CSN, Book Giveaway Winners

The winners in the CSN Stores giveaway, and the financial book giveaway on PFStock have been drawn. For the CSN Stores drawing, "Annette E" will be receiving a $40 CSN Stores gift certificate from PFStock. For the book giveaway, Brandy Byrne will receive a copy of the book "Psych Yourself Rich" by Farnoosh Torabi.

Congratulation to the winners! For those who didn't win, please check back for future giveaways. Also for the 2011 Tax Tips Contest there were five winners drawn over five weeks. I have compiled a list of some of the best tax and money saving tips that were submitted by readers.

Thanks to everybody who entered. Even if you didn't win a prize, I hope that you will continue reading PFStock.

DC

Tax Tips Giveaway: Final Week

The 4th of 5 winners in the PFStock Tax Tips Giveaway 2011 is Linda Fish. She will be receiving free H&R Block At Home Online Tax Preparation. If you haven't entered the drawing yet, please the is only one more chance to do so. The deadline to enter the last drawing is this Friday, February 11.

Here are some more user submitted tax tips that I've received:

• My advice is to not lie about your income. Be honest and pay your taxes.
• If you find you owe every year and adjusting your with holdings just isn't working out make sure to take the number you owe each year, divide it by the amount of paychecks you get per year, and stick it in a high yield online savings account. I say add at least $5-$10 more per paycheck so you have a cushion. In the worst case, you will have extra savings!

Please keep your tax tips coming, and good luck to everybody who enters. This contest will run through February 11.

PFS

How to Report a Class Action Settlement

In June of last year, I mentioned receiving a $628.65 check from E*TRADE. This was the result of a class action settlement in the case of Greenberg v. E*TRADE. To give some background, the settlement arose out of allegations that E*TRADE recorded telephone calls without notifying the other party that they are being recorded. When I received my check back in June, I was surprised at the amount of the settlement.

Last week, I received a 1099-MISC form that lists the amount of $628.65 as "other income". As I mentioned in my previous post, only people in California were entitled to the full $628.65. People in other states received one-fifth of that amount or $125.73. Did anybody else get a 1099-MISC for this settlement?

The real question at this time is "How is one supposed to report this payment on their taxes?" Some readers have indicated that they've received conflicting information about how to account for this windfall. However, I believe that the correct answer is to report it as "Other Income" (This is Line 21 on Form 1040). But, I want to ask my readers if they agree that this is correct?

Disclaimer: This discussion is for information only. PFStock does not provide tax or investment advice. I encourages readers to consult with a tax adviser if they have specific questions when preparing their taxes.

DC

Tax Tips Drawing: Week 3

The 2nd of 5 winners in the PFStock Tax Tips Giveaway 2011 is "Shel". She will be receiving free H&R Block At Home Online Tax Preparation. If you haven't entered, please do so as soon as you can. Non-winning entries will be carried over to the next drawing. You only need to enter once to be included in all 3 remaining drawings.

Here are some of the tax tips that I've received so far:

• I use the internet as a tool to make sure I'm claiming every deduction and credit that I can qualify for.
• My father was an accountant and used to say the best thing was to break even every tax year and not give the government an interest-free loan of your money (by getting a refund). I know that I'd never be able to save the money otherwise so I always made sure to have plenty of tax deducted in order to get a nice refund check. Now I make that money work for me; I put some aside every year and put it into a CD.
• I make sure that I organize all year. I have folders I make in January for that year's taxes so that come tax time, I don't have to hunt for my receipts and paperwork.
• Contribute the most you can to a 401(k) plan at work.

Please keep your tax tips coming, and good luck to everybody who enters. This contest will run through February 11, with a new drawing every week until then.

PFS

$40 Giveaway from CSN Stores

CSN Stores has provided PFStock with a $40 gift certificate to give away to one of my lucky blog readers. CSN operates numerous websites that offer a variety of products ranging from furniture, cookware, and electronics to luggage. I was recently shopping for modern furniture on one of their sites. I have made purchases from CSN before, and I was quite impressed by their service and the speed of delivery. It only took one day for my order to arrive!

Anyway, I have decided to hold a random drawing for the gift certificate. You can have up to three chances to win the prize:

1) Any reader can enter by posting a comment below. My question is "What would you buy with a gift certificate from CSN Stores?" (You must post a comment to enter the drawing. If your comment doesn't show up or is caught by the Blogger spam filter, you are not entered in the drawing.)
2) For an additional entry, web site owners can link to this post, to let other know about this contest.
3) Lastly, my fellow bloggers can add PFStock.com to your blogroll (must be accessible from blog's main page) for one more entry in the drawing.



If you have a problem leaving a comment, please Email me. If the entry form doesn't show up, please cut and paste this link to go to the form directly:

https://spreadsheets.google.com/viewform?formkey=dDFHX1pnLU9ZUlVJWW51cERwYnNBZ0E6MA

Update: The promotional code that I received from CSN Stores expires on March 1, 2011. As a result, I've decided to move up the entry deadline to February 14, 2011 (Valentine's Day). This will give the winner ample time to spend
their gift certificate.

