Posted: November 30th, 2010 | Author: Joe | Filed under: Debt, spending | Tags: Debt, Rant, Saving Money, spending | No Comments »
A coworker of mine was lamenting a problem with some friends of he and his wife the other day. They were having some difficulty dealing with the fact that they didn’t seem to be at a point in life that their friends were at. To put it bluntly, they had a bad case of envy.
My coworker, let’s call him Jim, and his wife (Amy) save up for big purchases. They want to buy a bigger house to make room for their expanding family, and they’re saving up for a down payment. They pay off credit card every month, have no student loan debt and own their single car outright.
Their friends, by contrast, have new car, a bigger house and make the same or less income than Jim and his wife.
Naturally, this is bothersome for Jim and Amy. They feel that they are the ones who should have the new car, new television, bigger house. Jim was beside himself with annoyed confusion when he told me about this.
It’s actually a topic that hits home for me. My wife and I have friends who always complain they have no money, yet seem to have the latest and newest stuff. They have a new minivan , a 42″ flat screen television, new computer, iPhones – you name it! My wife and I have a used minivan, a 27″ CRT monitor and tracfones.
But here’s the real difference – we don’t have a huge new car loan, and we don’t have a big credit card balance, and we don’t live paycheck to paycheck. It’s difficult to see them seemingly cruise through life without any money worries. I have to remind my wife that they will have very little beyond Social Security when they retire, because they save nothing. They’re going to be a world of hurt if one of them loses their job.
Or maybe not.
I wonder how many Americans are feeling the same way. Especially in the last couple of years of bailouts, handouts and general welfare that seems to reward irresponsible behavior. In such an environment it’s easy to wonder if doing the right thing makes sense anymore.
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Posted: October 27th, 2009 | Author: Joe | Filed under: Scam | Tags: Opinion, proflowers, Rant, Scam, spending | 25 Comments »
I can’t believe it and I’m a bit embarrassed to admit it, but I was scammed. I used Proflowers.com recently to send flowers to my wife (our anniversary) and my mother (her birthday) and thought I got a great deal. The flowers were beautiful, and they seemed to last forever. It wasn’t until two months later that I realized I was scammed!
Here’s how it happened.
At the end of my order process, I was asked if I wanted to sign up for additional coupon offers from a 3rd party service. Since I make it a rule to try to spend as little as possible at all times (ask my wife), I selected “No thank you” and continued with my order.
Despite my having selected “No thank you”, I was enrolled in this bogus program anyway.
The program is called “Easy Saver“, and as near as I can tell they charge you $14.95 a month to grant you access to a web site that contains coupons.
The problem is that not only was I being billed for a service I wasn’t using, I was being billed for a service I didn’t even know about! I was never contacted by the 3rd party (Easy Saver) to congratulate me on my enrollment, much less notify me of how to make use of their program. They seem to exists solely for the purpose of skimming $14.95 off unsuspecting proflowers customers.
I’m lucky I noticed the $14.95 charge on my credit card with an odd business name next to it:
“$14.95 ezsver rw 1-800-355-1837″
It was only after I went back to the previous month that I really became suspicious. There I saw a charge for $3.95 – and that was the month after my proflowers purchase appeared on the credit card.
I called the 1-800 number to talk to “ezsver” and that’s when I discovered they were really “easy saver rewards”. I asked the customer representative who easy saver is and how they got my credit card number. She told me that they partner with a number of popular Internet and 1-800 companies, like proflowers…
All in all, there were 2 unauthorized purchases beginning 1 month after my proflowers purchase – 1 charge was a small, almost unnoticeable $3.95, and after that came the monthly $14.95.
I must say that the customer rep at easy saver was very pleasant and very helpful, and I was able to cancel my “subscription” as well as have the previous charges reversed without any problem. But the way the whole thing went down is what bothers me the most.
The fact that proflowers signed me up when I explicitly opted out, and the way that easy saver never sent any correspondence to inform me that I had been entered into a subscription service bothers me so much that I will not be using proflowers again, nor will I be recommending their services to others.
