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Archive for the ‘Personal Finance’ Category

The Winners In The Mortgage Mess

June 9th, 2012 No comments

If there is a takeaway from the financial crisis of the past five years, it’s this: take financial mass media with a grain of salt. Journalists exist to get the ‘story’ and that story has been to talk about all the problems in the economy. Prominent in this discussion has been the poor housing market.

When the crisis was developing early, we heard about all those explosive adjustable rate mortgages (ARMS) that would eventually catch homeowners by surprise. These fancy mortgages which were common towards the end of the bubble are in fact time bombs because the loan terms weren’t based upon typical criteria of a down payment plus a payment schedule to pay the interest and principal back. They were manipulated mortgages with lower payments (for a period) that masked the actual costs in the expectation that a future mortgage would be bought with better terms.

We don’t here much about ARMs anymore because anyone who had an ARM under normal mortgage terms is absolutely a winner in this crisis today. This doesn’t make for a good story.

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Governments Offer The Worst Financial Advice

January 31st, 2012 4 comments

When you research personal finance, it becomes evident that this topic is not exactly a black/white science but more of a grey art. For example, typical financial advice would recommend that you don’t, say, use a credit card to start a business. But, I know a few people who did use a credit card as a tool to start a business successfully. It comes down to your personality, it can work for some people. The important point is that the person was trying to ‘learn how to fish’ so it isn’t necessarily a bad idea to take such a risk. Perhaps,though, this is not for the average person.

I can argue that some things are bad advice, say, using a home equity loan to fund consumer purchases that might be open to legitimate question to others. But, I think there are some things that really are bad advice, no matter how you look at it. Here are a few things that I found from governments, no less, that are truly bad advice…
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4 Ingredients to a Successful Financial Plan

November 1st, 2011 No comments

How can you succeed with your financial plan? Consider these four ingredients below.

For many people, planning their finances can seem complicated, daunting and just plain boring. No one wants to spend too much time on it. It’s like asking: do you want to spend your vacation time on the beach or time in the car or plane getting there? Obviously, you would want to be on the beach. But, traveling to get there is still required nonetheless.

In the same way, your financial goals can be realized more successfully if you spend some time planning them. All of this advice can be summed up with a simple idea: become your own Chief Financial Officer (CFO). As an executive, you will not be expected to know all the details or even know what the answers are, but more importantly, knowing what questions you need to ask. One of the main goals of this site is to help you learn about what you need to ask so that when you do seek professional advice you can be a better executive.
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How to Use Bing! To Get Lower Airfares

August 25th, 2011 No comments

If you are buying an airfare, there are lots of sites out there to assist you. In practice I find that the majority of these sites merely aggregate the airfares you could get directly on the individual airline sites. While there is some value here, sometimes all that duplication wastes your time.

Plus, the biggest issue about buying is trying to determine when to buy! Fares change every day, so it’s hard to know when to buy and when to wait. Well, there’s help for this problem.

Enter Bing! At the travel section on Bing! is a very useful tool called Price Predictor. Along side the current fares for the airlines is a time line that shows you what the prices for the flight were in the recent past as well as a prediction of the future. Here’s what it looks like:

Using Price Predictor I was able to get this same flight for $371 earlier today. I got this message above last night and waited. As it predicted, the fare went down, then Bing! said to buy because the prediction was another increase. So, Bing! helped me save $60 on this flight.

Try it, if you are like me you will likely use it often before you travel.

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How To Buy A Cheap Airline Ticket

August 5th, 2011 No comments

There’s a lot of sites out there that help you buy airline tickets. Buying an airline ticket can sometimes seem like game of cat and mouse. Behind the marketplace there is a system that is attempting to match supply and demand, by selling tickets for the highest price the consumer is willing to pay.

The seller (the airlines) have the power when it comes to selling “normal” tickets, such as those planned weeks or months in advance. As the schedule tightens, the pricing power of the airline increases because fewer seats are available which causes the remaining demand to pay more.

Then something happens within a week of a flight: the airlines get desperate!

Unfortunately for the consumer these cheap deals are invisible to the main aggregators (such as cheaptickets.com, travelocity.com and expedia.com). These aggregators offer the ability to match your flight with car rentals as well as hotels. However, they offer the ability to get good prices only on tickets outside that last or two week before the flight. The major airlines have controlled these flights so that they are not available at the major flight deal aggregators.

In order to get these cheap deals, you need to go to the airlines directly. I’ve put together some info here for most of the major airlines.

The first thing to do to get cheap flights is to determine which airlines serve your airport. You have a better shot at getting cheap flights if you go to the airline that has a major “hub” at your local airport.

Here’s a list of the major hubs for some of the major airlines:

  • Charlotte/Douglas International Airport – US Airways
  • Washington Dulles International Airport – United Airlines
  • Dallas/Fort Worth International Airport – American Airlines
  • Detroit Metropolitan Wayne County Airport – Delta Air Lines
  • Salt Lake City International Airport – Delta Air Lines
  • Cincinnati/Northern Kentucky International Airport – Delta Air Lines
  • Memphis International Airport – Delta Air Lines
  • Minneapolis-Saint Paul International Airport – Delta Air Lines
  • Newark Liberty International Airport – Continental Airlines
  • Houston George Bush Intercontinental Airport – Continental Airlines
  • Philadelphia International Airport – US Airways

How It Works

The details may differ slightly, but these deals pretty much work the same way:

  • On Monday or Tuesday, the cheap deals are posted by the airline.
  • Buy the tickets up to that Friday or Saturday.
  • Take off on that Saturday.
  • Return flight is Monday-Wednesday of the next week.

To give you an idea of the savings involved here, I bought a Newark (EWR) to Knoxville (TYS) direct round trip flight using continental.com Specials for $130. A similar flight booked, say two weeks in advance, would cost about $650!

Where To Go

Here are the details for these major airlines.

Continental Airlines:

Flights are available for the current week only, Domestic flights only.

PURCHASE: By Friday
DEPART: Saturday
RETURN: Monday or Tuesday

Go to the Specials Here.

Sign up to Get Specials Mailed Each Week Here.

US Airways:

e-Saver Flights are available for the current week only, Domestic/International flights (rules for Domestic flights are given below).

PURCHASE: By Saturday
DEPART: Saturday
RETURN: Monday or Tuesday

Go to Domestic/International Specials Here.

Sign up To Get Specials Mailed Each Week Here

American Airlines:

Net SAAver Flights are available for the current week as well as two weeks in advance. Domestic/International flights (rules for Domestic flights are given below).

PURCHASE: By Friday
DEPART: Friday or Saturday
RETURN: Monday or Tuesday

Go to This Week’s Domestic Specials Here.

Go to Next Week’s Domestic Specials Here.

Go to This Week’s International Specials

Sign up To Get Specials Mailed Each Week Here

Delta Airlines:

Flights are available for the current week only, Domestic flights only.

PURCHASE: By Friday
DEPART: Saturday
RETURN: Monday or Tuesday

Go to the Specials Here.

Sign up to Get Specials Mailed Each Week Here.

United Airlines:

Flights are available for the current week only, Domestic flights only.

PURCHASE: By Friday
DEPART: Saturday
RETURN: Monday or Tuesday

Go to the Specials Here.

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