Daily personal finance observation, musing and decisions in a journey toward financial independence by 36 with at least a million dollars.

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Last news: January 1, 1970 00:00:00

Moneysmartz helps connect individuals with the information and advice they need to organize, simplify, and strengthen their personal finances.

Total news: 31
Last news: December 11, 2007 22:26:08

WSJ columnist Jane J. Kim reviewed the trick of profiting from introductory credit card offers and declared that there are still enough opportunities for those we are willing to take a temporary hit on credit score for a couple of extra grands a year:

"The increasingly popular strategy involves applying for a slew of credit cards that charge 0% interest on balance transfers, then parking those borrowed funds in high-yield online savings accounts, which often pay 5% or more.

Then, just before the cards introductory period expires, typically in 12 months, you pay off the loans and pocket the interest earned.

...

Competition among card issuers for new customers is so intense that companies cant afford to do away with the generous offers altogether. American Express Co., Citibank, J.P. Morgan Chase & Co. and Bank of America, for example, say they still offer no-fee, 0% balance transfers to selected customers."

I myself am a loyal practioner of the practice, and in the past 12 months alone, I maintained an average credit card balance of over $40,000 in 0% APR or low-APR balance transfer offers. Thats probably the easiest $2,000 I pocketed last year.

In case you dont know where to find these offers, below are some cards you can look at. They all include introductory 0% APR balance transfer offers for 12 months or longer with credit card annual fee. I included those with capped balance transfer transaction fees since with a larger balance transfer, arbitrage profit can still be obtained under capped fee arrangements.

Hot Deal: 5% cashback on everything from Citi CashReturns Mastercard

Read more news like this from PFBlog.com, The Unique Personal Finance Blog Since 2003.

WSJ columnist Jane J. Kim reviewed the trick of profiting from introductory credit card offers and declared that there are still enough opportunities for those we are willing to take a temporary hit on credit score for a couple of extra grands a year:

"The increasingly popular strategy involves applying for a slew of credit cards that charge 0% interest on balance transfers, then parking those borrowed funds in high-yield online savings accounts, which often pay 5% or more.

Then, just before the cards introductory period expires, typically in 12 months, you pay off the loans and pocket the interest earned.

...

Competition among card issuers for new customers is so intense that companies cant afford to do away with the generous offers altogether. American Express Co., Citibank, J.P. Morgan Chase & Co. and Bank of America, for example, say they still offer no-fee, 0% balance transfers to selected customers."

I myself am a loyal practioner of the practice, and in the past 12 months alone, I maintained an average credit card balance of over $40,000 in 0% APR or low-APR balance transfer offers. Thats probably the easiest $2,000 I pocketed last year.

In case you dont know where to find these offers, below are some cards you can look at. They all include introductory 0% APR balance transfer offers for 12 months or longer with credit card annual fee. I included those with capped balance transfer transaction fees since with a larger balance transfer, arbitrage profit can still be obtained under capped fee arrangements.

Hot Deal: 5% cashback on everything from Citi CashReturns Mastercard

Read more news like this from PFBlog.com, The Unique Personal Finance Blog Since 2003.

One more trip to go, and it will be the end of the year.

And it is a very long year in terms of travel: by the end of the year, I will have flown a total of 124,520 miles. This includes 7 cross-Pacific trips to the U.S., one trip each to Japan, Hong Kong, Singapore, Indonesia, Cambodia and a nice southwestern town in China, and the upcoming Christmas trip to Maldives.

Yes, 124,520 miles is a long distance -- in fact, it is five times the length of the Equator. On the other hand, it is another typical year. In 2006, I travelled a total of 122,709 miles, so my 2007 travel diary will break the 2006 record, but only by the smallest margin of 1.5%.

Commercial airlines usually fly about 500 miles per hour on average, so 124,520 miles means 250 hours or 10 whole days in the cabin. It is no wonder Im developing my rhythm in the cabin like watching videos in my Zune, reading magazines and playing computer games.

