Tag Archives: finance

Whole-Life Fulfillment

It was back in 2016 that I had made a post talking about my life insurance policies and how such policies were considered to be a bad decision by many economic people and I argued in favor of having the policies.  I had said that at some unknown future point, my insurance would be free.  Well, I was doing some account maintenance and review because of an upcoming significant life change and guess what?  That time has come.  I’m not going to go back in time and try to determine when I actually crossed that line, but I can say in 2021, I have made more in dividends than I have made in payments.

Here’s the actual numbers involved.  I pay about $135/mo for my two insurance policies.  So far in 2021, I’ve paid $945 in insurance premiums.  Now I don’t regularly check the balance of my whole-life policy because it’s not something that really needs any attention.  I’ve checked it three times this year and in those three times, the cash value of the account has grown $1433.  If it’s not obvious, that number is larger than $945.

Insurance is a bill, an expense in your life.  You should consider it lost money.  Even more so because you’re not supposed to get any benefit out of it – it’s for other people.  Not so with Whole Life policies, there is a cash value that you can access in retirement.  Detractors say that whole life policies are savings accounts for people who can’t save, because the deposits are faked as a bill.  So what!  It works.

So if my dividends for the year were anything over $945, I am effectively in the black.  And almost being 50% above my deposits, that is a decent return.  So now that this goal has been met, let’s look a little harder at the big picture.  This should make the naysayers feel more superior.

According to records, I have had my insurance policy since June, 2007.  My payment has actually gone down a little bit as the years have gone by, but $135/mo is a fair average of what I’ve paid a month.  So, how much have I paid to have insurance all those years?  Looks like almost $23k.  What is my current cash value of the account? A little over $17k.  If I want to be slippery about this I could say I’ve effectively paid $6k for 14 years of insurance, which is about $35/mo.  My $100k term life policy is like $16/mo, so I’ve been getting my whole life policy at term life rates.

But that whole discussion is just like dealing with percentages.  It’s bullshit.  Here’s the bottom line.  I purchased insurance at a rate that was not a hardship for me.  I’ve maintained that policy for 14 years.  The policy is no longer an expense and is now an investment.  It is behaving exactly how it was sold to me.

I do not believe whole-life policies are evil if they are crafted properly by a reputable company.

No One Wants To Play Nice Together

Especially EBay.

I would say I have a love/hate relationship with EBay, but I neither hate them nor love them.  They either annoy me or pleasantly surprise me on occasion.  One of the more recent annoyances is their acrimonious split with PayPal.  PayPal is a company that I am more fond of than EBay.  I have some reservations about them, but overall, I think they do what they do pretty well.  And EBay deciding to break from them was a step in the wrong direction. 

So, EBay purchases are now handled internally by EBay.  Whatever.  It doesn’t matter to me whether EBay or PayPal charges my credit card.  However, when it comes to selling, things get a bit worse.  Previously, PayPal essentially served as "EBay Bank" and everything funding came and went through them, including selling receipts and selling costs and whatnot.  Now, selling payouts need to go to an actual bank, which is not PayPal.  And the payouts are held for a short duration before disbursement (which isn’t a big deal to me, but for some, I can imagine they’d be more annoyed).

To set the stage for the specific issues I’m having, let me describe the general problem with the seller workflow.  You sell an item.  You get the funds, but you don’t have access to the funds.  The funds will go to your bank account at some point in the future, less EBay fees.  You have to ship the item.  You have to pay for shipping using other funds.  Now, I list items with free shipping and include my expected shipping costs in the sale price (because Amazon has trained us that that is the most effective way), so maybe if I had the seller pay shipping, things would be different.  I don’t know if the cost of shipping would be in the funds held for disbursement or would be available for use to pay for shipping, but anyway, this is what I’m facing right now.

Now, here’s the problem I’m having.  I have a complicated financial configuration of accounts for the primary reason of security.  If somehow one of my internet-facing accounts gets hacked, I want my liability to be minimized.  To that end, PayPal, Venmo, and Zelle only have access to one of my savings accounts, which keeps a low balance.  And anything that I can’t use my credit card for, I use PayPal.  if I can’t use PayPal, I also use that low-balance savings account.  You see what I’m trying to accomplish here.

Back to EBay.  I’ve sold some items.  I need to pay for shipping.  For whatever reason, EBay has been charging PayPal for shipping.  My PayPal has a $0 balance, because the funds from my sales don’t go there anymore, they go to my bank account.  So PayPal goes to my savings account to get the funds.  This has been working out, but has had unintended consequences. 

