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Fighting Wamu
2008-03-21 13:31:00
Lesson of the day: Don't mess with Miel.People who know me would likely say that I can deal with just about anything without getting too upset about things. After all, I do live in Afghanistan and deal with frequent travel and other stressful situations.Getting screwed by WaMu is where I draw the line.As regular readers know, our current finance goal is paying off our second mortgage with WaMu. This has to do with putting money on our highest debt, but it is also because we are tired of dealing with WaMu's crap.The main issue that we are dealing with now is that WaMu has repeatedly applied the funds sent in for our second mortgage to our first mortgage instead. In each case the canceled check clearly shows that the payment was intended for the second mortgage. To learn about other reasons why WaMu sucks, check out past postings.The first time this happened was back in July, and I only called about a dozen times and in the end they still didn't reverse the payment and apply it...
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Keeping it Together Long Distance
2008-03-20 14:53:00
Hi All,I've got to dash off to the university today, so there isn't a whole lot of time to take care of blogging. But, I did want to share a couple of thoughts about how Miel and I are holding down our marriage despite being on two different continents.First, it's all about skype. If you don't know about skype - you've got to check it out. It's a form of internet telephony which allows you place long distance calls for free to other skype users. So, we effectively have a means of costless communication with each other. We can talk for as long as we want without paying a penny.Second, we have twice weekly scheduled calls. We used to meet on Saturdays for finance and household chats, but now we have calls scheduled on both Wednesdays and Saturdays. We often end up taking for two or three hours and discuss all sorts of stuff, finance, taxes, our daily lives, our families, how we're doing emotionally, etc. We've both got webcams so its almost like sitting in the same roo...
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Economic Turbulence - DINKs Do Nothing
2008-03-20 03:12:00
Hi All,There has been a lot of chatter in blogsphere and media about how to protect yourself against the current choppy economy. I've contributed to this as well, but in the interests of transparency, I wanted to tell our readers what we're doing to adjust to this recession.Nothing.That's right, we are doing nothing to adjust our personal finance because of the recession. We aren't buying bonds, looking into beaten down stocks or buying shares on international markets. What we are doing is sticking to our plan. Paying off our second mortgage and socking as much as possible into our retirement accounts. Why? For me, its really a matter of faith. I believe that the American economy will recover in due course and that our investments are sound. Also, more realistically we don't have a lot of excess cash, and having fewer resources means its easier to stay focused.Best,James
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Defensive Investing for the Recession
2008-03-19 17:26:00
Hi All,If you've been following the news recently, you probably know that some people think America is heading into a recession. While its hard to predict the economic future, the outlook certainly looks gloomy.So, if you want to take a defensive stance with your personal finance, you might consider investing in bonds. Here are two options.1) Federal Savings Bonds: Savings bonds are stodgy - the kind of thing your grandpa would give you as a kid. However in the current environment savings bonds and specifically series I bonds, have some attractive aspects. Among these are safety and inflation protection. In terms of safety, the principle and interest payments of I bonds are guaranteed by the full faith and credit of the government, making them some of the safest securities on earth. Second, the I bond is linked to the consumer price index, so buying them partially covers you against inflation.You can get I bonds at any bank or from treasurydirect.gov.2) Municipal Bonds: Munic...
More About: Investing , Recession

