December 31, 2013

Do Not Rollover Your IRA or 401k to State Farm

I just saw an banner advertisement suggesting you 'Talk to a State Farm Agent today about a Rollover IRA'.    My first thought was that they were going to try and sell you an insurance policy or variable annuity for your IRA.   Well its not that bad but their investment options are not good.     The State Farm rollover site talks about their investments and their mutual funds all seem to have 5% loads and moderately high expenses.   For example the State Farm S&P 500 index fund (SNPAX) has a 5% load and a 0.76% fee.     Thats particularly bad for a index fund.    I can see the argument that a load might be worth it if the fund manager does a great job of selecting stocks and out performs the market.   But with an index fund you're paying for a simple index and the manager isn't doing anything special.   Theres zero reason to buy a index fund with a load versus one without.  On top of the load the State Farm fund has a relatively high 0.76% fee.  That may not seem like a lot but it adds up and there are index funds with much lower expense fees.

Instead of buying such a fund through State Farm you should instead seek out a cheap index like the Vanguard 500 Index fund (VFINX).   The Vanguard fund has no load and a very low 0.17% expense ratio.    Lets say you have $10,000 to rollover and you are 35 years old.  If your investment grew at annual rate of 7% a year then here is how the load and expenses for the SNPAX and VFINX funds would compare :

State Farm Vanguard

$10,000 $10,000
less load $9,500 $10,000
30 yr @7%  $        54,531  $  65,840

With that Vanguard fund you'd end up with 20% more money at retirement compared to the State Farm fund.

You should avoid putting your retirement with a company that only wants to sell you funds with sales loads and high fees.

Do not rollover your IRA to State Farm or any other company with similar investment options.   Instead go with a company like Vanguard that offers very low expense funds or Scottrade, Schwab or Fidelity if you want a wider variety of investment options.


December 29, 2013

Go Buy Some Ear Plugs

This topic has nothing really to do with personal finance.

If you don't own some ear plugs then I'd recommend you pick some up next time you have the chance.

You can get a 20 pack of Howard Leight disposable ear plugs on Amazon for little over $3.   Those are disposable versions which would be good to have on hand for the rare use. You'll probably find a box in your local store for similar prices.   I think I've seen them for sale in both the first aid section and the home improvement section.   If you need ear plugs for more extended uses like in the workplace then you may want to invest in some higher quality reusable ones.

A good pair of earplugs like this will get rid of a LOT of noise.  Ear plugs have a NRR spec. which is the Noise Reduction Rating.  So an NRR of 33 would cut the noise level by 33 decibels.   30 decibels is the difference between a vacuum cleaner and a quiet room.

I really wish I'd considered buying ear plugs a long time ago.    There have been several times in my life which I recall where I really could have used ear plugs but simply hadn't thought to buy them ...

  • Sleepless nights being tortured by the "plip"  ... "plip" ... "plip" ... "plip" ... ... ....  "plip"... "plip" ...  sound of the dripping rain spout right outside of my bedroom after a rainy/snowy night.  
  • That one night in that one hotel that hosted a wedding party that lasted till around midnight or 1AM the night before I had to catch an early morning over seas flight.   I distinctly remember trying to shove rolled up tissues into my ears and ear plugs would have done the trick perfectly.
  • Half of the airplane rides I've been on in my life.
  • Very loud sporting events, especially in door arenas.
There are lots of other good uses for ear plugs.    You should wear ear plugs to protect your ears from extended exposure to loud noises.  If you work in a  job with a lot of noise then you are probably already familiar with using earplugs at work to avoid noise induced hearing loss.   But most of us have some exposure to loud noises while doing things like mowing our lawns or using a leaf blower or anything along those lines.

Oh, and in case you are objecting because you've heard “You shouldn’t put anything smaller than your elbow in your ear”   You should rest assured that ear plugs are safely designed and will not damage your ears.

Well anyway thats my pitch for buying some ear plugs.   I'd wished someone had told me about something as simple as buhing ear plugs years ago so I could have slept well those nights when the down spout went "plip" ... "plip" ... "plip" ... "plip-plip" ... ... "plip" and drove me insane at 2AM.

--This article may contain referral links which pay this site a commission for purchases made at the sites.