I got an email today saying I have exceeded the number of monthly transfers from my savings account.  Apparently, you are limited to 6 transfers a month for online savings accounts.  Excess transfers will result in a $10 fee.  Well, that’s not going to do me any good to pay an extra $10 for $5 in shipping costs.  The solution for this is to move money into my PayPal account so I can cover the shipping costs.  But I would have to move a larger amount of money to float the future costs, otherwise, I’m not doing anything different than PayPal is already doing, and I’ll get excessive transfers.

So the bottom line is, EBay has thrown a wrench into my setup because they are not putting the funds into the same account as they are taking shipping costs from.  And if I want to avoid that, I need to float the money in PayPal instead of an interest-bearing account. 

As a stopgap, I shut down my active listing, so I don’t have any more sales until I figure out a solution.  It might be as dumb as me not noticing a payment option when purchasing shipping after a sale.  It may be resolved by a setting I changed in my seller account to use the same account for seller costs as for funds release (although that sounds odd, because EBay fees should be deducted before funds are released anyways).  In either case, I won’t know until I make another sale and in the case neither of those do fix it, I don’t want to be stuck with a $0 balance in PayPal when it happens.  So the plan is to wait until next month to relist the items and I can float some money into PayPal in advance just in case.

EBay just made it harder to make money.

BTC FOMO WTF, I Dunno

There’s plenty of talk recently about bitcoin.  It’s something I’ve never understood, believed in, or trusted.  However, I feel it’s finally come time for me to at least have a conversational knowledge of it.  I don’t fully understand it from a technical perspective, because I do know enough about that part to retain my stance that I don’t believe in it or trust it.  What I want to be able to do is explain the (or a) process of using bitcoin.  Because I expect at some point, someone if going to ask me about it and how to get into it and when I say I don’t know, they’re going to think I’m stupid, because I’m supposed to be the all-knowing geek.

I start my quest with general searches on buying bitcoin.  Obviously, you need a place to store your stupid, fake money.  You can choose to have it stored on someone else’s website.  Yeah right.  I’ve been on the internet for a very long time.  You don’t trust the fucking internet for anything.  If not on someone’s website, you can store it in software on your computer or on a dedicated storage device.  This has a parallel to password vaults.  You can store your passwords in a vault online, like LastPass or you can store them in a file on your computer, like KeePass.  I chose KeePass, and I will choose the same for my bitcoin wallet.  Step 1 sort of complete.

I choose to install one of the better known wallet apps called Electrum.  I run through the default wallet setup, storing all the security information in KeePass in a symbiotic relationship.  Ok.  I’m ready to make a purchase now.  Gonna buy some fake money.

More searches on where to buy bitcoin.  I go to the first recommended place and start the process.  I’m immediately hit with a request for ID.  I have to submit a picture of an ID, either drivers license or passport, plus a picture of me holding the document.  Are you fucking kidding me?  What did I just say, you don’t trust the fucking internet.  We’re dealing with an unregulated product here, there’s nothing ensuring any security of any kind and you want me to give you a copy of my ID?  You can fuck right off.

Further research suggests that bitcoin is getting a little more legitimacy at least in the idea that it can be taxed by the IRS.  I don’t know if that’s a good thing or not.  Mostly I think it’s not.  If eliminating the anonymous aspect of bitcoin is the price of legitimacy, I don’t know.  So I look deeper.  I find there is a way to purchase bitcoin for cash using a special ATM machine, one of which is in my city.  That seems anonymous enough (although of course any agency that wanted to, could track me down with little problem).  I’m not trying to do this in the shadiest way possible.  I’m just trying to learn more about this concept and I don’t want to expose a bunch of my personal info to untrusted websites if I’m not going to be a devotee to the cause.

I watch a video on how to use the ATM and one thing I need is a QR code for an address to send my fake money to.  Electrum has a lot of different values in it.  I wanted to send the money to my wallet, so I went to Wallet Information and generated a QR code for my wallet ID.  That afternoon, I drove to the ATM and tried to buy some bitcoin.  Unfortunately, when I scanned my QR code, the machine said I had to use a supported wallet.  Step 2 failed.

Later, back at home, I think I generated a QR code for the wrong thing.  I though your wallet ID was unique and I’m sure it really is, but your wallet holds multiple addresses in it and each of those addresses are what you send and receive the bitcoin with.  The default view in Electrum didn’t show those addresses, but when I found it, things made a little more sense.  I generated a new QR code for one bitcoin address and I will attempt to use that.

Until I get back to the ATM, I figure I will try to buy some bitcoin online anonymously.  How about PayPal?  They’ve been making noise about supporting "Crypto" (The slick marketing term for this, I guess).  I quickly find out that any bitcoin you buy in PayPal can’t be transferred to your wallet.  So essentially, you have an online wallet with them.  I love you, PayPal, but no thanks.