The drawing is limited to US residents. The certificate will be in the form of a promo code, and does does not cover any shipping costs. The code can be used on any product from any one of the CSN Stores. A winner will be randomly picked from among the qualified entries received by February 14, 2011. I will contact the winner by Email. Good luck to everyone who enters!

Please also check out the other giveaways that PFStock is offering. Look for "Giveaways" under the PFStock title at the top of my blog.

Finance Book Giveaway

PFStock is giving away a copy of the new book Psych Yourself Rich by Farnoosh Torabi. This is personal finance book that is geared toward people who are either in their 20s, or who have not yet established clear financial goals. Farnoosh, as she prefers to be called, departs from the formula for a personal finance book to save X amount of income and let it compound at Y% interest for Z years. Instead the text does not focus on numbers, but rather on the "psychology" of money. Rather than setting a monetary goal or a specific ratio of savings to income, Farnoosh invites the reader to personalize their definition of rich. You are asked to define "the kind of rich that leads to personal gratification."

The book explores the topics of what your philosophy and money beliefs are, and how your past shapes your relationship with money. The text is punctuated with special sections ("My Story") where the author narrates an event that occurred in her life or in the lives of people she has met. In describing her being laid off from TheStreet.com, Farnoosh reflects that a full-time job is no guarantee, and that one should hope for the best and prepare for the worst. (Having been downsized twice in the last decade, these are ideas that I can personally relate to.)

Farnoosh goes on to ask the typical job interview question of "where you want to be financially five years from now?" The book concludes with to a to-do list of ideas that she believes one can use to build financial independence.

Psych Yourself Rich: Get the Mindset and Discipline You Need to Build Your Financial Life by Farnoosh Torabi is available at Amazon.com and other book stores. It is published by FT Press, and the retail price is $22.99. But here is your chance to win a free copy in this PFStock Giveaway:

I will hold a random drawing for the book. The entry deadline is February 18, 2011. In order to enter:

1) Any reader can enter by posting a comment below. Choose any topic, but I will suggest the question "Where do you want to be financially 5 years from now?"
2) For an additional entry, web site owners can link to this post, to let other know about this contest.
3) Lastly, my fellow bloggers can add PFStock to your blogroll (must be accessible from blog's main page) for one more entry in the drawing.

You can enter up to three times using the the form below:



If the entry form doesn't show up click here to go to the entry form directly.

The drawing is limited to US residents. Visit farnoosh.tv for more info about Farnoosh Torabi and her book. A winner will be randomly picked from among the qualified entries received by February 18. Also, if you haven't already entered the 2011 PFStock Tax Tips Giveaway to win free tax software, you can do so here. Good luck to everyone who enters!

Guest Post: Sustainable Merchant Accounts-Which One is Right for You?

Choosing a merchant account for a small business or personal online storefront is a delicate task. It can mean the difference between success and failure of a company. A merchant account is an account created for online retail business or physical storefronts that allows for the acceptance of credit cards online for business transactions. Before you decide on which merchant to handle your credit card processing, it’s best to research companies that can understand and comply with all your ecommerce needs. This is especially important if you are starting a small business and financing your company with personal funds or investment accounts. Find a company that will grow with your business and offer you the freedom to contribute to and assist you in increasing your sales by providing you with options.

You want a company that is experienced in handling both physical storefronts and online retail transactions. As a general rule of thumb, most banks only offer merchant credit card processing to physical storefronts. If you find a bank that is willing to provide you this service, they usually come with high percentage transaction fees. Research how different account merchant providers handle different situations and be familiar with their rules. This will allow you to make the best informed decision and compare companies based on a number of factors such as customer service, high-tech payment solutions and chargeback management.

There are a myriad of different options that merchant account holders need to decide. For example, real-time processing allows you to combine your merchant accounts and payment gateway directly into your website. You can also opt for a virtual terminal. This gives a business the option of manually processing a transaction with their merchant accounts from any PC that offers internet connections. All you need to do with virtual terminals is login into a secure website with a password and username and you’re off to the races! With a virtual terminal, companies can authorize or process any payment transaction at their leisure and in addition your business can keep a log of all merchant transactions and orders.

The final decision is whether your personal small business needs a point of sale software. Point of sale software will afford companies the addition of card readers that connect to phone lines or high speed internet connections and are definitely a popular choice among a lot of mail order businesses. Choosing wisely is critical in avoiding downgrade fees, high percentage yields, interchange rates and chargeback’s. It’s okay for your personal business to take risks, but don’t cut corners with major decisions such as picking a merchant account company.

About the Author
Tiersa Buckley is a personal finance writer for both www.CreditCardProcessing.net and www.Stocktrading.net. Both of her blogs offer tips and daily advice for putting your business and personal investments into overdrive.

Tax Preparation Software (Tax Year 2010)

Last week, I received a copy of H&R Block At Home tax preparation software for tax year 2010 in the mail. I have noticed that if you register your copy of either TaxCut or TurboTax with the manufacturer, they will automatically send you a CD-ROM with their software for the following year. H&R Block did this again. If you get one of these package in the mail, don't be fooled into thinking that you are getting something for nothing. Usually, you aren't aware of the cost of the software until you insert the CD-ROM into your computer and read through the fine print. This time, H&R Block was a little more transparent about the pricing. It printed "Only $34.95" on the front of the DVD case that it came in. But, for most people the $34.95 version of the software will not be adequate for their needs. Expect to spend at least $45 if you plan on filing a state tax return.