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Posted: October 25th, 2009 | Author: Joe | Filed under: Retirement | Tags: 401(k), Opinion, Rant, Retirement | 2 Comments »
I originally wrote this article back in January for the Saving Advice Blog, but I’ve seen a lot of chatter recently about it again – including this issue of Time magazine – and I feel very strongly about protecting individual retirement savings from the government, so I thought I’d go on the record here and post my thoughts about it on Simple Debt-Free Finance. 
And now, without further ado, the article.
With the death of defined pension plans, 401(k) retirement plans have become a staple for many employees, but the recent financial turmoil has put these once infallible savings vehicles under the microscope. There have been numerous news articles detailing the stunning losses of the stock market since October of last year. Such stories usually offer a profile of some victim around 55 years old who was preparing to retire in the next few years, only to have 25% or more of his 401(k)’s value wiped out over night.
This has led to calls for the government to step in and fix the problem. Economist Teresa Ghilarducci has put forth a plan to do just that, and congressmen George Miller and Jim McDermott support it. Under Ghilarducci’s plan, contributions to a worker’s 401(k) plan would no longer be tax deferred. This would effectively tax the contributions twice – once when you earn the income that you then contribute to the plan, and again when you withdrawal the money in retirement. Under such conditions, why would anyone continue contributing to a 401(k)?
Ghilarducci’s plan also proposes implementing a government provided “guaranteed retirement account” to be administered by the Social Security Administration. Under this plan, worker’s would be required to invest 5% of their pay, and would receive a guaranteed return of 3%, adjusted for inflation.
This is the wrong way to fix the problem.
First of all, why would we want to reinvent social security when it’s been documented to be unsustainable? The government has already tapped the money many times over that was supposed to be set aside for the program. Isn’t this just recreating that problem? Secondly, the stock market has returned, on average, roughly 10% per year since WWII. How would worker’s be better off earning 3% per year? Thirdly, it doesn’t address the real reason 401(k) plans have left people short on their retirement funds.
The 401(k) plan did not fail. The stock market did not fail. This person simply had too much invested in the stock market for his age and retirement goal. The problem lies with the individual, and the lack of information and education provided to the individual, not with the 401(k) plan itself.
401(k) participants are investors, whether they know it or not. The problem is that most do not. The real reason 401(k) plans fail to the extent that people perceive them to is because the participant often lacks the education to make appropriate decisions. Many 401(k) participants don’t want to be investors, they just want to do their job and live their life. Another problem with 401(k) plans is that the individual is often entirely in charge of their investments, and have no safety valve in times of extreme panic or greed. Just look at the recent economic turmoil and see how many have pulled everything out of their 401(k) because they don’t trust the market. Once the loss has happened, pulling out is the worst thing they can do, but these people are simply reacting emotionally. They don’t have the background to approach it rationally.
The real way to fix this problem is education. Employers could provide professional assistance by way of making an impartial financial planner available to employees in the plan. Most plans provide life cycle or target date funds where employees choose the fund with their target retirement date, and the plan manager gradually adjusts the allocations between stocks and bonds over time. This is essentially a set it and forget it approach that has been proven to work over time. But so many employees are ignorant to their existence and their use. If that 55 year soon-to-be retiree had a proper asset allocation in his 401(k), he would still be on course to retire, though he might still choose to work a little longer for a better post-retirement lifestyle but the choice wouldn’t be so drastic as losing a quarter of your retirement.
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Posted: January 16th, 2009 | Author: Joe | Filed under: Insurance | Tags: Insurance, Rant | No Comments »
I received a letter in the mail yesterday from an insurance agent of a company who shall remain nameless. Let’s say, our realtor worked for the same company. 
Anyway, this letter is in the form of a questionnaire. The agent would like me to “check off the products below that interest” me. Excuse me? The salesman would like me to fill out the form so he can try to sell me something I don’t want?!
If I wanted any of the products they offered, I’d contact him!
This is the snail mail equivalent to the telemarketer who keeps leaving ,a recorded message on my answering machine. No, it’s worse – It’s the telemarketing company that greets me with a pre-recorded message to stay on the line and wait for a telemarketer to try to sell me something I don’t want or need. It’s crazy…
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