I find another website that supposedly lets you buy without ID.  I create an account and get to the point of purchase.  They need a credit card number.  Well, here comes that mistrust again.  Not only that, but if I give my CC number, they’re going to hit me with a cash advance fee and interest.  Fuck that, too.

After a lot of puzzling over this, I came up with a solution.  Unsurprisingly or not, it’s PayPal.  I have my PayPal linked to a savings account for cash purchases.  That account is always kept at a low balance, so in case of compromise, I don’t lose all my cash.  PayPal allows you to make a virtual CC number to access the funds in any linked account, called a PayPal Key.  There’s my solution.  Now I’m ready to go.  I return to the bitcoin exchange and place my order.  It’s about $37 for me to learn this new concept.  And when I submit the form, I’m immediately told… I have to verify my identity.  God damn it.

So after a lot more searching and a bunch of other website visits, it doesn’t seem that I’m going to get very far without IDing myself, unless I want to pay a hefty premium for person-to-person trading.  Speaking of premiums, that is something about bitcoin that annoys the shit out of me.  Everything you do has a transaction fee.  It’s like having an account with a bank that has no ATM network.  You just get dinged the more you use it.  I guess people into this stuff just accept it as a cost of business.

I tried out a couple more sites and got stopped at the "provide ID" step.  I guess the ATM method is going to be my go-to method.  Looking at the ATM provider’s website, most of their machines are in sketchy locations – gas stations, vape shops, etc.  But, they do have some in a couple hotels, which I find surprising.  One is not too far from me, along a route I’ve travelled plenty of times.  So that’s going to be my next attempt.  I’ve figured out how to create a read-only copy of my wallet on my phone, so I can generate QR codes for any of the bitcoin addresses I have in my wallet.

I arrive at the hotel and find the bitcoin ATM next to the regular ATM in their lobby.  Using my mobile wallet, I set up a buy, stuffed in $40 (because in my previous online attempts, $20 wasn’t enough for a minimum purchase), and completed my purchase.  I immediately got a text message with my purchase confirmation.  Step 2 complete, I guess.

I went to a nearby convenience store and bought some snacks.  When I got back to my car, I opened my wallet and saw I had a new transaction in my history.  It said the transaction wasn’t confirmed, but, hey, it was there!  Of course, all it says is that I owned a tiny fraction of a bitcoin.  I went online and did some quick math.  It looks like $5 of the $40 purchase went to fees.  Holy shit.  But bitcoin is nothing if not the most volatile investment out there, so tomorrow I could be up $5 or down another $10, who the hell knows.

I drove back home and opened the wallet on my PC.  The transaction was there as well and now it was displayed as confirmed – I guess 15 servers could see that transaction and that was considered good.  Now that I owned bitcoin, I had to learn how to give it away.

My whole drive home I was mildly stewing about the $5 fee I paid to get my fake money.  And it made me wonder how things worked when I went to give some away.  Who pays?  And like I said earlier, it’s a racket.  Everyone wants paid.  I came to lean that even if I’m giving fake money away, I’m still paying someone to give it.  Hw much am I giving away?  Funny enough, the answer is, it depends.  How soon do you want your payment to go through, if at all?  The people facilitating the transactions work on the ones with the biggest fees first.  If things are really busy and they don’t get to your cheap-ass fee transaction in time, well, your transaction is cancelled.  And if not cancelled, you’ll wait potentially for days and your recipient is going to be beating down your door saying, "I want my two dollars!"

There are some interesting features that exist to help this situation.  One of which involves initially setting a low fee, then allowing changes to the transaction that are all fees.  So you can be cheap at first, then increase the fee if there are no takers in a reasonable time.  Another way to use that feature is to set a low fee initially, then let the recipient change the transaction to add any additional fee if they want the money quicker.  I don’t expect I’m ever going to be doing anything like this, but it’s kind of neat to know this is an option.

I contact a friend and we go through the setup of a new wallet and I perform a "Send" of about half my balance.  I chose a moderately low fee, but since everything in bitcoin is in a totally different scale, all you can do is make some rough estimates as to how much you’re losing in the trade.  So the transaction was made and it showed up on the other side almost immediately, but it remained unconfirmed.  I left it go overnight and in the morning, the transaction showed as confirmed.  Step 3 complete.