This year the H&R Block At Home CD-ROM that I received in the mail did not include a $10 rebate coupon for store purchases of their software. Nevertheless, it usually ends up being cheaper for me to buy this tax software through a retail store (such as Amazon.com, Best Buy, or Office Depot) rather than installing the version I received in the mail. In the past, I've also noticed that some retailers will offer a free gift card or anti-virus software with purchase of any tax software, so I will usually hold out until I see a similar deal.

As far as tax software is concerned, I have always used the Deluxe or Premium "desktop" version of the tax software, which includes the state version of the tax preparation software. This year, H&R Block At Home has adopted the TurboTax naming convention for their products (i.e., Basic, Deluxe, Premium, and Business).

Tax Preparation Software pricing for Tax Year 2010.

TY 2010 Product	Basic	Deluxe w/State	Premium w/State	Business w/State
Block At Home	$20	$45	$65	$80
TurboTax	$30	$60	$90	$100

Both Block At Home and TurboTax offer a "Deluxe" version that does not include state tax preparation for $35 and $50, respectively. So, it works out to be $10 cheaper to go without the state. However, this version is NOT recommended unless you live in a state without state income tax. The prices quoted here are the list prices and are subject to change. In fact, I can practically guarantee that these prices will fluctuate throughout the tax season.

I also want remind readers that TurboTax is offering to answer tax questions for free. Here is a link to the Intuit offer from TurboTax. My main criticism about this offer is that it is only good until the end of January 2011. H&R Block offers the Get It Right Community where users can ask tax questions which are typically answered by one of their tax professionals.

For a chance to win free tax preparation software, please enter the PFStock 2011 Tax Tips Contest. There will be 5 weekly drawings in this giveaway for online tax preparation from H&R Block At Home.

Lastly, below is the same table as above with the current Amazon.com pricing for each of the software titles I've mentioned.

Current Amazon.com Prices for Tax Software.

Basic	Deluxe w/State	Prem. w/State	Business w/State

Note to Commenters: If you represent a company such as Intuit, H&R Block, Microsoft, Amazon, etc., please leave your contact information or send me an Email (my Email address is listed in the sidebar) to let me know that you left a comment. If I cannot determine that your comment is authentic, it will be deleted.

DC

Guest Post: First Generation White Collar

Today's guest post was written by PF blogger L. Marie Joseph. She has recently published the book First Generation White Collar: A practical guide on how to get ahead and not just get by with your money. As a fellow blogger, I have corresponded with Marie for nearly four years and have gotten to know her through her blog, Moneymonk. It is my pleasure to present her guest post on PFStock.

In the excerpt below, L. Marie Joseph discusses her views on Housing:


So now you’re making a great salary and have a college degree under your belt. Now your eyes are getting bigger. You want a house! That apartment you have is starting become a prison cell.

A home is usually the biggest expense we have. That being said, try your best to qualify for a mortgage that has a fixed rate, you don’t want any surprises down the road. You want to also have a payment that is under 30 percent of your income. You know this is going to be your biggest expense, so try to make it as low as possible. Your loan should also be limited to a fifteen- to thirty-year debt sentence.

For example if your take-home pay is $5,000 a month, your monthly house payment should be no more than $1,500 a month. So let’s not get house fever and buy something $2,000 a month because it looks better. Get what you can afford! You want to be able to pay for house payment AND save and invest comfortably. Not just pay your house payment and expenses. You always want to build wealth while you are paying your home off. Stick to renting if your payments will be more than 30 percent of your income. You do not want to own anything that will jack more than 30 percent of your income.

Ideally, you’re the price of your home should be two and one-half times your salary (two times if you want to be wealthy). Don’t fall for what the mortgage company tells you can afford. They do not know your personal situation. Divorce, sickness, and layoffs can all happens during the life of the loan. Always think of these factors when agreeing to a contract for so long. No one is immune to Murphy’s Law. Mortgage Brokers will not discuss these issues with you. It is your responsibility to education yourself.

"Education is when you read the fine print. Experience is what you get if you don’t."
-Pete Seeger

So if you make $50,000 a year, and the mortgage company approves you for $200,000 —RUN. This is four times your income, and you cannot afford it.

Depending on where you live, this can vary; I have friends in Washington, DC, and New York, and they cannot comfortably make this happen. If you live in a large, high-expense state, such as California or New York, your percentages may be slightly different.

Interest only and adjustable rate mortgages (ARMs) should always be avoided. ARMs almost always adjust higher not lower. You should always get a fixed-rate mortgage. You don’t want any surprises down the line.

Rule of thumb:

• Take out a fifteen- to thirty-year mortgage
• Make sure the payment is under 30 percent of your income, if you want to be wealthy.
• Having a mortgage payment that’s below 30 percent of your household income gives you more room to save and invest.
• Seek financing through a credit union or your local community bank.
• Interest only and ARMS mortgages should be avoided.