December 26, 2013

Is Online Shopping Bad for the Environment?

This time of year we've been getting a lot of packages delivered to our house through online shopping and other people shipping us gifts.   Ok to be honest we're always getting lots of packages delivered since we do most of our shopping online nowadays taking advantage of stuff like Amazon Subscribe and Save and other online discounts.   Its convenient to have things delivered to our door.   But I have wondered if those UPS and Fedex trucks driving all around might be wasting a lot of gas.

My initial assumption was that it had to be more efficient for delivery trucks to run routes than for everyone to make individual trips to stores.  

Lets say a truck holds 100 packages and makes 50 stops in its route.   Each individual stop in the route only adds a small incremental amount to the total trip distance.  You might go a couple blocks out of the way to add a house or even have stops fall in between other stops.   The delivery companies will certainly do their best to optimize the trips because they know that saves them gas which improves their profits.   If you took the same 100 packages and had 50 individual people go and get them from a local store you'd have 50 round trips to stores which is certainly many extra miles of wasted gas and time.   

I confirmed my hunch not too long ago when I read about this study on the topic:

Grocery delivery service is greener than driving to the store
They say :
"University of Washington engineers have found that using a grocery delivery service can cut carbon dioxide emissions by at least half when compared with individual household trips to the store."

They have a couple graphics on their site that illustrate the kind of thing that happens in the example I gave.

I looked around a little more to find other sources. 

I also found another study Carnegie Mellon Study Finds Shopping Online Results in Less Environmental Impact

and they say :
"A new study by Carnegie Mellon University's Green Design Institute found that shopping online via's e-commerce model reduces environmental impact with 35 percent less energy consumption and carbon dioxide emissions than what is produced in the traditional retail shopping model."

Thats two academic resports that support the claim that online shopping is actually more efficient.

I have confidence that the answer is that online shopping isn't bad for the environment and in fact saves gas over individuals making separate trips to local stores.

--This article may contain referral links which pay this site a commission for purchases made at the sites.

December 22, 2013

Can you Save Money by Making Your own Soda at Home?

I just saw an add for a $25 promo credit on Amazon if you buy a SodaStream soda maker.:

At the top of the page they advertise the $25 deal :
SodaStream Fountain Jet Home Soda Maker Starter Kit

The $25 promotion expires December 31st.

I've seen these home soda maker devices before but hadn't looked at them too much.    This one is on sale for $69.95 and then with $25 credit that makes the net cost about $45 for the device. 

The starter kit comes with the machine to make the soda.  It also has a rebate form for a 60 liter canister of CO2.  There are some soda mix samples included but I couldn't seem to find much detail on what and how much is included.

Hows it work?  

You buy the machine, you get a CO2 canister and a soda mix.   You then mix water and the soda mix and inject it with CO2 to make your own carbonated beverages.   After buying the machine you also have to buy CO2 and soda mix to make soda.

How much does the soda cost?

The CO2 canisters are $15 for a 60 liter canister.   That comes out to 25¢ per liter.
The soda mix is around $4-6 per packet and will make 12 liters.   I'll go with a middle cost of $5 so we'll call that 42¢ per liter.   Theres some variation there based on the mix you buy.

Your ongoing cost is about 67¢ per liter of soda.   There are 33.8 ounces in a liter and 12 ounces in a typical can of soda.  

This gives a cost of around 24¢ per 12 ounce serving for the CO2 and soda mix.

That is just for the CO2 and the soda mix.    You also have to consider the cost of the machine.   If you make a ton of soda with this thing then the cost of the machine will have less impact on your overall soda cost,, but if you only make a little bit of soda then the machine cost is more significant.

For example.   Lets say you're single and you have 1 soda serving a week and use this thing for 5 years.   Thats going to add up to a total of 52 x 5 = 260 soda servings.    Well the net cost of this machine after the $25 credit and accounting for the $15 worth of CO2 is $30.     That would mean your cost of the machine over all the soda you use equates to an extra 11.5¢ per soda.

On the other hand if you're a family of 6 who consumes 1 serving of soda daily then your consumption is 42 as much and your machine cost is just 0.3¢ per soda.