And that’s about all the more I care to experiment with bitcoin.  I spent $40 and I have $15 left in my wallet.  I’ve seen the process of receiving and the process of sending.  I’ve seen how much you lose in fees in the process.  Bitcoin is in a decline right now, so I’m probably losing value as well.  but I can now say that I can pay and be paid in bitcoin now.  That’s pretty much all I wanted.

Look At What You Can’t Have

Every once in a while, I do a little "worst-case" scenario and determine how little I need to get by in case of, you know, the worst case scenario happening.  It’s not overly complex, it’s basically reviewing my budget and seeing how things have changed for better or worse since the last exercise.

One of the line items is the mortgage.  Almost 5 years ago, I refi’d into a 15-yr loan with a better rate and I’ve been paying a minimal extra amount on the loan each month.  So one of the things if shit really hit the fan is I would attempt to refi it back into a 30-yr so I could reclaim some of the money I’d budgeted to that bill.  I suppose some people might consider pulling out the equity in the house and surviving on that until things got better, but this is just the way I think.  Don’t give up ground, even if your progress has been slowed.

So anyway, I brought up a mortgage calculator and like a lot of nice, friendly forms, this one had nice sliders to adjust the values.  The page loaded like this.

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Well, I’m not getting a 330k loan, now or ever.  So I dragged the slider down.  And when I did, something crazy happened.  The house picture changed.

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Fucking ouch.  What a punch in the gut.  When you load the page, the site is setting your expectations with "this is what your house will probably be like" and when you eventually say, "I can’t afford that payment," you move the slider and the site says, "Well, now you’re looking at this kind of house."  No stairs.  No ornamental shrubs.  Even the tree is wimpier, suggesting you’re just a beginner.  And while that may be true, it’s not as encouraging as it should be.  Don’t focus on where you will be, focus on where you are right now – smallsville.

But I’m not looking for a loan even in that area.  The calculator doesn’t go where I need it to go, but I tried.

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Jesus.  100k and this is all you get for it.  Well, at least it’s a two story place, which I suppose might be better than what I have.  But the point still stands, getting two sad reminders of where you are, not where you’re going.  Of course, once you are faced with the reality, who isn’t going to dream a little and peek over the fence to see the greener grass?  It’s human nature.  If you feel bad, feeling worse is the easiest thing to accomplish.  Drag, drag, drag.

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Nice.  Bigger garage, columns, bigger tree, fireplace.  But I really want to feel bad.

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Sigh.  Ok.  That’s enough.

No Problems, Only Opportunities

What Millennials Can Learn From Gen X’s Money Mistakes

You can consider me a sucker for any article on generational warfare, especially one that involves mine.  So when an article immediately says I’m making mistakes with my money, I’m doubly interested.

I feel I’ve made this clear in other posts, but I really do feel sorry for generations after mine.  While the generation preceding me couldn’t care much about anything other than itself, I am embarrassed at what has been left for the younger ones to clean up, fix, or just try to survive through.  My whole generation is too small to have made any political impression or enact any meaningful change, but I’ve been waiting for the next major cohort to flex its muscle, and I expect we see things the same way.

Anyway…

This article says its a collection of advice from financial experts who want Gen Y to do things differently from Gen X – "Break the chains of financial norms that were enshrined as gospel in the last century."  Here’s the truth that overshadows the entire article: The financial norms are not norms anymore because the entire economy and financial markets got fucked.  But that’s not a problem.  Don’t focus on that problem.  Don’t bother trying to solve the problem (as if you could anyway).

The term "gaslight" is used way too frequently and usually inappropriately.  I’m not going to use it here, but it feels some would.  This article is more of the more traditional, "blowing smoke up your ass" flavor.

Point 1: Gen Y should focus on Roth accounts instead of traditional retirement accounts.  I’m not going to argue particulars, this advice can go either way.  I just want to point out that Roth IRA’s were created in 1997.  It’s not like there was a lot of information on the benefits of a Roth at the time.  And now, given time, experience, and income growth, I now contribute 100% to post-tax retirement accounts.  Because Gen X makes all the financial mistakes.

Point 2: Gen Y should give up on whatever used to be the idea of financial success.  Let me get that exact quote.

"…millennials need to reconsider the entire concept of wealth, success and financial freedom – particularly as it applies to standards that were set in a different time"

It shouldn’t take much cynicism to deduce that "a different time" means "a better time".  What example of change was provided?

"Are we sure we want a 30-year mortgage on the largest house we can possibly secure financing for to go along with our student loan debt and auto loan? … Maybe a used RV and a WiFi hotspot are more appealing than a 2,000-square-foot ranch."

