October Net Worth Update

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I'm planning on winding this blog down. I've enjoyed maintaining the project for the past few years, but I'm simply out of material that interests me. To wrap things up, I'll finish up the year with a few more net worth reports and then discuss my 2007 and 2008 goals. That seems like a nice way to put a period on things.

October was another good month. My net worth advanced by about $6500 to settle at $295k. Spending and saving was par for the month. A few of my investments made some healthy advances too. Sorry if this sounds repetitive - these net worth reports sound the same every month -- spend a little, save a lot, and net worth marches up. It's not a complicated formula.

I promise that the last two months of the year won't be so boring. I've got a few bonuses that are about to pay out. So my net worth is about to make a few leaps and bounds before the year is out.

Happy belated Halloween.

September Net Worth Update

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What the market taketh away, the market giveth back. Ok, so I butchered that cliché pretty badly. But it's still an apt description of the past month. I managed to recover all of the unrealized losses that we all saw in July.

September saw my assets advance $9500 to a total of $378,302. My liabilities declined by about $750 to $89,602. That leaves my net worth at a $288,700 -- a $10,232 gain for the month. That's pretty damn good.

I'm still on track to meet all my financial goals for 2007. Once December wraps up, I'll revisit those goals and measure my performance. If only every month be could be this productive...

First CD Matures

I've never really been a fan of certificates of deposit. With the advent of high-yield savings account, CD's just seem like they're more trouble than they're worth.

All that changed last 12 months ago when a local credit union was offering a promotional 1 year CD that paid a 10% APY on balances up to $5000. That was just too good to pass up. A year has elapsed now and my CD finally matured today. The effective APY was actually 10.5%. That was a nice little suprise. Unfortunately, none of their current rates are competitive anymore, so the funds are outbound back to my GMAC money market account.

Anyway, I wasn't too impressed with this credit union. Their website was ameteurish and there was some snafu with the December interest payment getting credited to everyone's accounts, rescinded, and then reinstated in January. That caused all kinds of headaches for me once tax-time came around. All in all, I don't plan to do any more business with them in the future.

I understand the value of a CD in a falling rate environment. But the rate spread is so small compared to savings accounts at the leading online banks, that it hardly seems worthwhile except for only the largest of accounts.

Tips for An Overbooked Flight

Overbooked flights are a great opportunity to make some extra money. Depending on how much you fly, there's potential to save hundreds of dollars if per year if you're willing to "pay" yourself for a bit of inconvenience.

I'm always amazed at the number of people who are completely unwilling to take advantage of this sort of opportunity. Even though the airline usually puts you on the next available flight that departs a few hours from your original flight, the vast majority of people are unwilling to give up their seat.

Usually, the offer to buy your ticket begins at $100 or $150 and there are no takers. Typically, people will begin volunteering once the offer escalates to the $200-$300 range. My personal best was a $400 travel credit that I earned last year for accepting a position on the next flight - three hours later.

If that sort of dollar/hour proposition has appeal to you, then here are four tips that I think work well to maximize your take:

1) Everything's negotiable. The ticketing agent is charged with buying-back the overbooked tickets at the lowest possible price, but she HAS to get the job done before the flight can leave. The price WILL go up if there are no takers at the lowest price point.

2) The ticketing agent isn't really negotiating, but you are. She's just doing her job. She's got a set procedure and price escalation time-table. She doesn't care how much the buy-back sells for -- it's the airline's money -- not hers. There's no need to use any negotation tactics with her.

3) Your real competition is the other passengers. It's an auction. It's up to you to decide how much for which you can hold out.
- If it's a business-heavy flight like a Monday morning puddle-jumper, most passengers can't give up their seat. Hold out for more.
- If it's a departing flight to a destination city, passengers are less willing to give up their seat since it will eat into their vacation time. Conversely, If it's a returning flight from a destination city (like Orlando to Newark), then you'll have more competition among other passengers who are willing to stay a bit longer.
- Finally, single seats go for a premium. Most passengers are traveling with someone else. If you're lucky enough to be traveling alone and the airline only needs to buy one seat back, you stand to make a killing. That's how I earned my $400 travel voucher.

4) My preferred strategy is to deliberately approach the ticketing agent as soon as they ask for someone to give up their seat. I politely inform them that I'm willing to sell mine back for a substantial premium above their first offer -- usually $250 to $400, depending on how much competition I think I'll have. The agent will decline my request and tell me that I have to wait for the price to escalate to that point. That's fine. I then make it a point to hover around the desk and act in a manner as to give off the appearance that I've accepted the first offer. I'll put my bags down, make a few phone calls, and keep checking my watch. I'm just trying to deter others from coming up and actually accepting the small offer. Further, once the agent knows she has a "taker" at the $250 price-point, she's more apt to move the bid up a bit quicker just so she can get her job done and move on to the next task.

