting again and thankfully, my lease requires that I have renter's insurance, so I had to find out about it. The required level per my lease is $300,000 liability and $25,000 actual replacement of contents, and my cost for that is about $10/mo! I personally think, especially at that price, every lease should require it, then there wouldn't be any hardship issues because the renter didn't know about it. But that's just my opinion :) I never knew about renter’s insurance back in the days before we scraped enough together to buy our first home. Now I’m renting again and thankfully, my lease requires that I have renter’s insurance, so I had to find out about it. The required level per my lease is $300,000 liability and $25,000 actual replacement of contents, and my cost for that is about $10/mo! I personally think, especially at that price, every lease should require it, then there wouldn’t be any hardship issues because the renter didn’t know about it. But that’s just my opinion :)

]]> Comment on Ethanol Blended Gas = Lower Mileage? by Dave http://www.fivecentnickel.com/2006/06/01/ethanol-blended-gas-lower-mileage/comment-page-5/#comment-270032 Dave Thu, 09 Feb 2012 18:52:17 +0000 http://www.fivecentnickel.com/2006/06/01/ethanol-blended-gas-lower-mileage/#comment-270032 The 45-cent blending tax credit for ethanol expired Jan 1st, and gas prices have already jumped 10 cents per gallon in Maine. Expect to be at $4 per gallon by summer. Since it's an election year, it's time to make tthe politicians an offer they can't refuse- get rid of the ethanol blending requirement, or we the people will get rid of them... The 45-cent blending tax credit for ethanol expired Jan 1st, and gas prices have already jumped 10 cents per gallon in Maine. Expect to be at $4 per gallon by summer.

Since it’s an election year, it’s time to make tthe politicians an offer they can’t refuse- get rid of the ethanol blending requirement, or we the people will get rid of them…

]]> Comment on Own Your Investments, Rent Your Fun by Michael http://www.fivecentnickel.com/2012/02/08/own-your-investments-rent-your-fun/comment-page-1/#comment-270022 Michael Thu, 09 Feb 2012 18:50:27 +0000 http://www.fivecentnickel.com/?p=25832#comment-270022 I think renting is a great way to 'try out' a hobby or lifestyle. You can always buy later, after you've figured out that you love to do something. For example, no need to own a top of the line kayak right off, you can rent a few and see what you like before buying the one you really want and will actually enjoy. I think renting is a great way to ‘try out’ a hobby or lifestyle. You can always buy later, after you’ve figured out that you love to do something. For example, no need to own a top of the line kayak right off, you can rent a few and see what you like before buying the one you really want and will actually enjoy.

]]> Comment on The Best Values in Colleges – 2012 Edition by Nick http://www.fivecentnickel.com/2012/02/09/the-best-values-in-colleges-2012-edition/comment-page-1/#comment-270002 Nick Thu, 09 Feb 2012 18:19:17 +0000 http://www.fivecentnickel.com/?p=25782#comment-270002 I'm more of a value of the degree (i.e. discipline, etc.) than value of the school guy. But I like lists like these because they continue the conversation about associating a value calculation with going to college instead of just "borrow as much as you can because you need to go to college." I've always been a "buy enough college" guy. If people spent as much time choosing college as they do trying to "save 15% on car insurance" I think the world would be a much different place... :) I’m more of a value of the degree (i.e. discipline, etc.) than value of the school guy. But I like lists like these because they continue the conversation about associating a value calculation with going to college instead of just “borrow as much as you can because you need to go to college.” I’ve always been a “buy enough college” guy.

If people spent as much time choosing college as they do trying to “save 15% on car insurance” I think the world would be a much different place… :)

]]> Comment on Own Your Investments, Rent Your Fun by Valeriu http://www.fivecentnickel.com/2012/02/08/own-your-investments-rent-your-fun/comment-page-1/#comment-269992 Valeriu Thu, 09 Feb 2012 17:46:35 +0000 http://www.fivecentnickel.com/?p=25832#comment-269992 There are principles guiding any investment decision, including the decision to invest or not in a place on the beach. But this is a short and easy rule to remember, like a shortcut. I like it! There are principles guiding any investment decision, including the decision to invest or not in a place on the beach. But this is a short and easy rule to remember, like a shortcut. I like it!