And now I want to really punch someone.  I’ll give you this much.  Buying the biggest house you can get financing for is a financial mistake, worthy of the title of the article.  But to suggest that Gen Y should just literally give up on the concept of owning a house to live in a depreciating asset and have them consider that move financially savvy?  That is an even bigger financial mistake.  One that a future article will use comparing Gen Y and Gen Z.

And there’s a real trigger: "student loan debt".  Something my generation didn’t have to worry about, at least not to enslavement levels of debt like today.  Maybe a used RV is not so much "more appealing" as it is "the only option".  I’m not saying lower your expectations, I’m just saying to refine them.

Point 3: Accept that shit sucks.  Deal with it.  I would really have to copy the whole text of the two paragraphs to do justice to what is being bullshitted.  Remember, the problem the article is hiding is that the economy absolutely sucks.  Gen Y started a revolution by creating "the gig economy".  You know what the gig economy has done?  It has resulted in workers being exploited and cheapened, with no redeeming benefits.  And no benefits at all.  For every success story on a gig worker, you have a thousand who are working themselves to the bone just to get by. 

The Gen X life story? "Get a college degree. Land a job. Buy a house. Invest for retirement someday."  Their take on these universal desires?  "It’s a flawed model."  IT’S A FUCKING FLAWED MODEL.  I got my job with a Associates degree in an unrelated field.  Gen Y (and Z now) have to have Bachelors degrees to get entry level jobs.  They can’t get any job paying well enough to buy a house or to invest for retirement someday.  WHOSE MODEL IS FUCKING FLAWED HERE?

So the explanation for being flawed is that it doesn’t align with Gen Y’s priorities: "experiences over possessions, and prioritizing purpose, innovation, and flexibility".  And I’m going to say again, these priorities are due to the fact the world is garbage.  They are compensation for having nothing else.  When your world is so dead that you simply want to experience as much happiness as possible as soon as possible because you don’t expect things to be getting better in your lifetime, that’s a problem.  When you demand flexibility because you know you can’t trust any institution for stability, that’s a problem.  As far as purpose and innovation, Gen X had that as well, only it wasn’t something we had to demand, it was simply allowed.  That’s a problem.

This romanticizing of renting for life and RVing and being mobile and nomadic, that’s a symptom of the times.  It’s a necessity to survival.  You really don’t think that if circumstances were the same now as they were 20 years ago that a whole generation would behave so differently?  If anything the nomadic lifestyle would be taken up for pleasure.  If the promise of technology had not been stolen by a few obscenely rich, powerful people, we’d all be living a utopian life.

For the boomers who were flower children until the end and look around with sadness at what they were unable to sustain, I will be a nerd who will die lamenting how the Internet was supposed to bring enlightenment and knowledge and was reduced to conspiracies and trolls.  Gen Y, ponder well what legacy you wish to leave unfulfilled to the world.

All Good Things Must

be made more difficult.

To be honest, T-Mobile has been an excellent company for me.  I’ve always had decent service and they’ve never really let me down.  Some of their promotional offers have been really interesting as well.  It was a long time ago that they offered one share of T-Mobile stock for free to all subscribers.  I regret not taking the time to claim that offer now.  "Free is free" and I didn’t take it.  Shame on me.

One of their other excellent offers was a checking account with 4% interest.  Absolutely unheard of when it came out and is still unbelievable today.  Granted, it’s only 4% on the first $3k in the account and 1% on everything over that.  But even so, 1%?  How sad is it that their base rate is still higher than everyone else?  When I signed up, I had no idea how they could afford to do it and all these years later, I still don’t know how they can keep it up.

Well, that time has come.  I’m sure there are a lot of money-wise people out there that are stocking $3k in that account and nothing more.  In order to qualify for that 4% max rate, you have to have a $200 deposit every month into the account.  Of course, people are going to people, so you can be absolutely assured that lots of people keep $3k in the account, then have an automated $200 deposit in each month and a corresponding $200 withdrawal every month as well.  Totally worth it for 4% interest on $3k, I’m sure.

A bank isn’t going to make any money that way, I understand that.  And so, it’s come to this.  A new change in the way you qualify for the max interest rate.  Again, I get it.  The alternative is they just stop the offer altogether and then it’s just another nice thing ruined by people.

So anyway, what’s the change?  Instead of having the $200/mo required deposit, you now have to make 10 purchases with the check card each month.  This is logical as the bank would get a transaction fee for each purchase and those fees would pay for the bonus interest.  Makes sense to me.  The thing I don’t like is the way they are selling it to their customers.  They say:

We understand making a monthly deposit may be tough and we want T‑Mobile MONEY to work for you. So, eligible customers will soon earn 4.00% APY* by using your T‑Mobile MONEY card for daily purchases like groceries, gas, or shopping online.