Giving variable usage its hard to know the exact impact of the machine cost.   We could ballpark it and give a range of total cost of about 24¢ to 36¢ per 12 ounce serving.   That would include the 24¢ for CO2 and mix and then a fraction of a cent to ~12¢ for the machine cost to account for a wide range of usage.

Bottom line cost estimate : 24-36¢ per serving.

Is it a good buy?

Well to figure if a Sodastream is cheaper we have to know how much soda normally costs.

If I go to the store today and buy a 12 pack of Pepsi or Coke I'll pay around $5 or $6.   Thats 42-50¢ per serving.     But sometimes I can get 12 packs for around $3.50 or less.  Thats only about 29¢ per can.   If I were to instead buy the generic store brand soda from Safeway today I could get it for $2.25 or only 18.75¢ per can.

This gives me a range of cost for store soda of 19-50¢ each.

I've got a cost of 24-36¢ for the SodaStream and 19-50¢ for cans of soda.    Whether or not you save money with the SodaStream will depend on what kind of soda you buy and if its on sale versus how much soda you make at home.

You may or may not save money with a SodaStream.  It depends.   But it seems to me that if you're looking to save money you can shop for soda on sale and get a reasonable price that is probably about the same or better than what the SodaStream will cost you.

Other pros and cons

Making soda at home with a SodaStream or similar device will have other benefits or negatives too.

Other benefits of home made soda:
Won't waste unused soda.
soda won't go flat
Lots of flexibility to make custom soda mixes

On the other hand the soda may not be the same quality or taste as some popular brands.   If you want Coke then theres no option to make your own Coke at home and another cola version is just not the same.

Whats the verdict? 

You may or may not save money with a SodaStream.   If you really want to save money then waiting for sales on the cheap store brands are usually the cheapest route.   A SodaStream would give you flexibility to make different mixes of soda and make smaller servings on demand.

--This article may contain referral links which pay this site a commission for purchases made at the sites.

December 20, 2013

Best of Blogs for Week of December 20th

Every Friday afternoon I share some of the more interesting or notable posts that I have seen in the personal finance blogs and other sources for the past week

DQYDJ says  No, Business Insider, The Mega Millions Drawing Isn’t A Positive Expected Value. Here’s What You Need to Know.  (don't forget that lottery winnings are taxed)

The Big Picture shares an interesting graphic illustrating Just How Big Is Walmart?

FMF says that your choice of college isn't the top priority and he think The School Is #3 at Best

p.s. there will not be a Best of Blogs article for the 27th as I'll be busy with the holidays


December 19, 2013

Is it OK to Lie to a Mercant for a Discount?

At MoneyBox Matthew Yglesias recently wrote about How To Save Money on Amazon With a Fake Baby.   You can read the article if you want but the summary is that he lied to and claimed he had a fake baby to get the 'Amazon Mom' discount program.   If you are in Amazon Mom you get a 20% discount when ordering 5 Subscribe and Save items compared to the normal 15% discount.    So... lying to Amazon about a fake baby is getting him 5% discount on some purchases.
In a follow up article Matthew claimed that Amazon Gives Thumbs Up to Fake Babies.   I don't really agree with his interpretation.   Amazon explained :""We are using the honor system, and we expect the vast majority of users to be honest.""     Which to me tells me that they expect people to be honest and if you aren't then you are lying to them and ... they didn't say its OK to lie to them.      When they say its on the 'honor system' that means you're not supposed to do it.  Bottom line.

In any case the Amazon Mom example raised the more general thought about lying to merchants for any kind of discount or promotional prices.    Matthew is clearly not the only person doing this.   I assume theres a few folks out there who are lying to Amazon for such a discount.   I'm also sure that Amazon is not the only merchant people lie to.   I would imagine that every day there are people claiming to be older than they are for senior citizen discounts, claiming to be in college when they aren't for student discounts, claiming to be younger than they are for child discounts and so forth.

Is it OK to lie to a merchant for a discount?

No of course its no OK to lie to companies to take advantage of discounts.   Any time you're lying to someone purely for financial gain its not ethical.   This should be a pretty obvious and straight cut case as far as I'm concerned.

I can think of a couple arguments people might use to try and rationalize to themselves doing something like this :

Argument 1: They are a big rich company so its OK to lie to them for a discount cause they can afford it.     It doesn't matter if the company is rich or not, that does not make lying ethical.   By this logic it would be OK for anyone to steal from everyone who has more money than they do.   Do you think its OK for poor people to steal your stuff simply because you have more than they do?   Clearly not.