Thank Goodness
2008-03-18 21:57:00
Hi All,I just wanted to take a moment to share a couple of personal thoughts with our readers. First, I was able to transfer over $702 dollars this month from our schwab brokerage accounts. The source of this money is dividends paid from our investments in common stocks. It feels wonderful to have this cash coming in. Especially because my checking account is down to $20 bucks and we owe property taxes on our place this month. Second, I'm tremendously gratified that my wife Miel and I can work together on this blog. As you know, she's helping our nation's efforts in Afghanistan and lives in Kabul. The fact that we can both work together on this webpage gives us an opportunity to be business partners and coauthors in a way that helps bridge the distance between Kabul and Washington DC. There is no way I'd be as happy or as rich if I didn't marry Miel.Just my two cents.Best,James
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More Thoughts On LendingClub
2008-03-18 18:32:00
Hi All,Just wanted to update our readers about our thoughts on LendingClub. For those of you who don't know about LendingClub, its a person to person on-line money lending service like prosper.com or zopa.com. We got a promotional offer a while back, and since we like discussing these sorts of things, today's posting is on LendingClub's screening procedures for loan applicants.According to the email exchange I struck up with Rob Garcia, LendingClub's web promoter, their service actually undergoes a rigorous screening process before listing a borrowers loan request.Their screening process has the following elements:1) Staff verify the basic facts of all applications, including addresses, phone numbers, employment, etc.2) Loans with high credit scores (e.g. FICO of 700 or higher) but a short credit history get extra scrutiny. LendingClub defines a short credit history as six months or less.3) Borrowers with FICO scores less than 640 are not permitted to list requests4) Individuals...
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DINK's Taxes
2008-03-17 13:51:00
It's about that time to be dealing with the old tax man. James & I set aside time on Saturday to discuss the ins and outs of our tax situation this year.Last year was our first year filing jointly, and we were amazed to see our first round of taxes to tally out at a whopping seventy pages! Most couples may not start with such complicated finances, but in our case we both had different financial issues that added to the general complexities.The thing about taxes are that they change as your life does. For us we are still wondering how long it will take for two relatively consistent years in a row. I'm thinking it will likely be some time in the future, if ever.While last year it was challenging, this year we are trying to sort out how my international work will affect our taxes. We still have many questions unanswered, but it seems that we may have to file for an extension until the end of September so that I can file based on being overseas for a year. This means that we...
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Bear Stears Down the Tubes
2008-03-17 04:09:00
Hello All,Just saw this one the news wire from Yahoo. Evidently JP Morgan is buying the once mighty Bear Sterns for 2 dollars a share. That's right, folks - 2 bucks a share. For those of you who don't follow stocks, that means that Bear Sterns is worthless. The total purchase price that JP Morgan is offering is approximately $236 million, which is essentially paying for the staff, the office equipment and buildings. There was no provision in the offering price for cash flow, because Bear Sterns doesn't have any. That's right, BC is effectively bankrupt, kaput, out of business. It's being called the first major casualty of the recession.All I can says is "wow".Check out the story here.Best,James

Complex Budgeting
2008-03-15 12:26:00
Living as an expat has certainly added to the complexity of my budgeting exercises. There are many financial perks to living in a dangerous post such as Afghanistan, but there are also a number of fluctuations that I continually have to manage.This includes:No danger pay whenever I'm out of Afghanistan, including while working in Southeast Asia;Per diem that is post tax while on business;Advances and reimbursements for business expenses;Fluctuating R&R expenses;No danger pay or post differential when I'm in the states;Fluctuation of taxes as allowances ebb and flow.This means that I have to be careful with automated finances, as the incoming pay will fluctuate often as my travel bumps up in the near future.To make sure that I was keeping this delicate balance I recently spent some time updating my budget. James' budget is relatively fixed, so I'm just concentrating on mine for the moment.Here are the figures that show the variations that should be expected. Note that the ...
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Recession Bells are Ringing!
2008-03-14 15:03:00
Hi All,Just saw this headlines from yesterdays news. Evidently 70% of economists polled by the New York Times are saying that America is in a recession. Whats remarkable about this survey is that its hard to get economists to agree on anything. If 70% agree on an interpretation of statistical data, something is definetly going on.So, two initial thoughts:1) The FED will probably cut interest rates - lock in any high rate bonds or CDs while you can.2) Since US fundaments will likely be weak over the next few months, you might consider bargain hunting in the US stock market or - better yet, send your dollars abroad. There are LOTS of great investment opportunites in markets outside of America.I hate to advocate betting against the USA, but the sages are saying the tea leaves aren't in our favor.Best,James
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Three Signs of a Struggling Bank
2008-03-14 06:01:00
Hi All,Yesterday afternoon I went by the bank to take of some business with our safety deposit box. Now, just to give you some background on why this is relevant - we bank with PNC. Its recently been having some problems in the DC area. By problems, I mean that its closing branches and having problems getting new depositors.Well, when I went in there, they'd lost the paperwork for our box. It took the better part of 40 minutes to get things straightened out. Now, I'm not an expert but that's a bad sign for PNC. - And more importantly its given me some cause for thinking about how to recognize a company that's struggling. We don't know much about retail banking but I think our experience with PNC bank and Washington Mutual(WaMu) shows that struggling banks can be identified by at least three factors.1) Closing Branches:We've banked with both PNC and Washington Mutual. Both of them have recently closed branches in the DC area. WaMu doesn't have any retail places inside t...
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How We Made Money - The Short Answer
2008-03-12 18:42:00
Many people read personal finance blogs for tips on how to make money. To assist the reading public, we thought we'd briefly discuss the top three sources of our net worth so the reader can see areas we've been successful in.1) Investment Real Estate: Miel and I have had two investment properties. We sold one because of the wear and tear on our relationship. However, we still have the other one, and its equity is about 18 percent of our networth. The DC housing boom was good to us.2) Hansens Natural Corp: While the wisdom of placing a large position in a single stock is debatable. We made approximately $50,000 by investing in Hansens. We've still got a limited holding, but the market has been hard on the company recently, so we've invested elsewhere.3) TIAA & CREF: Miel and I have both made healthy contributions to our retirement accounts through TIAA & CREF. Roughly 28 percent of our networth comes from this. Generally speaking, retirement 401ks are great because they a...
More About: Money , Answer , Made , Short

