It’s been nearly a year since my post “On my Death, Please, Take a Breath.” In that post I relate a story about how a fellow who inherited an IRA within a trust panicked, and lost nearly 25% of it to taxes. Instead, he could have taken limited distributions and paid little to no tax at all. I don’t know who advised this person, but all the work his sister put in to the planning of her estate evaporated.

Recently, I received a comment on my “Suze on Variable Annuities” article from last July. A woman wrote that she was advised by her bank to put the money in to an annuity. Now, whether you like or don’t like annuities isn’t really the issue. I’d be just as angry if she said she was put into an S&P ETF, but then went on to state she had no idea what that meant. I do feel that bankers are drifting (have already moved?) into the same category as most other scam artists preying on the uninformed. I am still waiting for her reply to tll me what, exactly the product is so I might take the time to read the prospectus and explain to her what she now owns. The fact that her ‘banker’ did not do this is criminal.

I recall a number of years ago, I was making a deposit at my local bank, and as I stood to write out the ticket, I heard an old person ask about T-bills vs CDs, the T-Bill happened to be slightly higher that week. The banker sitting at his desk told her, “The CD is a little lower, but it’s FDIC guaranteed. There’s no guarantee on the T-Bill.” And another sale was made. I don’t know on what planet the “full faith and credit of the US treasury” doesn’t trump the FDIC, but I thought better than to disrupt the place, and provoke a fight.

Joe

written by JOE \\ tags: annuity, etf, suze, t bills, variable annuities

I recently read an article on CNN/Money’s website titled “Credit card rewards are a real rip off“. The page starts with a legitimate gripe, “You got burned with frequent flier miles, which were nearly impossible to redeem and hardly worth the hassle, so credit card issuers turned to other kinds of incentives to entice you to charge more.” Now, I’d be hard pressed to argue with that. I typically use the miles to upgrade to first class on longer flights for a more comfortable ride, but rarely have been able to use miles to get the original ticket, too few seats are available per flight, and tend to get booked well in advance.
But CNN goes on to trash other reward programs as well, suggesting that “though rewards do spur consumers to spend more, the study found that confusing rules and restrictions make most reward cards more trouble than they’re worth.” Really? Let me share my card reward experience:
I use Amex Open. It rebates 5% on gas from dollar one. I calculate the rebate at $600+/yr on just that. Same 5% on any office supply store purchases.
A Fidelity Mastercard that gives 2% (they changed to 1.5 for new applicants, but I kept the 2%) into a 529 account. My child is 10 and we will have a full semester of college paid free with the cards rebates. We only charge what we can pay in full each month.
There is responsible credit card use. We prove that. If one will be too tempted and run the card up on purchases they cannot pay in full, they should use cash only. Me, I’ll enjoy the rebates.
Joe

(Well, just when I finished setting up this post, the mail came, and Amex advised me, that due to the high cost of gasoline, they were reducing the gas rebates down to 3% on this card. Still, that’s cash back in my pocket, just no so much.)

written by JOE \\ tags: Amex, CNN, cnn money, Credit, credit card, credit card rewards, gas, money, reward experience

On my main site, I recently posted an article “Getting Started” and led off with a Dickens quote:

I came across this clip which was too good to ignore, sorry if you’ve seen it, it just struck me as appropriate for this time of year. (Disclaimer – neither my wife nor 9 year old found this funny at all, I’ll let you decide for yourself.)

No, I don’t plan to make these clips a habit, not many are this good.
JOE

written by JOE