Argument 2 :  Its not fair that someone else gets a discount and I do not.   It doesn't matter. Promotional discounts are meant to generate business for a company and are not meant to be universally fair.   Any time any company has a sale or discount its not going to be equal opportunity for everyone everywhere.   Thats just how the world works and is not reason to steal or lie or engage in other unethical behavior.

So again, no.. no its not OK to lie to companies for a discount.

--This article may contain referral links which pay this site a commission for purchases made at the sites.

December 18, 2013

FREE - Charlie Brown Christmas Kindle version

Right now you can get A Charlie Brown Christmas on Kindle for free. 

I do not know how long it will be free.

I heard about this on Fatwallet

-- This article may contain referral links which pay this site a commission for purchases made at the sites.

December 17, 2013

Gift Card Options For Redeeming Discover Card Cash Back

One way to get more out of your cash back from Discover card is to redeem your rebate for a gift card.   They have over 150 merchants that offer discounted gift cards.

Below is the list of merchants currently offered.  I also figured the return rate of the gift card as far as money you get / amount of rewards required.   Most of the cards are $20 for $25 or $45 for $50.   Many merchants also offer larger values such as $20 for $25 and $40 for $50 but I only listed the lowest amount offered.   The larger amounts offered seem to be just multiples of the minimum.

To maximize your reward you should find the merchant(s) that you KNOW you'll use the most that have the highest return.  I've sorted the list by return so you can go down the list and pick out the merchant thats highest that you know you'd use.    Rental cars like Alamo, Enterprise or National are good candidates if you travel much.    Past that I would imagine most people would benefit most from AMC movies or one of the restaurants or clothing retailers in the 125% range.

This list is likely to change of course.