About the Author
L. Marie Joseph is the author of First Generation White Collar. Visit her blog and you can also follow her on twitter.

Moneymonk had a post offering a free Apple iPad drawing to people who purchase her book. However, that offer has ended. Sorry for the inconvenience.

2011 Tax Tips Contest

The folks at H&R Block have provided me with 5 online codes, each of which can be redeemed for H&R Block At Home Premium Federal Online Tax Preparation (a $50 value), to give away to lucky blog readers. H&R Block At Home was formerly known as TaxCut. This giveaway is for an (Tax Year 2010) online version of H&R Block At Home. While federal tax preparation is included in the prize, state returns are not included ($34.95 extra cost). For the purposes of preparing federal tax returns, this online software should be adequate for nearly all taxpayers to complete their own taxes. Although the software includes free federal e-file, you may have to pay extra if you want to also efile a state return.

I have decided to hold a random drawing each week (awarding one code per week) for 5 weeks for the software codes. The first drawing will be on January 14, 2011 and continue weekly until February 11, 2011. In order to enter:

1) Any reader can post a comment below describing your best tax or money saving tip.
2) For an additional entry, web site owners can link to this post, to let other know about this contest.
3) Lastly, my fellow bloggers can add PFStock to your blogroll (must be accessible from blog's main page) for one more entry in the drawing.

You can enter up to three times using the the form below:



If the entry form doesn't show up click here to go to the entry form directly.

Note that this drawing is for an online version of the H&R Block At Home Software that requires Internet access. If you do not feel comfortable with using the Internet to prepare your taxes, I would suggest purchasing H&R Block At Home 2010 on CD-ROM. Unfortunately, I don't have any CD-ROM versions of the software to give away but it is available in many stores such as Amazon.com.

The drawing is limited to US residents. Visit H&R Block for details about the online software. Winner will be randomly picked from among the qualified entries received by February 11. Winners will receive an online key code by Email to access the H&R Block website. The "key code" works like a gift certificate and is used on the payment screen before your taxes can be filed. In order to prepare taxes online with H&R Block, you will be required to create an account on their website. Good luck to everyone who enters!

DC

This promotion is held in conjunction with PFStock.com.
Note: H&R Block At Home provides tax preparation software. It is up to the individual winners to determine the suitability of this software for their tax situation. PF Stock does not provide tax advice or technical assistance. Contact H&R Block Customer Support for help with their tax preparation software. Opinions expressed here are those of PF Stock.

Guest Post: How is My Property Assessed?

Are you wondering exactly what it is that happens when your property is assessed? It's a question that many people preparing for their first inspection may worry about and one that can easily be answered.

What Happens When Property is Assessed?
The property assessment process is one that is often steeped in mystery to people trying to sell (or buy for that matter) home. Everyone wants a property to assess well but the actual technique and tactics involved prove elusive to many curious onlookers.

The assessor will come to your home and perform a thorough inspection of the inside and outside of your home. He or she will take note of various property characteristics that buyers may or may not connect with or find appealing. He will then make a determination of the value of your home based on his findings including the good and the bad about your home. It generally takes about two working days to receive the report with the inspector's findings.

How do Assessors Determine Worth?
First of all, you shouldn't be worried about their determination of worth. It is a very narrowly defined scope that allows them to assign one value to a home over another home. It is not a reflection of the worth of the home on an emotional level. They use a formula that enables them to find the value of your home on the market right now or within the next 90 days based on other, very specific criteria.

There are many who believe that evaluating or assessing property is one part art and one part science. There is a little bit of intuition that comes into play. The best or closest evaluators are often those who have been in the business for quite a while and have a "feel" for neighbourhoods, homes, and the people in certain areas. These assessors are usually able to gauge the value a home will sell for within a 90 day window very accurately.

Key Elements Assessors Inspect
In addition to the general condition and state of repair (or lack thereof) of a home, inspectors also take note of the size of the land the home is on, the neighbourhood and its proximity to services, accessibility of the home, condition of the home, architecture of the home, size of the home, and features that may be unique to the tastes and interests of the current home owners but may not exactly be mainstream tastes and interests.

Your home inspector is probably going to open doors and drawers, peak through closets, find cobwebs in the corner and dust bunnies beneath your beds. It is the job of the assessor to inspect the home inside and out for positive features and potential problems. Some inspectors may help you discover problems that can be easily fixed today but might be major problems tomorrow if left alone.

Comparing Properties as Part of the Assessment Process
No one really likes to be compared to another person. It's just as hard to listen as your property is compared to another. However, most property assessors will pull the information from a comparable home in the neighbourhood or area that has sold recently and compare the condition, state of repair, land mass, and features of your home with the other to decide if your home should have more value, about the same amount of value, or less value than the other home in question was sold for.

Home inspections or assessments may sound big bad and scary but they are very important in setting the value for your home when it comes to selling your home or even when refinancing your home for a more favourable interest rate.

This is the perfect opportunity to make all the little repairs you've been putting off and get your home neat and clean prior to the inspection so you can enjoy even better results!