]]> Comment on Five Myths About Renter’s Insurance by ptkdude http://www.fivecentnickel.com/2012/02/09/five-myths-about-renters-insurance/comment-page-1/#comment-269982 ptkdude Thu, 09 Feb 2012 14:52:33 +0000 http://www.fivecentnickel.com/?p=25842#comment-269982 Back when I first started renting I didn't have renter's insurance. After my complex had five fires in two years (all of which completely destroyed the buildings they were in), I quickly added renter's insurance. After each fire, I heard about the residents who had lost everything and had no insurance. Back when I first started renting I didn’t have renter’s insurance. After my complex had five fires in two years (all of which completely destroyed the buildings they were in), I quickly added renter’s insurance. After each fire, I heard about the residents who had lost everything and had no insurance.

]]> Comment on Five Myths About Renter’s Insurance by Hank http://www.fivecentnickel.com/2012/02/09/five-myths-about-renters-insurance/comment-page-1/#comment-269962 Hank Thu, 09 Feb 2012 13:22:39 +0000 http://www.fivecentnickel.com/?p=25842#comment-269962 That's a great point BG. I know that I am going to be careful and protect my possessions and the entire building from negligence. But, that does not mean the the other knuckleheads in my building are going to do the same. For all I know, they probably have three power strips plugged into each other forming a chain to the toaster. That’s a great point BG. I know that I am going to be careful and protect my possessions and the entire building from negligence. But, that does not mean the the other knuckleheads in my building are going to do the same. For all I know, they probably have three power strips plugged into each other forming a chain to the toaster.

]]> Comment on Five Myths About Renter’s Insurance by BG http://www.fivecentnickel.com/2012/02/09/five-myths-about-renters-insurance/comment-page-1/#comment-269952 BG Thu, 09 Feb 2012 12:42:24 +0000 http://www.fivecentnickel.com/?p=25842#comment-269952 When I was renting, I was surprised how cheap the renters insurance was. Without a policy you are hoping that your family, and everyone else in your shared apartment building won't burn the place down causing all your possessions to go up in smoke. When I was renting, I was surprised how cheap the renters insurance was. Without a policy you are hoping that your family, and everyone else in your shared apartment building won’t burn the place down causing all your possessions to go up in smoke.

]]> Comment on Moneydance as a Quicken Replacement? by ktbos http://www.fivecentnickel.com/2011/07/13/moneydance-as-a-quicken-replacement/comment-page-1/#comment-269942 ktbos Thu, 09 Feb 2012 11:39:25 +0000 http://www.fivecentnickel.com/?p=19142#comment-269942 Doug J., what sort of things does it not do well and what sort of quirks and oddities are there? I'm still planning the switch to MD soon and the more I know ahead of time, the better the process will go. Thanks. Doug J., what sort of things does it not do well and what sort of quirks and oddities are there? I’m still planning the switch to MD soon and the more I know ahead of time, the better the process will go. Thanks.

]]> Comment on Will the IRS Disallow Backdoor Roth Contributions? by White Coat Investor http://www.fivecentnickel.com/2012/02/01/will-the-irs-disallow-backdoor-roth-contributions/comment-page-1/#comment-269902 White Coat Investor Thu, 09 Feb 2012 05:32:00 +0000 http://www.fivecentnickel.com/?p=25482#comment-269902 I'm going into my third year of doing backdoor Roth IRAs. I'm really not worried about the step transaction doctrine. Plus a 3 year statute of limitations? At most I'd have to unwind $30K in backdoor Roths. Trivial compared to the benefits. This is money that would otherwise be in a taxable account. I’m going into my third year of doing backdoor Roth IRAs. I’m really not worried about the step transaction doctrine. Plus a 3 year statute of limitations? At most I’d have to unwind $30K in backdoor Roths. Trivial compared to the benefits. This is money that would otherwise be in a taxable account.

]]> Comment on Moneydance as a Quicken Replacement? by Doug J. http://www.fivecentnickel.com/2011/07/13/moneydance-as-a-quicken-replacement/comment-page-1/#comment-269892 Doug J. Thu, 09 Feb 2012 03:31:35 +0000 http://www.fivecentnickel.com/?p=19142#comment-269892 since my first posting in December, I have switched over to Moneydance exclusively. It works. There are some quirks and oddities. there are some things that it doesn't do very well. But on balance, I am satisfied. It does the job for me and it is not Quicken. I can never go back to Quicken. Not after the way Intuit has treated it's users. I use MD to manage my checking and savings accounts and track my loans and investments. I going to start taking a more active role in suggesting improvements to MD. Hopefully some of my thoughts will result in changes. since my first posting in December, I have switched over to Moneydance exclusively. It works. There are some quirks and oddities. there are some things that it doesn’t do very well. But on balance, I am satisfied. It does the job for me and it is not Quicken. I can never go back to Quicken. Not after the way Intuit has treated it’s users. I use MD to manage my checking and savings accounts and track my loans and investments. I going to start taking a more active role in suggesting improvements to MD. Hopefully some of my thoughts will result in changes.