Michelle Singletary
2008-03-12 05:21:00
Hi All,If you're looking to read some good stuff on personal finance, you might consider checking out what Michelle Singletary has to say. For those of you don't know her, she's a columnist with the WashingtonPost focusing specifically on personal finance issues. Black America has the goods, but you might consider her postings: Honey, I Need Some Money! and Q & A On Couples Financial Management.Best,James

6 Financial Mistakes Couples Make
2008-03-12 05:08:00
Hi All,Since readers of our blog are interested in finance for couples you might be interested in the latest story from Smartmoney.com. Its a great piece describing six common mistakes couples make when addressing their finances. Check it out here.Best,James
More About: Financial , Couples , Make

How much is enough?
2008-03-11 16:23:00
Clearly we humans have an issue with never having enough, Americans in particular.Wealth and abundance is such a very relative feeling. Working hard to achieve our goals, related to paying off our second mortgage, I am reminded of the relative feeling of prosperity I felt as a Peace Corps Volunteer making $85 a month.Then I thought that my $5k in the bank when I returned from service was a goldmine in comparison to my friends who had stayed stateside and had that much in debt, while simultaneously being deprived of sunlight in the cube farm.Now the $5k increase in our net worth initially looked like a paltry progress towards our long term goals.I've decided it's enough of that. We need to work less and feel more abundant with what we enjoy right now. Not judging from what we've had, or what we hope to have, but the here and now.By feeling prosperous in the now, I believe that will better enable us to reach our goals in the long term. Better to honor what we have than to fight...

How We Are Paying Off Our Second Mortgage
2008-03-10 14:24:00
Hi All,This weekend our good friend Brad paid me a visit. In addition to discussing his love life, we chatted a bit about our blog - well okay, I wanted to talk about the blog - Brad wanted to discuss his love life. However, it did come up that we sometimes don't give enough specific examples in our postings. So, in this one we wanted to give you more details about how we've been paying off our second mortgage.1) Reprioritizing:All of our funds from stock dividends, blog income, prosper.com, and our investment property are going to the payoff the trust. Much of our salaries are going into it also. We will be applying big blocks of Miel's income when a couple of administrative issues get cleared up with her job. So far, we've been able to drum up $900 per month from these sources. The actual amounts we pay are shown below.2) Linked Accounts:Nearly all of our finances are linked electronically. Our prosper and brokerage accounts are linked to our checking accounts. Our paychecks a...
More About: Mortgage

Best Post Ever
2008-03-10 08:23:00
Hi All,If you want to hear an uplifting story about getting out of debt surf on over The Simple Dollar. Trent has a great posting about what motivated him to get his financial house in order.Best,James
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Personal Finance Tools
2008-03-09 04:34:00
We'd like to hear from our readers about what kinds of financial tools you have found to be most useful, and what are those that you've dreamed of, but haven't been able to locate yet.We DINKs have been invited to a personal finance leaders workshop in San Francisco at the end of the month. Miel will be attending and presenting on behalf of the DINKs. Aside from having bloggers contribute from their own experience, the workshop will look into what tools we can put our heads together and build.As we've begun to put together our powerpoint presentation, I realized that our best resource is to ask our readers what they are interested in finding. We can do our best to put together helpful tools, but if you've got ideas on what you feel has been missing in your financial toolkit, please let us know. We will present your contributions and share with other bloggers to see what we can do in furthering your financial resources.Thanks much for your ideas and suggestions.Best,Miel
More About: Personal , Tools , Personal Finance , Finance