This strategy has worked for me in the past, but I've also still gotten "underbid." I usually get underbid when there's a very short wait for the next flight. Those "bumps" just don't command the premium that bigger delays can. For some reason, many people are willing to take a $100 credit for an hour's worth of inconvenience, but fewer are willing to take a $300 credit for three hours of inconvenience. The time/dollar proposition remains the same. And if someone wants to pay me to $100/hour to listen to my iPod and read a magazine, then I'm cool with that.

Yard Sales

Garage sales... rummage sales.... yard sales.... I think the term varies from region to region. But no matter where you go, the practice is pretty much the same. You wake up early in the morning and stack up a bunch of your old crap on your driveway in the hopes that someone else wants to pay you for taking it away. It's not a bad idea in principal, but in practice, I hate it.

I'm a garage sale snob. I think they're tacky and wouldn't dream of holding one. They tend to attract a bunch of looky-loos and cheapskates who want to haggle over the matter of fifty cents or a dollar. I think garage sale patrons also get a vicarious thrill out of snooping through other people's stuff. And at the end of the day, a lot of your old crap is still sitting on the driveway. No thank you. My used stuff either goes to the donation box or straight to the dumpster.

If you want to hold a garage sale every weekend, then have at it. It's your property. But I'd be more than happy to sign an HOA agreement with an article that explicitly bans yard sales from my neighborhood. Yes, I'm one of those people. ;)

Investing With A Conscience

As investors, we have a vast array of financial instruments available to us that we may adopt in order to grow our wealth. We often measure those investment choices in a risk vs. reward paradigm, but those certainly aren't the only two criteria that can affect our decisions on where to invest. When deciding where to deploy your capital, has your conscience ever prevented you from investing in a company?

I'd venture to guess that we all would draw the line in the sand somewhere. Where's your line? Vice activities like tobacco and alcohol? Environmetally damaging industries? Human Rights violations among the company's workforce? There's probably just as many answers as there are people to answer the question. Personally, I choose to abstain from investing in gambling and tobacco stocks. I eschew these industries because I'm principally opposed to the activities from which these industries profit. While tobacco probably comes as no surprise, I'm probably in a smaller minority when it comes to gambling stocks.

I see no redeeming value or social good that comes of gambling. Even when done in moderation, gambling systematically removes wealth from the poorest segment of a population and concentrates those dollars amongst their investors. The product that they "sell" is often couched in euphamisms like "entertainment" or "gaming." But in reality, the product that they're selling to their patrons is a fleeting and illusory hope of wealth.

Despite my personal misgivings about gambling, I also tend to respect these companies' rights to peddle their vices to those who choose to abuse them. That's just some of my libertarian tendencies showing.

I'm sure you have a different point of view. So how about it? Are there any industries that you refuse to invest in based on principal alone? Further, how principaled are you? Would you refuse to invest in an excellent mutual fund if 2% of its holdings are composed of Altria, the holding corporation for Philip Morris?

August Net Worth Update

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Time for another monthly net worth statement. August faired better than last month's bloodbath, but I still consider it to be a disappointing month. My net worth ticked up by only $3488 to settle at $278.5k for the month. Given the erratic market behavior, I suppose I should just be grateful for any move in the positive direction.

The net worth increase was moderate because of further erosion of the value of my equity investments and a particularly expensive month. There were two vacations on the calendar for August and they each soaked up a hefty chunk of this month's income. Hopefully, next month will be a bit kinder to my bottom line.

On a brighter note, I managed to earn quite a few bank rewards this month:

• I redeemed my sixth and final $50 cheque for the year from Chase for using their Rewards credit card. I've now maxed out their rewards program and will move my spending to another cash-back credit card.
• I finally got the second promotional $100 credit from Citibank for opening up a plain-jane checking account in December of last year. Immediately after receiving the funds, I closed the account. I don't like doing business with Citibank and only opened the account to receive the incentive.
• I received an additional $100 from Chase for opening a new checking account with them a few weeks back. I closed a similar account down a few weeks prior for the express purpose of qualifying for this bonus.
• Finally, I called Chase to complain about my missing $250 rewards credit that I believe I deserve for opening up a Chase Freedom credit card a few months back. It took a transfer to their retentions department before they relented. I expect the rewards credits to show up on my next statement.

Altogether, I earned $500 in August from various bank promotions and rewards programs. That's not a bad haul for about 30 minutes worth of work.