Merchant Return Cost Value
Tauck Tours 300%  $ 100  $  300
Alamo Rent a car 200%  $   20  $    40
Big City Chefs 200%  $   40  $    80
Carnival Cruises 200%  $   40  $    80
Celebrity Cruises 200%  $   40  $    80
Enterrpise Rent a car 200%  $   20  $    40
FTD 200%  $   20  $    40
Great American Days 200%  $   20  $    40
Holland America 200%  $   40  $    80
Kalamazoo 200%  $ 100  $  200
Mrs. Fields 200%  $   20  $    40
National car rent 200%  $   20  $    40
Norwegian Cruise 200%  $   40  $    80
Princess Cruises 200%  $   40  $    80
Royal Caribbean International 200%  $   40  $    80
Samsonite 200%  $   20  $    40
Sandals Resorts 200%  $   20  $    40
Universal Orlando 200%  $   20  $    40
Brookstone 150%  $   20  $    30
Ohama Steaks 150%  $   20  $    30
Sunglass Hut 150%  $   20  $    30
1800 Baskets 125%  $   20  $    25
1800 flowers 125%  $   20  $    25
A Pea in the Pod 125%  $   20  $    25
Aerie 125%  $   20  $    25
Aeropostale 125%  $   20  $    25
AMC theatres 125%  $   20  $    25
American Eagle 125%  $   20  $    25
Athleta 125%  $   20  $    25
Banana Republic 125%  $   20  $    25
Bath & Body Works 125%  $   20  $    25
Bed Bath and Beyond 125%  $   20  $    25
Black Angus Cattle Company 125%  $   20  $    25
Brooks Brothers 125%  $   20  $    25
Buca di Beppo 125%  $   20  $    25
Burlington Coat factory 125%  $   20  $    25
Callaway 125%  $   40  $    50
Champs Sports 125%  $   20  $    25
Cheryls Cookies 125%  $   20  $    25
Coldwater Creak 125%  $   20  $    25
Crutchfield 125%  $   20  $    25
Destination Maternity  125%  $   20  $    25
Eddie Bauer 125%  $   20  $    25
Express 125%  $   20  $    25
Fannie May 125%  $   20  $    25
Foot action 125%  $   20  $    25
Foot locker 125%  $   20  $    25
GAP 125%  $   20  $    25
GlobalHotelCard 125%  $   40  $    50
Hickory Farms 125%  $   20  $    25
J Jill 125%  $   20  $    25
Kohl's 125%  $   20  $    25
Lands End 125%  $   20  $    25
Lane Bryant 125%  $   20  $    25
Lids 125%  $   20  $    25
LL Bean 125%  $   20  $    25
Lobster Gram 125%  $   20  $    25
Mario Tricoci 125%  $   20  $    25
Motherhood Maternity 125%  $   20  $    25
Nike 125%  $   20  $    25
Old Navy 125%  $   20  $    25
pep Boys 125%  $   20  $    25
Pier 1 imports 125%  $   20  $    25
Piperlime 125%  $   20  $    25
ProFlowers 125%  $   40  $    50
Red Door Spa 125%  $   20  $    25
redEnvelope 125%  $   40  $    50
Sally Beauty 125%  $   20  $    25
Sharis Berries 125%  $   40  $    50
Shutterfly 125%  $   20  $    25
Spa Finder 125%  $   40  $    50
Staples 125%  $   20  $    25
Talbots 125%  $   20  $    25
The Childrens Place 125%  $   20  $    25
The Container Store 125%  $   20  $    25
The Limited 125%  $   20  $    25
The Popcorn Factory 125%  $   20  $    25
Timberland 125%  $   20  $    25
Toms  125%  $   20  $    25
Under Armour 125%  $   20  $    25
VUDU 125%  $   20  $    25
Ace Hardware 111%  $   45  $    50
Applebees 111%  $   45  $    50
Autozone 111%  $   45  $    50
BahamaBreeze 111%  $   45  $    50
Barnes & Noble 111%  $   45  $    50
Bass Pro Shops 111%  $   45  $    50
Bergners 111%  $   45  $    50
Best Western 111%  $   45  $    50
Bon Ton 111%  $   45  $    50
Bonefish Grill 111%  $   45  $    50
Boston Market 111%  $   45  $    50
Boston Store 111%  $   45  $    50
Bubba Gump 111%  $   45  $    50
Buffalo Wild Wings 111%  $   45  $    50
Build a Bear 111%  $   45  $    50
Carrabbas Italian grill 111%  $   45  $    50
Carson Pirie Scott 111%  $   45  $    50
Chart House 111%  $   45  $    50
Cheesecake Factory 111%  $   45  $    50
Chilis 111%  $   45  $    50
Chipotle 111%  $   45  $    50
Claim Jumper 111%  $   45  $    50
Cracker Barrel 111%  $   45  $    50
CVS pharmacy 111%  $   45  $    50
Dave & Busters 111%  $   45  $    50
Dell 111%  $   45  $    50
Dillards 111%  $   45  $    50
Dominos Pizza 111%  $   45  $    50
Einstein Bros 111%  $   45  $    50
Elder Beerman 111%  $   45  $    50
Flemings Prime Steakhouse 111%  $   45  $    50
Gamestop 111%  $   45  $    50
Groupon 111%  $   45  $    50
Guitar Center 111%  $   45  $    50
Herbergers 111%  $   45  $    50
Hobby Lobby 111%  $   45  $    50
HomeGoods 111%  $   45  $    50
IHOP 111%  $   45  $    50
JCPenney 111%  $   45  $    50
Jiffy lube 111%  $   45  $    50
Kmart 111%  $   45  $    50
Lanry's Seafood 111%  $   45  $    50
Longhorn Steakhouse 111%  $   45  $    50
Lowe's 111%  $   45  $    50
Macy's 111%  $   45  $    50
Maggianos Little Itay 111%  $   45  $    50
Marshalls 111%  $   45  $    50
McCormick & Schmicks 111%  $   45  $    50
Mortons Steak 111%  $   45  $    50
Niemans Marcus 111%  $   45  $    50
Olive Garden 111%  $   45  $    50
On the Border 111%  $   45  $    50
Outback Steakhouse 111%  $   45  $    50 111%  $   45  $    50
Panera Bread 111%  $   45  $    50
Pottery Barn 111%  $   45  $    50
QVC 111%  $   45  $    50
Rainforest CafĂ© 111%  $   45  $    50
Red Lobster 111%  $   45  $    50
Red Robin 111%  $   45  $    50
Reegis Salons 111%  $   45  $    50
Regal entertainment 111%  $   45  $    50
Romanos Macaroni Grill 111%  $   45  $    50
Roys 111%  $   45  $    50
Ruths Chris Steak house 111%  $   45  $    50
Saltgrass Steak 111%  $   45  $    50
Sears 111%  $   45  $    50
Sephora 111%  $   45  $    50
Sports Authority 111%  $   45  $    50
Starbucks 111%  $   45  $    50
Texas Roadhouse 111%  $   45  $    50
TGI Fridays 111%  $   45  $    50
The Oceanaire Seafood Room 111%  $   45  $    50
TJ Maxx 111%  $   45  $    50
west elm 111%  $   45  $    50
Williams-Sonoma 111%  $   45  $    50
Younkers 111%  $   45  $    50
Zappos 111%  $   45  $    50
Shell 107%  $   70  $    75
Whole Foods 107%  $   70  $    75