They understand making a monthly deposit may be tough.  But it’s easier to make 10 transactions in a month.  If you’re making 10 transactions in a month and not making any deposits, now that’s tough.  But that’s where we’re at, I guess.  Also, it’s a little irksome that to qualify for a higher interest rate, you have to lower your balance with 10 purchases.  But, it’s their game and their rules. 

I just wish they would have been honest with the reasons.  I thought TMo used to have a slogan, "Straight talk", but it seems that’s another company.  Why can’t they just explain it in reality and not need to spin it?

So that’s that.  Now, what does this change cost the users?  Here’s my plan.  I normally get a drink from RaceTrac when I get takeout from certain restaurants.  It’s $1.07 each time.  So, RaceTrac now gets my TMo transactions.  It’ll cost me a little over $10 to earn… wait, what?  $18 in interest?  Well, it’s not like that, exactly.  I would be spending the $10 on another card regardless, so the math actually comes out that I would be losing interest on that $10, or 10 cents.  Ugh, wait, not 10 cents.  It’s 1%/12 months, so actually .0833%… 0.8 cents a month.  I fucking hate math.

Now, if you were below the $3k balance and earning 4% on your whole balance, the numbers are a little worse.  So to maximize your money here, you need to keep $3k in your account, plus whatever monthly fluctuations you have to keep you over that threshold.  And for the people who automated $200 in and $200 out, now it would be a modification of maybe $20 in and $20 out via purchases each month.  Same game, new rules.

Banks Still Gonna Bank

I’m personally sitting pretty well when it comes to my financial house.  I’ve mentioned changes I’ve made here and there and for quite some time, I’ve been satisfied with what I’ve got.  In summary, where I’m at right now is: Ally handles all my savings accounts needs.  They pay 1.6% interest (right now.  It’s been slowly dropping again.)  T-Mobile (through Customers Bank) handles my checking.  They pay 4% interest on up to $3k in my account and 1% on the rest.  That’s a pretty nice deal, especially as rates keep dropping elsewhere.  Looking at the interest rate history, we’re back where we were two years ago, after peaking in December, 2018.

So, it’s always good to be vigilant and keep an eye open for what may be better for you in your current situation.  Although this hasn’t affected me, it’s still an irrational issue for me that I don’t have a presence at a physical bank.  To repeat, I haven’t needed the services of a physical bank in many, many, years, but I still feel like I should have an account at one.  So every once in a while, I give it consideration.

An offer came in the mail from TD Bank, which opened a branch nearby me recently.  Recently – in bank years – is like in the last decade.  I’ve always been intrigued by them, and I do have a IRA account with TD Ameritrade (although I’m not sure they’re actually related), so when I saw the offer, I figured I’d investigate.  After all, they’re offering a signing bonus of $150 or $300, and who doesn’t want free money?

Let’s start with their top-tier account and see if I can get in.  No minimum deposit to open an account (I don’t even know what that means – how do you open an account with no funds?).  Monthly maintenance fee: $25.  in the old days,  that actually meant something, but now it just means you need to see if you can meet the criteria to get it waived.  It’s almost a pointless charge.  If you don’t meet the waiver criteria, you don’t get that account.  Duh.

So, to waive the fee, I need either: $5k in direct deposits a month.  Oh.  Well, that’s quite a number.  What else you got?  Keep a $2,500 daily balance.  Well, you know I had that at my last bank and it is doable, but are you going to pay me 4% interest on it like T-Mobile is?  Not likely.  Finally, I can have $25k in accounts with TD.  They didn’t mention TD Ameritrade, only loans and deposit accounts, so that could be my ticket in, if that’s the case.

I visited their "Contact" section and their immediate response options were limited to social media or calling.  I wasn’t going to call for a 5 second question, so I sucked it up and used Facebook Messenger to ping them for an answer.

While I wait, let’s see what benefits I get for my account.  No ATM fees, free money orders, cashiers checks, blah, blah.  It looks like I could have a free account…  And now "Marie" has messaged me back, with essentially a copy/paste of the text I already read.  So I have to be more specific in my question.  Is a brokerage account with TD Ameritrade considered a "deposit account"?  And the answer is: no.  TD Bank and TD Ameritrade are separate and their accounts don’t count towards each other.  So TD Bank is not for me.  And it didn’t offer anything compelling anyway.

