Jon Bon’s Money

Things I Am A Huge Fan Of.

April 2, 2010

Things I am a Huge Fan of.

IRA’s

These are tax free earnings folks, your 401k is not. In your traditional 401k you don’t pay tax on the money initially, but do when you make distributions. The IRA on the other hand you pay tax up from, but don’t pay taxes on the earnings or distributions in the future. Tax free earnings, kind of a big deal!

Vanguard

I personally think they are the best brokerage house around. They are owned by their funds, and not traded on the NYSE. They needed no federal bailout money, and have the lowest fees in the industry.

Mint

Is the mother of all personal finance sites, it allows instant and accurate assessment of your financial picture at any point in time. It also can show you spending trends, graphs, and alerts of when bills come due.

Health Savings Account

These are great for young people that don’t visit the doctor often. My old heath insurance cost me $100 a month if I used it or not. Now it costs me $100 a month, but that money goes into an account that I own and can be used with a regular debit card towards any medical bill I choose. This money is interest bearing and tax free.

My Iphone

It’s expensive, it’s trendy, and it’s totally worth it!

I use all of these products; if you get a chance to do the same I would highly suggest it. You won’t be disappointed.

1 Comment | Ramblings | Permalink
Posted by fubar1383

Horay! Tax Refund Time

April 2, 2010

So my “Savings Hierarchy” goes something like this.

1. 401k

2. Cash Savings Account

3. Roth IRA

4. Individual stocks.

With the house and wedding soaking up an awful lot of my disposable incomes, saving account numbers 3 and 4 are not getting the attention that they deserve.

I have a Roth IRA with Vanguard and my contribution for 2009 is oh around $50 that I had in a different Vanguard account. Yes this is laughable and I should be doing more to fund that account. So my 2009 contributions were pretty dismal. The limit for Roth IRA’s is 5,000 a year, so I was only 4950 away! What is handy about Roth IRA’s in addition to their awesome tax benefits is that you can send payments in 2010, and apply them to 2009. So that way if I could send just under 10,000 and fully fund both years without penalty. Note: This has to be done before April 15^th of the following year.

So this year I am going to take my tax return that I just received and apply it to my 2009 contributions. I highly recommend this strategy, and it essentially takes zero work. Unless you spend your tax return before you receive it, it is an easy way to fund your Roth IRA without even really budgeting. No I would be able to fund the entire 5,000 with one tax return, but it does allow for a lot more flexibility.

Leave a Comment » | Assets | Permalink
Posted by fubar1383

How To Ruin A Budget

March 26, 2010

I went to Las Vegas this weekend with 11 great friends of mine to celebrate my upcoming marriage with a great bachelor party. I have never been to Las Vegas before and I had a great time. It is without a doubt unlike any other city in the world. It makes people act crazy and totally and utterly forget who they are back home.

Usually I am not a gambler whatsoever, and I still would say that has not changed, but I did spend a little time at the tables.

I started with roulette which has terrible odds (around 5% house edge). Its very easy to play and requires no thought, skill, or talent of any kind. I then had a disastrous foray into 3 card poker. I think I lost around $130 in a matter of minutes. I then moved onto black jack which I very much enjoyed. I probably lost around $50, but I spent about 6 hours at a few different tables at different times. I more then made up for the losses by the free drinks I received.

My takeaways from Vegas

Monopoly Money: In Vegas I treated $50’s and 100’s as 5’s and 10’s

Chips: Using chips as currency further distances your losses with actual cash

Time: Where did it go? No clocks, no windows, very easy to lose track of time.

Drinks: the entire strip is open container. So BYOB lessens the pain

Expectations: Don’t think your going to win, and set some sort of number that is your loss limit

I loved Vegas and am very grateful to my friends who helped make it happen. All we need next year is for someone else to get engaged and we can find an excuse to do it again.

Cheers

Leave a Comment » | Expenses | Permalink
Posted by fubar1383

Taking Tax Deductions on Charitable Giving?

February 15, 2010

While doing my 2009 taxes, the portion for charitable giving came up on my tax software. Now I don’t contributed all that much to non-profits, and too be honest I probably should contribute more. I know it is perfectly legal, but somehow it does not feel right. Lots of people intentionally give large donations near the end of the year to reduce their tax burdens, but I still don’t know how I feel about it.

I feel like Charitable giving should be a selfless act, and I should not be thinking about the tax benefit I will get at the end of the year, rather that I am helping those less fortunate then myself. Maybe I will simply donate the money I saved on my taxes back into a charity.

Having Charitable giving being tax deductable is actually a way that the government uses tax policy to encourage (or discourage) a certain type of behavior. They think that if they give people a break on their taxes for being a good person, then that will encourage more giving, and be a larger benefit to society.

I guess I will only deduct the portion that I contribute through work because that is deducted out of my paycheck and I know exactly how much that is. I will ignore my church tithes, and boy scout popcorn. It still feels strange though getting money for giving money away.

Do you deduct your charitable giving?

1 Comment | Taxes | Permalink
Posted by fubar1383

IPhone Update

February 12, 2010

Well I have had my Iphone for two weeks now and I still love it. I like just about everything about it, and I have had no trouble with the AT&T network save for 1 call that did not get connected the first time. There are lost of things I like about it, and a few that I don’t.