]]> Comment on Lending Club and Taxes by MZ http://www.fivecentnickel.com/2010/03/26/lending-club-and-taxes/comment-page-1/#comment-269882 MZ Thu, 09 Feb 2012 02:23:00 +0000 http://www.fivecentnickel.com/?p=5231#comment-269882 Not sure - I'm sure the IRS has pages that document the kind of penalties you might be subject to. For 50 dollars the most likely thing they'd do is send you a letter saying they'd found this income, here's what you owe, pay up. I don't know if they audit LC's books and make any effort to compare them to what people are declaring, so I don't know the odds of getting caught. My take is that even though the income isn't much, it doesn't take all that long to figure it all out. An interesting article on the tax reporting: http://www.mydollarplan.com/lending-club-taxes/ They mention that a charge-off should be reported on your Schedule D as a personal bad debt (and then any recovery, in the future, would need to be treated as income in that year). I didn't know about that last year when I did our taxes - had 20 dollars charged off that I wound up just subtracting from my net LC income. Not sure – I’m sure the IRS has pages that document the kind of penalties you might be subject to. For 50 dollars the most likely thing they’d do is send you a letter saying they’d found this income, here’s what you owe, pay up.

I don’t know if they audit LC’s books and make any effort to compare them to what people are declaring, so I don’t know the odds of getting caught. My take is that even though the income isn’t much, it doesn’t take all that long to figure it all out.

An interesting article on the tax reporting: http://www.mydollarplan.com/lending-club-taxes/

They mention that a charge-off should be reported on your Schedule D as a personal bad debt (and then any recovery, in the future, would need to be treated as income in that year). I didn’t know about that last year when I did our taxes – had 20 dollars charged off that I wound up just subtracting from my net LC income.

]]> Comment on Moneydance as a Quicken Replacement? by Matt McBride http://www.fivecentnickel.com/2011/07/13/moneydance-as-a-quicken-replacement/comment-page-1/#comment-269872 Matt McBride Thu, 09 Feb 2012 00:56:59 +0000 http://www.fivecentnickel.com/?p=19142#comment-269872 Don't make the same mistake I did. I ordered Moneydance without the free trial offer. In no way is it an acceptable alternative to Quicken. I will go back to using an old computer just for bill-paying with Quicken before I spend another minute with Moneydance. A huge disappointment!! Rather elementary and demanding. Don’t make the same mistake I did. I ordered Moneydance without the free trial offer. In no way is it an acceptable alternative to Quicken. I will go back to using an old computer just for bill-paying with Quicken before I spend another minute with Moneydance. A huge disappointment!! Rather elementary and demanding.

]]> Comment on Lending Club and Taxes by yourPFpro http://www.fivecentnickel.com/2010/03/26/lending-club-and-taxes/comment-page-1/#comment-269862 yourPFpro Thu, 09 Feb 2012 00:34:54 +0000 http://www.fivecentnickel.com/?p=5231#comment-269862 I have a suggestion/question for those of you with multiple small($25-$75) loans. Since your loans are so small and it seems like way too much of a hassle to calculate how much you really owe to the IRS once you subtract the LC fees, what are the penalties for not paying these taxes? If I invested $500 last year and got a 10% return. I made $50 in interest. I'm assuming that if the IRS does come looking for you, they will charge you for what you should have paid in taxes plus interest plus a small penalty? I have a suggestion/question for those of you with multiple small($25-$75) loans. Since your loans are so small and it seems like way too much of a hassle to calculate how much you really owe to the IRS once you subtract the LC fees, what are the penalties for not paying these taxes?

If I invested $500 last year and got a 10% return. I made $50 in interest. I’m assuming that if the IRS does come looking for you, they will charge you for what you should have paid in taxes plus interest plus a small penalty?

]]>