But, let me jump back just a little bit.  When the TD Bank first opened in my area, I remember being impressed with their choice to have banking independent from investment.  I thought it was the proper thing to do, unlike what, say, Wells Fargo does (as if WF does anything properly).  I still do think that.  But, after looking into their service offerings, I’m just not their target audience.  There are better deals from online banks and the benefits of being physical just aren’t there.  And maybe, maybe… I could be convinced that having my banking under the same umbrella as my retirement investment account is a good thing, then maybe things would be different.  But right now, I think keeping things apart is best, especially in the growing swell of deregulation and financial insanity.

Class Action Pennies

A couple of years ago, I wrote about a class action lawsuit in which I was a participant.  The end result of that was me dropping out because I had to provide proof of my involvement, which I could have, but it was more effort than I wanted to expend for my “up to $900”, but realistically more like $5 award.

And now today, I get an email about the Yahoo security breach class action lawsuit.  Oh boy, this should be expensive.  Scanning the email quickly for numbers, I find that the settlement is for $117 million.  Nice.  Now, how many potential claimants?  Oh… 3 billion.

Quick, what’s the math on this?  About four cents per claimant.  Well, I guess that’s something.  And what, perchance, are the lawyers fees for the case?  $30 million, plus an extra $2.5 million for expenses (postage for 3 billion $.04 checks=$900 million, FYI).  Oh, and the expenses.  Some people endured a greater hardship to prove the culpability of Yahoo, and those people will get awards of $2,500, $5,000, or $7.500.  I did not see in a quick scan of the online documents how many people this award pertains to, but there are six plaintiffs.  When talking in millions of dollars, 4-figure awards are a rounding error.

So, let’s round down to the nearest million for the post-lawyer-payday settlement pool, which is now $84 million.  And now, each claimant is due at least 2.8 cents.  I would round that up to 3 cents, but that’s $6 million of rounding that we just don’t have the funds for.  Sorry about that.

Ok, Boomer

https://www.bloomberg.com/opinion/articles/2019-11-04/millennials-should-be-happy-they-are-stuck-renting

“Millennials spend a lot of time bemoaning their inability to buy a home, forcing them to keep renting. They should want to stay renters, if they know what’s good for them financially.”

You son of a bitch.

This fucking article, written by an economist, is trying to sell the idea that people are better off renting than owning a house.  And specifically, millennials are better off doing it.  You wonder why young people hate the boomer generation?  Well, this is a pretty good piece of evidence.  Take away the condescending tone and you actually are left with malicious advice.

It’s amazing to me the slight of hand that is performed in order to make the pitch in this article.  The author actually says that buying a house is a losing proposition.  “…it has cost the homeowner 3% per year to own a house before taxes, maintenance, utilities and insurance.  That’s a real negative return.”  A goddamn economist, who manages investing funds, is selling this shit.

Then this paragraph:

“Some millennials were caught up in the subprime mortgage boom and collapse, and remain scarred by it. They believed they could buy houses with no money down and never shell out a dime because continuing rapid appreciation would allow for continual refinancings. So the bursting of the subprime mortgage bubble and subsequent one-third decline in house prices was a rude awakening, especially since it was the first nationwide drop in values since the 1930s.”

This needs some unpacking.  First, not just millennials were caught up in this shit.  Everyone was.  But who was most vulnerable to it?  And that snark about what millennials believed?  You fuckers sold them that belief.  You convinced them.  They had no prior experience in real estate investing and falsely trusted you.  So then we get the first housing crash since the 1930’s.  Thanks for that.

Look, I’m no economist.  I’m just a former renter who became a homeowner.  When I went to purchase my new house, my simple criteria was, “is the same cost as what I’m paying in rent?”  That was my budget and that’s where I went.  I completely understand the issue of house prices being insane, but I also see what rent costs and it’s not much better.  So, I encourage anyone to buy when they can.  If you have to start small, do that.  Don’t hold out and wait until you can afford big.  And don’t listen to this bullshit that you shouldn’t buy at all.

Here’s the truth that the author is not telling you.  It’s very simple.  When you rent, you get nothing for your money.  You get lodging and that’s it.  When you own, you keep what you spend.  People want to argue that housing doesn’t have a high rate of return on investment?  Fuck them.  It’s not supposed to.  They say, what if you own a house for 10 years and sell it for what you paid for it, not gaining a cent?  You fucking assholes, you gain all the equity in the property.  All the money you paid into the loan (minus interest of course) is equity.  You get that back.  If you’re renting, what happens when you end your lease?  What equity do you get from that? That’s “not gaining a cent”.

Then they can argue that property values can fall.  Yes, this has happened once.  Do I think it will happen again?  Probably, but not as extreme as last time.  But here’s the thing.  You don’t lose money until you sell.  I was underwater over $30k at one point.  I kept making my mortgage payments and the property value eventually came back.  And all the payments I made while it was underwater?  Guess what?  They still counted!  Just like every other payment.  It’s all equity.  Stay the course!