The Touchscreen: its actually super easy to use, and the software is smart enough to know when I tapped the screen by mistake. Typing takes a little getting use too espically in the portrait orientation.

Email: I have never had a smart phone before, so getting the Iphone was like going from a 1987 Ford Fremont to a band new Lexus. I had my first “Iphone moment”. We have had a fair amount of winter weather recently, and I was wondering if my classes were going to be cancelled. I did not know the schools weather hotline number, but I knew I had it in my emails. With in seconds I pulled up the email, tapped the number and found out that I did indeed have to go to class.

Apps: They make apps for everything of course and some are just so dang useful you wonder how you ever got around before. I could try to explain the awwwesomeness that is the Iphone Apps, but it is just something you have to experience yourself.

The Camera: again, just so easy and convenient to use. Most pictures I want to take I am not going to hang in a studio, so the need for a 10MP photo is moot. Here is a hint, the apps utilize the camera in ways that I never thought possible.

Cost: Now this is something I don’t like! I got my first bill for $124 this included some prorated charges as well as an activation fee. Cell phone plans are not cheap for any phone and since I think this is the best phone that money can buy, it is justified. So the cheapest plan with unlimited data and texting should run $85ish a month.

Final thought: Zero buyer’s remorse.

Leave a Comment » | Expenses | Permalink
Posted by fubar1383

Trains in Ohio: Inconvenient, Slow, and Made of Bacon

February 1, 2010

Oink Oink!!!

Welcome to one of the biggest pork-spending boondoggle also known as the “3 C Corridor” it will connect Cincinnati, Columbus and Cleveland.

This all sounds like a good idea in theory, except that every single person who does not live on the island of Manhattan actually owns a car and has no use for a train. Last time I check we just spent 10 billion on American car companies to keep them producing cars, maybe we should buy some of them? Amtrak estimates that it will take $17 million a year annually to subsidize a train that no one is going to ride.

Furthermore this plan is not going to be free. Even though it is also federal dollars they still have to come from somewhere. The cost is going to be around $400 Million dollars. Yes dollars, not yen, or rubles good ole American Greenbacks, all 400 million of them.

The third reason this is a terrible idea is that the trains are going to go 79 MPH*. Yes that sounds quite fast, maybe a little faster then you would drive in your car. This is the best reason I have heard so far for building a train, oh there is one little note. Factoring in all the stopping this train will be doing it will average about 39 MPH. So yes this train will have the same average speed as a Vespa! So a drive to Cincinnati from Columbus takes 1.5 hours, yet you can jump on a train for $20 and get relatively close to where you want to be in 3 hours.

So needless to say the idoits who run my state got their barrels of pork. For the price of $400 million we will get a train that:

1. Won’t get ridden

2. Wastes $400 Million

3. Goes about as fast as a senior citizen in the slow lane.

Moral of the story: I think buying 2 Million Ohioans IPhones would have more utility and a greater economic benefit then this train.

1 Comment | Uncategorized | Permalink
Posted by fubar1383

Bad Decision 2010

December 24, 2009

I figured I would get it out of the way early this year. Usually I am Mr. Responsible; I buy the right sized house, a used affordable car, pay my bills on time and generally don’t splurge on luxury items. 2010 is going to be a little different, after having a good 2009 and really starting to balance out this whole homeowner thing I find myself needing (read: wanting) a new cell phone.

Oh not any phone, I must have a smart phone. Oh not any smart phone I must the most expensive and most advanced phone out there. I must have the Iphone.

The Iphone is of course the culmination of everything that Apple does well; it’s a computer, Ipod, and phone all tucked into a tiny device that actually works quite well. You can surf, listen, or talk on this expensive device.

Now I am pretty responsible and I have been hearing lots about prepaid cell phones in the blogosphere. They are cheap to purchase and easily replaceable. They require no contract, are pay as you go, and really only make calls. I would highly suggest this type of phone for my grandparents or someone who has limited monthly usage.

So let’s do some cost comparison here:

Cost Monthly cost Termination cost.

Iphone $200 $90 $250

Prepaid $40 $40 $0

So over a 2 year period:

Prepaid cost: $1000

Iphone cost: $2360

That is actually not as bad I was expecting, the Iphone would cost around 2.5 times more then a prepaid barebones phone would over the 2 year contract period. Figuring in the benefit of web-browsing, email, texting I would say that the value received by those extra services probably about equals the cost difference of these phones.

1 Comment | Expenses, Liabilities | Permalink
Posted by fubar1383

If Someone Calls You About a Credit Card…

November 30, 2009

Then it’s probably a scam

Today I got a voicemail on my cell; the phone was off so unfortunately I cannot post the number that they were calling from.

Here is the text of the voicemail: (in a very nice and polite female voice)

“Hello this is Rachel at card holder services calling in reference to your current credit card account, there are no problems currently with you account. It is urgent that you contact us concerning your eligibility for lowering your interest rate to as little as 6.9% your eligibility expires soon please consider this your final notice, press the number one now to speak to a live operator and lower your interest rates”

To me this stinks like last weeks fish. This has to be a scam, no company name, my name or card is not mentioned, not identification what’s-so-ever. “There are no problems with my account” I bet if I press one as directed I will very quickly have problems with my account!