About the Author
This article was written by William. In between surfing, cooking and supporting his favourite football team Liverpool, William writes for a home loan comparison service Home Loan Finder. Visit the Home Loan Finder website to compare home loans for more tips and guides on property valuation.

Citibank 7-Eleven Free Coffee Coupon?

When I received my most recent Citibank statement, it included an advertisement (which they refer to as a "marketing notice") for ATMs at 7-Eleven stores. The ad says that Citibank customers can get cash from 7-Eleven ATMs without paying any ATM fees. At the bottom of the advertisement was a coupon good for a free small coffee from 7-Eleven (expires Dec. 31, 2010).

This got me wondering that if I had previously signed up for Citibank paperless statements, then I wouldn't have received a statement in the mail. Therefore, I would not have received this free coffee coupon. It is merely a curiosity of mine, but do people who only have online statements get the free coffee coupon mailed separately? Or do they lose out on the deal?

DC

Final Results for Net Worth Poll

For several months, I've been conducting a net worth survey in the sidebar of the PFStock blog. The poll is now closed and the final results are in. A total of 73 readers have voted on this poll. So without further ado, here are the reader poll results:

Net Worth Survey: What Is Net Worth

Net Worth	% of Readers
Negative	4%
$0 - $19,999	4%
$20,000 - $49,999	8%
$50,000 - $99,999	4%
$100,000 - $249,999	19%
$250,000 - $499,999	17%
$500,000 - $999,999	17%
Over $1 million	24%

Note that the percentages do not add up to 100% due to rounding. From these statistics, I found it interesting that a large percentage of my readers fall into the higher net worth categories. Over 75% of PFStock readers have a net worth greater than $100,000. Does anybody want to share their insights on this data?

From my last survey on annual income, I had calculated that the average median net worth of PFStock readers was over $500,000. However, the results of this poll show that the median is actually between $250,000 and $500,000.

If you've read this far, please participate in the annual income survey in the sidebar of my blog. Also, please leave a comment on this post: How much do you make?

Additionally, here are some additional related posts:
Annual Income Survey (2/10)
Net Worth Update (8/09)
Net Worth Comparison (6/08)
Are You Wealthy? (3/08)
Calculating Net Worth (9/06)

DC

Tax Questions for 2010

Like Christmas time, tax season seems to start earlier every year. I just received a note from the PR folks at Intuit (TurboTax) letting me know that they are once again offering to answer personal tax questions for free. I guess it is time to start thinking about 2010 taxes. I have been using computer tax software to prepare my taxes since 1996, and I plan to do so again this year. Once again, the two main contenders are TurboTax and H&R Block At Home (formerly known as TaxCut). I have not yet decided which of these software products I will use.

Anyway, the point of this post is that TurboTax is again offering to answer personal tax questions for free. They have IRS-Enrolled Agents and tax preparers available to help you with your tax question. To get started, you need to submit your question through their website: www.freetaxquestion.com. A tax advisor will research your question and give you a phone call to discuss your tax issue. Questions about this offer should be directed to TurboTax Support.

There are a couple of catches to the offer. First, it appears that their hours of operation are 8am to 5pm PST, Monday to Friday. Second, this free offer is only valid through January 31, 2011. So, you need to be organized enough to know what tax question you want to ask before then. My criticism here is that the average person doesn't even get started with their taxes until February or March. By that time, it will be too late to take advantage of this free service. After January 31, TurboTax will charge $39.95 for this advice. In the past, H&R Block had a similar free offer, but I have not heard if they will be offering that service again this tax year

Getting back to tax preparation software, last year (tax year 2009) both TurboTax and H&R Block provided me with evaluation copies of their tax software. So, I prepared my taxes twice: once using H&R Block At Home, and again using TurboTax. Without going into a lot of detail, the end result of using either programs was identical. My recommendation is if you have used TurboTax in the past and were happy with the end result, you should probably stick with that choice. On the other hand, if you used H&R Block At Home (or other tax software) and found that to be satisfactory, you probably won't gain much in switching to TurboTax. I have found that TurboTax usually ends up costing a little bit more than the equivalent competitive tax software.

Note to Commenters: If you represent a company such as Intuit, H&R Block, Microsoft, etc., please leave your contact information or send me an Email (my Email address is listed in the sidebar) to let me know that you left a comment. If I cannot determine that your comment is authentic, it will be deleted.

DC

Money Market Rates 11/10

Here are the latest money market interest rates of the banks that I've been tracking on my blog. Note that these rates are sorted by APY, and represent institutions that I have accounts at, or have otherwise mentioned in my blog:

1.25% Discover Bank Online Savings
1.20% Ally Bank Online Savings
1.20% Shorebank Direct Online Savings**
1.10% HSBC Advance Online Savings
1.10% ING Direct Orange Savings
0.65% Citibank Ultimate Savings
0.65% Western FCU Money Market
0.40% Chase Plus Savings
0.30% E*TRADE Complete Savings
0.14% PayPal Money Market*

NOTES: *The PayPal Money Market fund is NOT FDIC insured.
**On August 20, 2010, ShoreBank was closed by regulators, and the Federal Deposit Insurance Corporation (FDIC) was named Receiver. Accounts were transferred to Urban Partnership Bank of Chicago. The FDIC has issued a press release regarding this matter.