I typed up the list manually from the Discover site so pardon any spelling errors in merchant names.


December 16, 2013

List of Restuarant Discount and Bonus Gift Card Deals

I was just about to start writing an article about the promotional deals you can get right now when buying gift cards such as Outback Steakhouse's   Buy $100 get $20 bonus (only valid Jan 1- Feb 10) deal. 

But then I ran across this article : Restaurant gift card deals

and this one Long list of holiday gift card promotions!

So rather than me reinvent the wheel here I'm just linking to those articles.   If you visit them you'll find a bunch of restaurants and other merchants offering bonuses with gift card purchases.

update :  I just noticed that DoughRoller also wrote an article on this topic with their list of
68 Restaurants and Retailers Offering Free Gift Cards for Givers

--This article may contain referral links which pay this site a commission for purchases made at the sites.

December 15, 2013

CD's Can be Cheaper than MP3s on Amazon

Recently Moneybox pointed out how a Neil Young Live At The Cellar Door CD on Amazon is cheaper than the MP3 album.  The CD is $9.99 and the MP3 version is $12.49.

I ran into this phenomenon a while ago.  I was looking to buy a MP3 album on Amazon and I noticed the price for the physical CD was actually cheaper than the MP3's.   But the kicker is that when you buy a CD at amazon they have an 'auto-rip' feature that also gives you a free MP3 copy of the tracks as well.   So the CD + MP3's is cheaper than just MP3's.   That of course makes no logical sense at all... but you can find many examples.

Here are a few albums I found where the CD + autorip MP3 is cheaper than just MP3s :

CD MP3 difference
Live At The Cellar Door $9.99 $12.49 ($2.50)
Duck the Halls: a Robertson Family Christmas $6.96 $11.49 ($4.53)
Recharged $10.30 $11.49 ($1.19)
Based On A True Story... $6.96 $9.49 ($2.53)
The Truth About Love $6.49 $10.99 ($4.50)

(that is not a representation of my own musical tastes, just so you know)

We can see there that there can be a pretty steep difference in prices.  Couple of those are $4.50 more for the straight digital MP3s versus the CD + auto-rip MP3s.  

But this is really more thee exception to the rule and usually the MP3 version of an album is cheaper than the physical CD.  

Why would Amazon do this?   My guess is that this is a combination of things.   First of all I assume they sometimes put CD's on sale as a promotion or to move product out of inventory.   I assume thats why the CD is cheaper in general, the CD price has been discounted for some reason.   But the CD and MP3 prices don't seem to move in lock step for whatever reason.   I'm guessing it is because the two products are generally treated differently and sold to two different audiences more or less.   Also if the CD is on sale to move inventory they don't have to worry about moving MP3 product out of inventory on the other hand so there isn't a reason to put the MP3 on sale in that situation.    I don't know but its also possible that when they sell MP3s they have license agreements with the record producers that are different than the agreements for selling CDs.  I don't know really this is all just speculation on my part but I'm assuming theres logical reason behind it that doesn't include Amazon trying to push you to buy a CD which they then have to pay UPS to deliver to your door.

Anyway, if you're buying music on a site like Amazon make sure to check and see how the CD price compares to the MP3 price.   If the CD is cheaper and has the free auto-rip MP3s then theres really no reason to pay more for just MP3s.

--This article may contain referral links which pay this site a commission for purchases made at the sites.

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