Buy Stock People, Buy Stock!
2008-03-07 07:31:00
Hi All,Since the markets are choppy, people are seem to be reluctant to buy stocks. Here is a quote from Peter Lynch that sums up why you should reject this view:"When stocks are attractive, you buy them. Sure, they can go lower. I've bought stocks at $12 that went to $2, but then they later went to $30. You just don't know when you can find the bottom".- Peter Lynch
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LendingClub Update
2008-03-06 15:34:00
Hi All,Just wanted to give you a quick update on our thoughts on LendingClub. As you may know, LendingClub is a person to person on-line lending service similar to prosper.com. We signed up a while ago via a promotional offer.Since most readers of personal finance blogs are interested in peer to peer lending, I wanted to give you a sense of our experience with the site so far. Since we don't need to borrow any money, the following observations come from the standpoint of being a lender. Account Sign Up: No problems here. LendingClub's account sign up and deposit process is seamless and quick.Better Protection for Lenders: From my review of LendingClub's stated policies they seem more focused on lender protection than their competitor prosper.com. In this regard, there are two aspects I like. First, they only allow borrowers who have a FICO score of 640 or better. This effectively screens out most of the deadbeats. Second, LendingClub goes after delinquent borrowers rath...
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Say 'No' To The Horror of Rubbish Presents!
2007-12-04 13:33:00
With the holiday season creeping (more like catapulting) closer on the horizon, gift giving and receiving can be on the mind. While in theory gifts are given and received out of love, that doesn't always mean that you love the gift.OxFam has come up with a creative campaign called Say 'No' To The Horror of Rubbish Presents ! (Click on the photo or link for the cute, short, advert.) Their approach is remind people what good their money can do in the place of unwanted or unneeded gifts.For those of you less familiar with Oxfam, it is a British development, relief, and campaigning organisation that works with others to overcome poverty and suffering around the world.There are all sorts of creative ways that your money can help others in need. For instance:Manage A ForestProvide TrainingProvide the Gift of WaterProvide an EducationBuy a Goat! & So much more!So this year, think before you buy someone a potentially rubbish present!Happy Holidays!MielP.S. For those less familiar ...
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Hot Stock Tip Of the Day
2007-12-03 17:17:00
According to an anonymous source (a.k.a. Jefferson Krull of suckmynasdaq.com fame) today's hot stock is Doral Financial Corp (DRL). We won't be buying any, having lost enough in the market as it is - but if you're looking for some action in stocks - you might find it over at DRL.
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Two Easy Ways To Trim Your Federal Taxes
2007-12-02 17:26:00
Hi All,Since this year is quickly winding down, you might be thinking about next years income tax bill. Probably you're wondering about how to figure out how to make it smaller. After giving the matter some thought, I wanted to suggest a couple of easy things you can do to minimize your federal tax burden.1) Maximize Contributions to Retirement Plans: We've blogged about this before, but if you have a 401k or a 403b plan you should consider increasing the amount you contribute. The reason is every dollar you contribute to a plan is a dollar off your federal taxable income. Depending on your tax bracket, that can add up to a substantial savings. Not only do you get the reduced taxes, if your retirement plan money is well invested, you'll have the advantage of having your funds on the stock market in tax-deferred account. That's a two for one - a "no brainer".My wife Miel does this, and before going back to school I did this also. So in this case we've been practicing what we pre...
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Three Standards for Investment Ethics.
2007-11-30 19:38:00
Ethics in investing. Boy, this is a tough one. Sometimes its often difficult to determine what's ethical corporate behavior and what's not ethically acceptable corporate behavior. Opinions differ. For example, my wife Miel places a greater value on the environmental policies engaged in by companies we have ownership in, but I'm more concerned about attitudes of management towards shareholders.After some reflection, there are several criteria you could use for judging the ethics of investing.1) It Doesn't Matter, the Market Will Take Care of It: The late Nobel prize winning economist Milton Friedman famously wrote in 1970 that "there is one and only one social responsibility of business--to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud" (1).By this Friedman articulate the lassie faire argument that the only responsibility...
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The Secret to Financial Success is...
2007-11-29 19:26:00
to avoid taking responsibility for anything that eats. At least thats the advice being dispensed by Jonathan D Pond in his new book, Grow Your Money: 101 Easy Tips to Plan, Save and Invest!We received Pond's latest from Harper Collins several weeks ago but didn't get a chance to attend to it until now. I ended up cracking the book late last night and was pleasantly surprised by the quality of the writing and advice it offered.Grow Your Money is divided into 14 chapters. Each of these addresses an important aspect of personal finance. There are chapters on accumulating real wealth, proper use of debt, improving your investment returns, minimizing your tax obligations, and making money decisions part of your healthy family life. The author is additionally a long time financial planner and writer with a long career in personal finance, so like the kids say, he's "legit".Not only is Grow Your Money an amusing read, Pond offers sound and nuanced advice. For example, he basically says ...
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Sometimes Corporations Aren't Your Friend
2007-11-29 17:04:00
I tend to be a little more pro-business than my darling wife, but here is a great example of why we need product and consumer regulation. Check it out here.Best,James
More About: Friend , Corporations , Some

