finance

44 cents to mail now!!?

Starting Monday, it costs more to mail
http://www.cnn.com/2009/US/05/10/stamp.prices/index.html

Shoot… got to go get the 2 cent stamps… dude! Only if I had bought the forever stamps…

Wait a minute… huh? Why the hack then would anyone buy the 39 cent stamps or 42 cent stamps? The cost is one issue, and going to the post office to get the extra stamps is another. Two strikes against that. I don’t get it…

I mean… why not everyone stocks up on stamps? Ever since 1919, the stamp price has ever been increasing [costofstamps.org]. So then, why not simply buy the forever stamps?

If you bought 1000 stamps in 1919, it’ would have cost you 1000 x $0.02 = $20. Using these 1000 stamps today will give you financial value of 1000 x $0.44 = $440 !!! That’s 22-fold, or 2200% profit! So each year, you make 2200% / (2009 – 1919) = 24.4% . Wow… That’s much better than putting money in your CD! In fact, that sounds like an investment idea, doesn’t it?

Not so fast… at least that’s what they want you to think. If there were no inflation, then yeah, let’s all go get the forever stamps now, as this stamp price curve seems to be an ever-rising stock.

Let’s compare CPI with the stamp rate:

thesimpledollar.com

Interesting…! You see, the stamp rate (green line) is following the CPI (blue line), always being a little bit higher. The only times the stamp rate was lower were right before the price increase.

So, keeping tons of forever stamps won’t help you much in terms of investing. However, it is true that you will get the best deal by buying the forever stamps right before the rate goes up.

I am almost done here. Just one more point.

I honestly think that this is a win-win situation.

In the post office’s point of view, that “deal” for the consumers is probably not significant. After all, selling a roll of 2 cent stamps may be even a bigger loss, both in manufacturing and service fees.

Conclusion: relax, especially for those who don’t mail that frequently.

That’s my two cents.

Free FICO scores???

I am assuming we all know about getting our annual free credit reports from AnnualCreditReport.com. However, to get your FICO score you got to pay for that. What!!?

If you google a little you will see lots of free credit scores services, but most of them just lure you to get on a trial service for a few days. That’s not cool man…

Then I came across this blog post that talks about Credit Karma, still in beta, offering free credit scores with ads. Here is an interview with Credit Karma CEO Ken Lin on his purpose of setting up his website.

Here is a screenshot:

Even though this is only your estimate FICO score, it’s close enough. At least you have an idea before planning to make any big purchases.

You DO need to give out your SSN for this service, as this is the case for all other credit checks. So stay calmed. But if you are comfortable to use things like Mint.com, then you will probably be ok to give Credit Karma a try.

Why/How is AIG using the taxpayers’ money?

I found this lecture video explaining quite well why and how AIG is using the taxpayers’ money for this whole financial mess. Before watching this, you should watch this past post Crisis of Credit Visualized first to understand the bigger picture.

http://vimeo.com/moogaloop.swf?clip_id=3841214&server=vimeo.com&show_title=1&show_byline=1&show_portrait=0&color=&fullscreen=1

After watching this video, you should know why the taxpayers have been so upset at AIG.

If you want to dig deeper into these financial background details, you can check out these Whiteboard videos yourself.

Saving vs Spending

piggy-bank-on-money-md1I read this interesting article, suggesting that spending is as important as saving. You have heard of buyer’s remorse, but holding back too much will lead to regrets years later as well. Here is the article:

If You Save Too Much — You Might Regret It Later!
http://consumerist.com/5182167/if-you-save-too-much–you-might-regret-it-later

Well, I will give you one more reason to spend at recession like ours right now. You know one way the US is handling the foreign debt is to simply print more dollar bills? How much are they printing? Hold your breath, and watch this fox news clip.

Of course the US government is doing a lot more other things for the economy, but this bill-printing fact worries many. You may be saving a lot right now by not buying this and that (hopefully not leaving regrets), but in a year or so you may end up having only half of your wealth due to inflation.

Scary stuff. What to do? I think you should buy what is needed such that you can live an enjoyable life. (An enjoyable life doesn’t necessarily mean a luxurious life, as many family bonding moments take place during tough times.) At the same time, save some money for a rainy day. Staying home and getting social security is not a bad idea either.

As always, it’s better to give than to receive. 😉

Crisis of Credit Visualized

I found a really cool video that explains how the financial crisis happened.
http://crisisofcredit.com/

http://vimeo.com/moogaloop.swf?clip_id=3261363&server=vimeo.com&show_title=1&show_byline=1&show_portrait=0&color=&fullscreen=1
The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.

Finance software




Since some of my friends talked about finance, I guess now is a good time to bring this up. Mint.com is an online personal finance software. From the website description: “Mint downloads, categorizes, and graphs all of your finances automatically every day— so you don’t have to. Know where you’re spending, without spending any effort.” I remember back in the old days I wrote all my expenses down on my little note book, but those days are gone. Mint can analyze all of your transactions and plot graphs for you in a secure https manner. All of these come to you for free! I am not sure when they will start charging but I would be more than happy to pay for their service. To say the least, it will save you tons of time if you are in the business of taking care of your personal finance.