Hot Deal: 5% cashback on everything from Citi CashReturns Mastercard

Read more news like this from PFBlog.com, The Unique Personal Finance Blog Since 2003.

One more trip to go, and it will be the end of the year.

And it is a very long year in terms of travel: by the end of the year, I will have flown a total of 124,520 miles. This includes 7 cross-Pacific trips to the U.S., one trip each to Japan, Hong Kong, Singapore, Indonesia, Cambodia and a nice southwestern town in China, and the upcoming Christmas trip to Maldives.

Yes, 124,520 miles is a long distance -- in fact, it is five times the length of the Equator. On the other hand, it is another typical year. In 2006, I travelled a total of 122,709 miles, so my 2007 travel diary will break the 2006 record, but only by the smallest margin of 1.5%.

Commercial airlines usually fly about 500 miles per hour on average, so 124,520 miles means 250 hours or 10 whole days in the cabin. It is no wonder Im developing my rhythm in the cabin like watching videos in my Zune, reading magazines and playing computer games.

Hot Deal: 5% cashback on everything from Citi CashReturns Mastercard

Read more news like this from PFBlog.com, The Unique Personal Finance Blog Since 2003.

Summer time, review time. Now that we are six months into 2006, it is high time to review our financial progress against the ambitious plan we set forth earlier in the year. To refresh the memory, our stated financial goals for 2006 are: Goal 1: Annual Net Worth Growth of $150,000 ($12,500/month) Goal 2: Annual Investment Gains of $40,000 ($3,333/month ... (6 comments)

Read more news like this from PFBlog.com, The Best Personal Finance Weblog.

Summer time, review time. Now that we are six months into 2006, it is high time to review our financial progress against the ambitious plan we set forth earlier in the year. To refresh the memory, our stated financial goals for 2006 are: Goal 1: Annual Net Worth Growth of $150,000 ($12,500/month) Goal 2: Annual Investment Gains of $40,000 ($3,333/month ... (6 comments)

Read more news like this from PFBlog.com, The Best Personal Finance Weblog.

When it comes to the cycle of setting up financial goals and achieving them, oftentimes a good post-mortem analysis gives more insight than mere celebration of another mission accomplished.

As we are quickly bidding farewell to 2007, I took some time to revisit my 2007 plan -- I did a fairly sophisticated model a year ago to set a net worth growth goal of $230,000 -- and I overachieved it by about $34,000. But what really happened?

In order to complete the exercise, I took the original numbers from my 2007 planning financial model (which I did in December 2006), and compared them against actual results in 2007 in the income statement format I introduced lately. Here is the comparison:

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Read more news like this from PFBlog.com, The Unique Personal Finance Blog Since 2003.

When it comes to the cycle of setting up financial goals and achieving them, oftentimes a good post-mortem analysis gives more insight than mere celebration of another mission accomplished.

As we are quickly bidding farewell to 2007, I took some time to revisit my 2007 plan -- I did a fairly sophisticated model a year ago to set a net worth growth goal of $230,000 -- and I overachieved it by about $34,000. But what really happened?

In order to complete the exercise, I took the original numbers from my 2007 planning financial model (which I did in December 2006), and compared them against actual results in 2007 in the income statement format I introduced lately. Here is the comparison:

Hot Deal: 5% cashback on everything from Citi CashReturns Mastercard

Read more news like this from PFBlog.com, The Unique Personal Finance Blog Since 2003.

Starting in 2004, I have always published my annual financial goals at the beginning of each year, and reviewed the result when the year wrapped up. It is a great practice that allows me to keep a record and learn from past experience.

Having spent most of my December to complete my 2008 Financial Plan, I found it might be time to summarize and publicize my financial goals for 2008 in this dedicated post.