So, you want to know why this fucking boomer wants you to keep renting?  He’ll tell you right at the end of the article.

“The trend toward renting over owning should persist and may even increase. I continue to favor investments in rental apartments—assuming, of course, they meet the location, location, location test.”

So you better keep renting, if you know what’s good for you.  And what’s good for you is very good for me.

Losing For Winning

There are some people who are professional sweepstakes players, believe it or not.  They spend an unnatural amount of time researching and entering sweepstakes.  And they can actually make money at this, too.  Or at least get a lot of stuff.  You might wonder how you can actually “win” at this.  It would just seem to be a numbers game where you enter as many sweepstakes as you can and eventually you’re bound to win something.  But there’s actually a somewhat unknown rule that the pros use to get an advantage. (one weird trick!)

Most sweepstakes have some sort of condition for getting an entry.  Buy a bottle of this, visit such and such place, every order you place on this website, etc.  But, in all sweepstakes, there is a way to get an entry without making a purchase or performing some action – it’s legally required.  If you read the rules, they will tell you how to get a free entry.  Always read the rules.  In most cases, you have to send a 3×5 card with your name and address printed on it and they will return you an “entry”.  Some sweepstakes limit the number of entries an individual may make, most don’t.

I’ve attempted this technique once a few years ago.  A local charity was selling tickets for your choice of two cars.  The tickets were expensive, like $150, and the total number of entries was limited – a rare situation and very valuable because you knew your maximum odds of winning.  And like all sweepstakes, you could get free entries if you read and followed the rules.

I bought two tickets, to keep up appearances, but I then deluged them with something like 100 requests for entry tickets.  They did fulfill my requests, sending thick bundles of tickets in the mail with their drawing receipts torn off.  In the end, I estimated I had a 20-25% chance of winning.  Does that sound bad?  Does it sound better than a 1:2000 chance? (these numbers are all estimated, BTW, don’t try to math them out)

Well, I didn’t win, even with my extraordinary chances.  Whatever, it was kind of a fun exercise.  The local charity has never tried a car sweepstakes since, so I think I really pissed them off.

So anyway, I got a flyer for another car raffle.  $20 tickets, and the rules do say no purchase necessary (as they must), however, they don’t specify how to get those entries.  You have to mail the administrator for information.  This sounds pretty good, too, because that extra step might turn off casual players.  But when I look at the effort vs reward, I’m going to pass on it.  Would you pass on a elevated chance to win a $60k truck?

So, first of all, it’s a truck.  It’s a stupid, jacked-up, fully customized pickup truck.  Not my style, at all.  So what!  Sell it!  Ok, let’s consider that.  First, winning the prize is a taxable event.  The IRS is going to want their share of your $60k windfall.  Let’s generalize at a 30% bracket.  So that’s $18k out of pocket right away.  You need to have that to claim the truck.  Then there’s tax and title.  That’s about another $5k.  Probably you need to insure it for at least a month until you can sell it.  Maybe that’s $100 at most.  So in order to get the $60k truck, you need to spend $23k. 

So then, your new $60k truck rolls off the dealer lot and immediately becomes a used truck.  And it’s worthwhile to note that this is a 2019 model and the drawing is in 2020, making it last year’s model.  Everyone knows a vehicle loses an immediate percentage of its value when it leaves the dealer lot.  Considering this is also last year’s model, shall we say 25%?  Now your truck is worth $45k and you’ve spent $23k to acquire it.

Your truck is worth $45k, but that is not exactly what it would sell for.  You’re in a hurry to sell this so you don’t have to keep paying for insurance on it.  Will it sell for $40k?  Let’s say yes, so we can wrap this up.  So you’ve now made a $17k profit on a $60k vehicle.  That’s quite a discrepancy.

“You suck.  I’d be more than happy with an extra $17k!”  Maybe you would.  But you also need to consider that you added $60k to your gross income this year with that win.  That might push you into a higher tax bracket.  That means the money you earn this year is going to be taxed at a higher rate, more than it would have been had you not won.  17k worth of higher taxes?  Probably not, but your withholding from your paycheck is probably not going to compensate for that extra, so you better save some of that $17k to cover your tax bill next year.

There’s something to be said for thinking things fully through.  In the case of the first drawing for the car, I would have kept and driven that car (not a $60k car, either) and could have absorbed the taxes easily.  This $60k truck has a lot of BS accessories on it that are inflating the value that would never make back their cost if it were to be sold.  It’s a bad deal all around.