So this is a reminder to never give out any personal information. If you think that a company calls you that you do business with hang up with them, and then return the call to customer service that is on the back of your card or latest bill/Statement.

The 2003 survey from the Identity Theft Resource Center found that:

• Only 15% of victims find out about the theft through proactive action taken by a business

• The average time spent by victims resolving the problem is about 330 hours

• 73% of respondents indicated the crime involved the thief acquiring a credit card

• The emotional impact is similar to that of victims of violent crimes

I would say as a general rule, Never-Ever do business over the phone with a company that calls you. Hang up and call the customer service line that you are positive that is legitimate.

Also keep weekly, or if you can a daily track of your bank accounts and credit cards. This is a bit of a pain, but it is much less painful then someone having access to one of your card numbers for weeks or even months at a time!

Lastly, make a photo copy of everything in your wallet/purse, and keep this in your house. That way if something does happen then you know exactly what was in your wallet or purse and are able to quickly notify all the companies you to business with to cancel you cards and put alerts on your accounts.

Moral of the story: It sucks but it’s the way things are today.

2 Comments | Credit | Permalink
Posted by fubar1383

Pointless Goverment Agency Of The Month:

October 30, 2009

Uspslogo

The United States Post Office has been around for more then two hundred years, and I am sure it has served us well the past. I am not writing this to complain about the price of stamps or to bad mouth the postal service. I just don’t think the government should be in the business of providing such a service.

The reason that the USPS is still around is because it is illegal for any other business to compete with them. You read correctly the USPS is alive and somewhat well today because of the government sponsored monopoly that they hold on first class mail. Those business class envelopes that you get your bills in every month by law can only be delivered by the USPS.

180px-Envelope_-_Boonville_Address-000

Recently I went to the USPS to mail a book and waited 15 minutes in line. I expected this and was not thoroughly annoyed at the process. The lady at the front was nice, and courteous. The problem was that for some reason the post office closes at 5, and everyone was trying to get their mail in before it closed.

A week later I had to mail something via Federal Express. I walked in, handed the lady my item, which she promptly dropped in an envelope and mailed. I was out the door in under a minute.

Now this could have been a coincidence, or I was just in a really good Fed Ex store on a really good day, but I doubt it. Let us take a look at a little big of the financial history of the USPS, and ask yourself, would you buy stock in this company? This is the only company in the United States that is legally allowed to hold a Monopoly

usps

You might be saying that I am full it, and that the USPS is a wonderful organization employing hundreds of thousands of Americans. But let me ask you a question, do you enjoy going to the post office? How about the BMV? Perhaps taking a trip to the Social Security Office to brighten your day? Do you look forward to making visits to those places with all the smiling grouchy people? Or would you rather have your fingernails ripped off?

My argument can be summed up in this: Government organizations are traditionally much worse at accomplishing their goals then their private counter parts. Most of the time the only reason we have such organizations is because privatizing the industry would just not make practical sense.

We should remove the “Legal Monopoly” that the USPS enjoys and divest the federal government of delivering first class mail. Or simply allow the USPS to try to compete with Fed Ex and UPS. For some reason if we allowed that to happen I don’t think the USPS would be around very long at all……

1 Comment | Ramblings | Permalink
Posted by fubar1383

Smells like……..Victory

October 16, 2009

I win! IT’S ALL OVER, JonBon Wins!!

Vj_day_kiss

So if you’re an avid reader, you would know of my troubles with my Chase Credit card. But you’re not an avid readers of JonBons Money, because I am pretty sure I have none.

My troubles can be found here:

Chase is Bush League

Chase is Bush League Part Duex

Now to summarize: I opened a Chase credit card for one year of 0% interest so I could buy an engagement ring for my soon to be wife. This craziness all started with me trying to make an online bill payment and getting my bank account number wrong as I was typing it in. Yes that was clearly my fault, but I felt it was unreasonable to charge $39 for making a simple type-o on Chase’s own website.

There has been extensive contact between Chase and myself, and frankly I am not even sure how many, how often, or even what was said. But it went something like this.

Email, Email, Email, Phone Call, Email, Phone Call, Dispute Letter, Better Business Bureau, Letter, Phone Call

As of today I saw this on my online account.

Trans Date Post Date Type Description Amount

06/22/2009 10/15/2009 Refund RETURNED CHECK FEE REVERS(Other) $-39.00

Needless to say I probably spent many hours of my time over 4 months trying to get this charge reversed, this is time that probably could have been spent more productively doing other things.

To me it was not about the money, or the time. I felt like I had been wronged by Chase, and I was not willing to sit around and let that be.

I have a feeling the complaint with the Better Business Bureau had the required weight to make this matter fall in my favor. So I am actually happy with Chase now, although we will see if I decide to keep the card open after I pay off the ring. I at least went from “Definitely closing” To “Maybe keeping”

Anyways, Thanks BBB!!!

Cheers…..