Measurement #1: Net Worth Growth

Goal: Net Worth of $1,120,000 by the end of 2008 ($225k annual growth)
Stretch Goal: Net Worth of $1,150,000 by the end of 2008 ($255k annual growth)

Comments: Net worth growth always comes at the top of my annual financial goals and this year will be no different. We are anticipating a challenging year and our net worth improvement in 2008 is likely to be smaller than that of 2007. However, I still want to assign myself a stretch target that exceeds our detailed plan by over 10%.

Hot Deal: 5% cashback on everything from Citi CashReturns Mastercard

Read more news like this from PFBlog.com, The Unique Personal Finance Blog Since 2003.

Thank you for the those who participated in the "Producing My 2008 Financial Plan" contest at PFBlog, which I believe is the first-ever contest of one personal finance blogger inviting the community to work on ones annual plan. As planned, today will be the day we announce the winner of Participation Award (prize is $50 Amazon gift certificate). Winner of "Closest to the Pin" Award will be announced before the new year starts and after I publish all posts about my own 2008 Financial Plan thoughts.

Let me start by saying the contest is inspired by an internal company activity. In the most recent summit of hundreds of financial professionals in the company, our CFO asks us to predict the earnings-per-share (EPS) of the company in three years, by supplying us with an Excel model with only seven variables (on revenue and margin growth of each of the three key business lines, and the effect of other corporate finance activities on EPS). The message he conveyed (successfully) is: if one can make a good forecast of a 50-billion-dollar company without a big spreadsheet, it means true business insight can and should be delivered in a simple fashion.

Hot Deal: 5% cashback on everything from Citi CashReturns Mastercard

Read more news like this from PFBlog.com, The Unique Personal Finance Blog Since 2003.

Thank you for the those who participated in the "Producing My 2008 Financial Plan" contest at PFBlog, which I believe is the first-ever contest of one personal finance blogger inviting the community to work on ones annual plan. As planned, today will be the day we announce the winner of Participation Award (prize is $50 Amazon gift certificate). Winner of "Closest to the Pin" Award will be announced before the new year starts and after I publish all posts about my own 2008 Financial Plan thoughts.

Let me start by saying the contest is inspired by an internal company activity. In the most recent summit of hundreds of financial professionals in the company, our CFO asks us to predict the earnings-per-share (EPS) of the company in three years, by supplying us with an Excel model with only seven variables (on revenue and margin growth of each of the three key business lines, and the effect of other corporate finance activities on EPS). The message he conveyed (successfully) is: if one can make a good forecast of a 50-billion-dollar company without a big spreadsheet, it means true business insight can and should be delivered in a simple fashion.

Hot Deal: 5% cashback on everything from Citi CashReturns Mastercard

Read more news like this from PFBlog.com, The Unique Personal Finance Blog Since 2003.

The renowned tax consulting firm CCH has released its projection of federal income tax brackets for 2008. Here are the major changes that will affect our family (when we file joint returns):

Tax Brackets

Joint returns. For married taxpayers filing jointly and surviving spouses, the maximum taxable income subject to the 10-percent bracket will rise from $15,600 in 2007 to $16,050 in 2008; the top of the 15-percent tax bracket will increase from $63,700 to $65,100. The bracket amounts for the remaining tax rates show similarly proportionate increases: $131,450 as the maximum for the 25-percent bracket (up $2,950 from 2007); $200,300 for the 28-percent bracket (up $4,450 from 2007); and $357,700 for the 33-percent bracket (up $8,000 from 2007). Amounts above the $357,700 level will be taxed at the 35 percent rate.

Hot Deal: 5% cashback on everything from Citi CashReturns Mastercard

Read more news like this from PFBlog.com, The Unique Personal Finance Blog Since 2003.