Rates are believed to be accurate as of 11/4/10. I did not include banks that had special, or introductory rates in the list because they are not ongoing interest rates. I am also not including non-liquid accounts such as CD's in the list. By a small margin, Discover Bank has the highest interest rate of the banks that I'm tracking.

I want to acknowledge that Barbara Friedberg recently mentioned my post Pay The Early Withdrawal Penalty on her blog. In this post, I discuss the strategy of opening a long-term, 5-year CD with a low early withdrawal penalty as an alternative to keeping your cash in a money market account. If you are searching for a higher savings rate that might be something to consider.

So, that is the latest list of money market rates. Please let me know if you know of any higher interest rates.

DC

Guest Post: A Graceful Exit-How to Sell an Investment Property

While is usually considered wise to hold on to an investment property for as long as possible, there are certain instances when it is a good idea to sell. Here are some of the cases where selling might be a good idea.

1. Capital Growth
If capital growth hasn't been considerably higher than inflation for at least five years then the asset is no longer worth it and should be sold.

2. Decline in housing demands
If there has been a long-term decline in the demand for housing in the area, selling would be your best choice. There is a good chance that your yield on rental income and capital growth could remain negative for a long time. This would mean that the rise in vacancy rates would mean you would have to service a property loan and it would not be possible to make a claim for any tax deductions.

3. Near retirement
Another time when it would be a good idea to sell an investment property would be when you are getting close to retirement and want an income stream that is ongoing, consistent and also unencumbered. In this case it would be a good idea to go through your portfolio and keep any consistent income performers.

The cost of trading property
It can cost a lot of money to do property trading. Transaction costs can be as high as 10% and you will also have to pay the tax for capital gains. The amount of time that you have been in the real estate market should be maximized whenever possible so that a compound effect can take place.

You should never sell a property when the LVR (Loan to Value Ratio) is under 60% because once it reaches that level you will start to see a positive or neutral cash flow. From that point on, you will be able to enjoy the true income benefits that come with an investment property.

Even if the property value has doubled, it does not necessarily mean that the value will not continue to rise. This is the point where some investors choose to sell and this is usually not the best decision since the rise in value may continue for some time.

Selling because of need
There are certain things to avoid so that you don't end up having to sell due to poor management. Here are a few things you can put in place right at the beginning to make sure that everything goes smoothly down the road.

1. Always have the right insurance
You will need to have landlord insurance and if you have high gearing then you could also get some insurance for income protection. By having the proper insurance put into place you won't have to sell out if anything goes wrong.

2. Always have a plan B
Figure out what would be the worst thing that could happen and plan for it. An example of this would be a vacancy for an extended amount of time. If you plan ahead and know how to handle any problems before they happen you'll be well armed and will not be put in the position where you need to sell in a panic.

3. Look into the future.
What is your cash flow going to be in the future? You should consider future capital gain along with the rental returns you are receiving today, and always create a buffer. Figure in all of the costs that you will have to pay for the five years that follow and have a buffer put in place so that you don't end up selling if you don't really need to.

Having an exit strategy in place should be a key part of investing in the property in the first place. As long as you have created enough buffer and have planned for any shortfalls, you will be able to sell when you want to, not because you need to.

About the Author
This article was written by William. William writes about saving money, property investment and real estate for a home loan comparison service.

Two New Blogs for the Blog List

I recently added two very interesting personal finance blogs to my blog list. The first one is Investrepreneurship written by Justin Teo. Justin is also the author of a recent guest post about the stock True Religion Apparel, Inc. (Nasdaq: TRLG) on PFStock. Justin told me that he is from Malaysia, and I am glad to have the international exposure for PFStock.

The next addition to my blog list is Smart Money Guide written by Leakkhena Ung. She is from Sydney Australia. So, I'm glad to have these additions to my blog list. I regularly read posts in my blog list, and it is automatically updated with the most recent posts at the top.

A few other PF blogs are listed on my Links page. Some bloggers have inquired why their blog is listed on the Links page rather than on the blog list.

Guest Post: Are Hotel Rewards Credit Cards Worth It?

As we all know, there are a plethora of reward cards on the market. Those that give cash back and airline miles tend to be the most popular, but what about hotel rewards credit cards? Are their rewards worthwhile? To find out, consider the following:

Do you always stay at the same hotel chain?
Hotel rewards credit cards are typically associated with a specific hotel chain. For example, there is the Marriott Rewards Visa, Starwood American Express, Choice Privileges Visa, and so forth.

With these, any rewards you earn can only be used at the card’s affiliated hotel chain. So if you always stay at Marriott, for example, then their card might be worth looking into. But if you find yourself staying at different chains all the time, then it probably wouldn’t make sense to get a credit card that’s only affiliated with one of them.

How much will you be charging per year?
With the exception of the Choice Privileges Visa and the Best Western MasterCard, almost every hotel credit card on the market charges an annual fee. Fortunately it’s not that much – usually around $45 to $65 – but it’s still something you need to take into account.