The 300 Dollar Mistake
2007-11-29 00:45:00
So, in addition to being snowed under with work at the University, I came home Monday afternoon to find that I had forgotten my keys. Since my wife Miel usually has a spare set of keys, I can normally wait until she gets home - but in this case, she's in Afghanistan, so I'd be waiting a long time for her to get home. Instead, I called a locksmith. It cost $300 to have my door lock drilled and a new lock put in. Being a student, it totally blew out my budget for this month.All I can say is - geeze. I won't be forgetting my keys anytime again soon.Best,James
More About: Dollar , Mista

2008 Buying for Equality Guide
2007-11-27 13:16:00
Now that we upon the holiday shopping season, the question arises as to where to spend your money. Whether small or large, our dollars add up and show our support for those companies that we do business with.To help you in your consumer consideration - I've scaled down the full 2008 Buying for Equality Guide to some of the best of; check out the full guide for all companies listed.The companies listed here are the best of the best in the report - those that scored in the top rating of supporting equitable and progressive labor practices. Please note that I've only included brand names, as the lists are thankfully long.Where to Fill Up - BP, Amoco, Chevron, Caltex, Texaco, Shell Oil* We should note that sadly Exxon Mobile scored the worst of all gas companies. James & I currently hold stock here and I think we'll be seriously considering looking elsewhere and letting them know why.Where to Shop - Best Buy, Future Shop, Geek Squad, Magnolia Home Theater, Borders, Waldenbook...
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Congrats Mom!
2007-11-26 19:28:00
I just wanted to give a shout out to my mom and congratulate her on paying off her car!My mom's first fifty years of cars were paid off in cash, up front. This was the first car she has ever made payments on. She purchased a used but pristine red PT Cruiser in 2003 and paid it off now.While obviously it would have been excellent for my mom never to have made a car payment, I'm glad to see that she'll have that money freed up to invest in her retirement.My mom's last several cars have made it to 300k miles plus, so hopefully this will hold her until retirement and beyond. As you can imagine, I'm not in favor of leases and the like.I myself have managed to spent a great deal more on transportation via flights than by car. My first car was $300 and my sister and I shared the cost of insurance and so forth. My second car was pass down from my older sis since it had sentimental value that she didn't want to sell it. My third car was bought off of a friend for $3k and sold a y...

Perceived Progress
2007-11-25 13:37:00
I wanted to follow up on James' post yesterday with a few thoughts of my own.I find it interesting how natural it is to have a change in perspective as we reach closer to our goal. While our financial status at any time might seem like it is all a numbers game, it is far from it. Wealth and poverty, while tied to numbers, is more a matter of perspective than anything.Think back to your first paycheck and what this meant. You may look back now and see that you can spend more than that simply breathing. The same goes for what we earn, spend, and save. The reality is that for most people, the more we earn the more spend. Additionally, the more we earn and save, the less substantial this seems.Part of this has to do with general inflation in what our money can buy. Part of this has to do with the general life cycle changes, i.e. growing up, getting a mortgage, getting married, a few rug rats, etc.I find it interesting to reflect on James' financial melancholy, as it has more to...
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