The renowned tax consulting firm CCH has released its projection of federal income tax brackets for 2008. Here are the major changes that will affect our family (when we file joint returns):

Tax Brackets

Joint returns. For married taxpayers filing jointly and surviving spouses, the maximum taxable income subject to the 10-percent bracket will rise from $15,600 in 2007 to $16,050 in 2008; the top of the 15-percent tax bracket will increase from $63,700 to $65,100. The bracket amounts for the remaining tax rates show similarly proportionate increases: $131,450 as the maximum for the 25-percent bracket (up $2,950 from 2007); $200,300 for the 28-percent bracket (up $4,450 from 2007); and $357,700 for the 33-percent bracket (up $8,000 from 2007). Amounts above the $357,700 level will be taxed at the 35 percent rate.

Hot Deal: 5% cashback on everything from Citi CashReturns Mastercard

Read more news like this from PFBlog.com, The Unique Personal Finance Blog Since 2003.

Our generations of lawmakers truly dont want to make our financial life easy, and thats why every year there are a long list of tax rule changes that affect everyones life. To this end, Tom Herman, the tax columnist at the Wall Street Journal, provided a great summary of major personal income tax changes for 2008.

Without repeating the every single bullet in the long list, I just want to highlight one change that may have profound impact on manys investment strategy or portfolio management. Do you know the rules of capital gains are becoming much more favorably starting this year for those in 10% or 15% tax brackets?

Yes, for the next three years (2008 to 2010), taxpayers in those two tax brackets wont have to pay anything for long-term capital gains and qualified dividends. The tax rate on such income for those of higher income, will stay at the prevailing rate of 15%. For short-term capital gains and disqualified dividends, all taxpayers still have to pay tax at the marginal tax rate just like other ordinary income.

Hot Deal: 5% cashback on everything from Citi CashReturns Mastercard

Read more news like this from PFBlog.com, The Unique Personal Finance Blog Since 2003.

CNNMoney gave a detailed breakdown of all changes in the new Pension Protection Act of 2006. Of all the changes, most meaningful one is perhaps the automatic enrollment, which should have a material impact on the nationals savings rate after a couple of years. Maybe this is the necessary step before the politicans can start to fix the social security ... (6 comments)

Read more news like this from PFBlog.com, The Best Personal Finance Weblog.

CNNMoney gave a detailed breakdown of all changes in the new Pension Protection Act of 2006. Of all the changes, most meaningful one is perhaps the automatic enrollment, which should have a material impact on the nationals savings rate after a couple of years. Maybe this is the necessary step before the politicans can start to fix the social security ... (6 comments)

Read more news like this from PFBlog.com, The Best Personal Finance Weblog.

Morningstar debates the pros and cons of using the self-directed windows in certain 401(k) plans. My employer Microsoft never offered one, and as far as I know, there are many an anger employees. Some even wrote a whitepaper for Bill Gates think week this spring. For me, I would certain entertain more flexibility in investing our 401(k) balance over $80,000. (2 comments)

Read more news like this from PFBlog.com, The Best Personal Finance Weblog.

Morningstar debates the pros and cons of using the self-directed windows in certain 401(k) plans. My employer Microsoft never offered one, and as far as I know, there are many an anger employees. Some even wrote a whitepaper for Bill Gates think week this spring. For me, I would certain entertain more flexibility in investing our 401(k) balance over $80,000. (2 comments)

Read more news like this from PFBlog.com, The Best Personal Finance Weblog.

Back in May, I started my loan shark practice at Prosper.com, a pioneer of web-based people-to-people lending in the nation. It has been a great learning experience so far, and I admit I am addicted -- in less than three months, I have underwritten 100 personal loans for a combined principal of $8,127, which makes me the 205th biggest lender ... (11 comments)

Read more news like this from PFBlog.com, The Best Personal Finance Weblog.

Back in May, I started my loan shark practice at Prosper.com, a pioneer of web-based people-to-people lending in the nation. It has been a great learning experience so far, and I admit I am addicted -- in less than three months, I have underwritten 100 personal loans for a combined principal of $8,127, which makes me the 205th biggest lender ... (11 comments)

Read more news like this from PFBlog.com, The Best Personal Finance Weblog.