Let’s say your card had a $65 annual fee and the rewards were only worth 1 penny per dollar spent. If that were the case, that would mean the first $6,500 spent each year would just go towards breaking even on the annual fee. So it’s important to weigh your expected spending, the rewards, and the annual fee to see if a card is worth it.

How does the rewards program work exactly?
Of course the most important thing is the rewards program, but get out your calculator to figure out if they’re really worthwhile.

Take the Choice Privileges card; it gives 2 points per dollar spent which sounds nice at first (most people assume that would mean 2% on spending). But allegedly, the value of these points may only be worth as little as 0.6 to 1.0 cents each when you redeem them. The online source which claims this got the figure by comparing how many points it would take to get free rooms, compared to the price if you simply paid for the same rooms with cash. So make sure you take a close look at what your points will actually buy you before you apply for a hotel rewards credit card.

Do you want the ability to exchange points for airline miles?
The high-end hotel credit cards give you the option of converting reward points into airline miles. If this is something you plan on doing, make sure you pay attention to each card’s conversion formula. Only the Starwood American converts on a 1 point = 1 mile basis. The others penalize you big time. For example, with the Hilton credit card, 6.7 points = 1 mile.

What other perks does the card give?
Hotel rewards credit cards often give perks like free room upgrades, free breakfast, late checkout, and more. If you stay at their hotel frequently, those perks alone may be worth the annual fee.

Some cards also offer special benefits outside of the hotel. For example, the Best Western card includes an AAA basic annual membership; this gives members discounts at restaurants and various attractions. Benefits like these are something to take into account when trying to decide if a card is worthwhile.

What are the online credit card reviews saying about them?
There are a number of websites which feature credit card reviews. Check out the user-submitted comments to see what people are saying about a given card. Sometimes, a credit card may look good on the outside, but you may research it and find out that there are a lot of complaints about bad customer service or some other problem.

Conclusion?
If you travel frequently and often stay a specific hotel chain, it may be worth checking out their credit card if they have one. But just make sure you do your research to determine if the rewards and benefits truly outweigh the annual fee.

About the Author
This guest post was written by Michael from Credit Card Forum, a social media site for credit card reviews and discussion. He regularly writes on the site’s credit card blog and also assists with forum moderation.

Guest Post: Why You Should Have An Online Savings Account

The whole idea of online bank may appear quite eerie to many people. What is an online bank? How can a bank operate without any physical entity or even an ATM? Such questions cross our minds when we discuss stuff like online bank. Well, an online bank is a banking institution that operates only on the internet; you need to transact either on the internet or over telephone.

The older generation accustomed to the safety vaults of normal banks may cast skeptical glances at it. But, the concept of online banks is gradually becoming a great hit among the net-savvy youngsters. If the absence of a physical bank location is a reason not to put faith in online banks, then there are plenty of reasons why you should have a savings account in an online bank. Wondering how? Then take a look at the following:

• Higher interest rates: Having a savings account in an online bank can be quite lucrative. They usually offer higher rates of interest than the normal banks. Online banks can afford to give your more interest because they do not involve added costs of maintaining branches and teller facilities. The lower overall operational costs allow the online banks to offer you some tempting interest rates.
  
• User friendly websites: Online banks have very sophisticated websites, where you can perform all the banking transactions easily. They usually get upgraded and user-friendly features built into the website to help you pay your bills, make instant or scheduled money transfers, change your account information and also create or close accounts as simply as possible. The more features they can incorporate, the fewer staffs they require to handle telephonic operations.
  
• Lower charges: Most online banks charge you no maintenance fees and minimum balance fee for your accounts. Some banks even do not charge anything for opening an account. So, banking gets really inexpensive and super easy with online banks.
  
• Your money is safe: The absence of a physical entity should not make you feel that online banks are unsafe. In fact online banks are Federal Deposit Insurance Corporation (FDIC) insured, which means your money is in safe hands. Online banks are as safe as their brick and mortar counterpart. While in other investment options you need to take higher risks for higher profits, online banks will spare you such risks. Moreover, the FDIC is great assurance for the consumers.
  
• Separate savings from expenses: If you are one of those kinds that do not want savings accounts to be easily accessible lest they end up spending more, then an online bank is just your cup of tea. Since online accounts provide no teller or ATM facility, your savings are not available at your fingers. And this could prove a great way to keep your savings from getting encroached by your spending sprees.
  
• Automate your savings: Online savings account is a great way to automate your savings. You can have a certain amount automatically deposited into your online account from an attached account regularly. Recurring savings thus becomes quite hassle-free with online banks.
  
• Time Saving: The best part of an online bank is that it is superb time saving banking option that allows transactions in as less time as possible. You can open an account and get your transactions performed within a few minutes.
  

Now if that seems convincing and you are already thinking of opening an online savings account, then you are just a click away from it. All you need to do is search online to find out an online bank that best suits your circumstances and get on with an online savings account. And then savings will be more fun, profitable, easy, secured and superbly time-saving!

About the Author
This guest post was written by "Jack Reed". He writes on various financial topics with a special focus on bankruptcy. If you are interested in writing a guest post, please contact PF Stock at the Email address listed in the sidebar.

We are the Super Rich

My post about annual income and net worth was recently referred to in the comment section of another post titled Pity the Poor Couple Who Make $450,000 Per Year (Yet Another Failure of Our 'Elite' Educational System) on a blog called Mike the Mad Biologist. The commenter used the data from my post to declare that "the median net worth for people making more than $150k/year is $1.1 million." Ordinarily, I would not consider this to be a notable event since a few of my posts are frequently referenced by other websites. However, this post has over 60 other comments on it, and I wanted to find out what all of the hubbub was about.

It turns out that this post was a reaction to a blog post originally written by Professor M. Todd Henderson of the University of Chicago Law School. The original post was available on the blog Truth on the Market and had received over 400 comments. However, the author deleted the original article and has decided to get out of blogging all together. This left me even more intrigued as to what was said in the original post to start off this firestorm. So, I started a search for the original text.

Fortunately, I was able to retrieve an original version of the post and have included it below. Before I reproduce that post here, I wanted to say that I think Prof. Henderson's point of view is that President Barack Obama's plan to increase taxes will impact those who are in the lower end of the high-income tax bracket (i.e. making more than $250k per year) and those who are in a situation similar to his. It is clear that the author's family will feel the squeeze since they already have "less than a few hundred dollars per month of discretionary income" to spend. It seems that any tax increase will force the Hendersons to trim some expenses. However based the comments I've seen, I think that few readers will empathize with Prof. Henderson.

Here is the original article:

We are the Super Rich, posted by Todd Henderson on September 15, 2010 (Truth on the Market)

The rhetoric in Washington about taxes is about millionaires and the super rich, but the relevant dividing line between millionaires and the middle class is pegged at family income of $250,000. (I’m not a math professor, but last time I checked $250,000 is less than $1 million.) That makes me super rich and subject to a big tax hike if the president has his way.

I’m the president’s neighbor in Chicago, but we’ve never met. I wish we could, because I would introduce him to my family and our lifestyle, one he believes is capable of financing the vast expansion of government he is planning. A quick look at our family budget, which I will happily share with the White House, will show him that like many Americans, we are just getting by despite seeming to be rich. We aren’t.

I, like the president before me, am a law professor at the University of Chicago Law School, and my wife, like the first lady before her, works at the University of Chicago Hospitals, where she is a doctor who treats children with cancer. Our combined income exceeds the $250,000 threshold for the super rich (but not by that much), and the president plans on raising my taxes. After all, we can afford it, and the world we are now living in has that familiar Marxian tone of those who need take and those who can afford it pay. The problem is, we can’t afford it. Here is why.

The biggest expense for us is financing government. Last year, my wife and I paid nearly $100,000 in federal and state taxes, not even including sales and other taxes. This amount is so high because we can’t afford fancy accountants and lawyers to help us evade taxes and we are penalized by the tax code because we choose to be married and we both work outside the home. (If my wife and I divorced or were never married, the government would write us a check for tens of thousands of dollars. Talk about perverse incentives.)

Our next biggest expense, like most people, is our mortgage. Homes near our work in Chicago aren’t cheap and we do not have friends who were willing to help us finance the deal. We chose to invest in the University community and renovate and old property, but we did so at an inopportune time.

We pay about $15,000 in property taxes, about half of which goes to fund public education in Chicago. Since we care the education of our three children, this means we also have to pay to send them to private school. My wife has school loans of nearly $250,000 and I do too, although becoming a lawyer is significantly cheaper. We try to invest in our retirement by putting some money in the stock market, something that these days sounds like a patriotic act. Our account isn’t worth much, and is worth a lot less than it used to be.

Like most working Americans, insurance, doctors’ bills, utilities, two cars, daycare, groceries, gasoline, cell phones, and cable TV (no movie channels) round out our monthly expenses. We also have someone who cuts our grass, cleans our house, and watches our new baby so we can both work outside the home. At the end of all this, we have less than a few hundred dollars per month of discretionary income. We occasionally eat out but with a baby sitter, these nights take a toll on our budget. Life in America is wonderful, but expensive.

If our taxes rise significantly, as they seem likely to, we can cut back on some things. The (legal) immigrant from Mexico who owns the lawn service we employ will suffer, as will the (legal) immigrant from Poland who cleans our house a few times a month. We can cancel our cell phones and some cable channels, as well as take our daughter from her art class at the community art center, but these are only a few hundred dollars per month in total. But more importantly, what is the theory under which collecting this money in taxes and deciding in Washington how to spend it is superior to our decisions? Ask the entrepreneurs we employ and the new arrivals they employ in turn whether they prefer to work for us or get a government handout.

If these cuts don’t work, we will sell our house – into an already spiraling market of declining asset values – and our cars, assuming someone will buy them. The irony here, of course, is that the government is working to save both of these industries despite the impact that increasing taxes will have.

The problem with the president’s plan is that the super rich don’t pay taxes – they hide in the Cayman Islands or use fancy investment vehicles to shelter their income. We aren’t rich enough to afford this – I use Turbo Tax. But we are rich enough to be hurt by the president’s plan. The next time the president comes home to Chicago, he has a standing invitation to come to my house (two blocks from his) and judge for himself whether the Hendersons are as rich as he thinks.

Any opinions?

DC