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Mar 242017

Your Emergency Fund Helps Your Credit Score

By |March 24th, 2017|General Personal Finance|1 Comment

thousandaireretirementYour three-digit FICO credit score is a key number, one that lenders use to determine who qualifies for loans and at what interest rates.

How often you miss payments, how much debt you owe on your credit cards and how much of your credit you are using all help determine how high this score is. But, the amount of money in your savings account, though, has no impact on your score.

That doesn’t mean, though, that having money stocked away to cover the cost of unexpected emergencies won’t have a positive impact on your credit score.

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Mar 162017

Relocating Abroad? How to Prepare Financially

By |March 16th, 2017|General Personal Finance|1 Comment

travel-164574_640This is a guest post from Pauline of InvestmentZen.com

In the past 12 years, I have lived in four foreign countries, on three continents. While it has been amazing for the most part, there are also things I wish I had known before relocating, and that is why today I would like to share my tips with anyone who is thinking about taking the leap and moving to another country.

Relocating abroad is an amazing experience. So much is involved in terms of logistics, finding a new place, learning the language, making friends, … that it is easy to forget about money matters. But if you are not careful, that international experience can cost you a lot. Here are a few tips.

Research the country you are moving to

I would suggest before relocating abroad that you spend at least a couple of weeks in the country you want to move to. You know, just to make sure you really like it before moving all your belongings and pets to the other side of the world. The romantic idea you may have of Thailand might not be what you’d experience in reality. Paris is a city of lights, but also of air contamination and traffic jams!

Join expats forums on Facebook and dedicated sites to make sure you can afford to live there, and that your expectations match people’s experience on site. Finding expats from your country will be easier to know what they miss from home and how they deal with it.

Talk to a tax lawyer

There are many tax benefits on relocating abroad. Talking to an international tax lawyer should pay for itself the first year. You might be eligible for the Income Tax exemption if you spend less than 35 days in the US each year. Ask them how you should handle your US investing accounts, your 401k, Roth IRA, and rental property if you are renting your house while you are away.

US citizens are required to pay taxes to the IRS even if they live abroad, but nothing prevents you from opening a company in your new country, which will be taxed locally. Again, these are just a few examples of things you should consider, and only a professional can give you advise fitting your precise needs.

Master international banking

One of the main concerns of expats is how to send money home or bring money to their new country. It can be tricky if you are unprepared. On the US side, I would not recommend closing any account you own. Even if they stay a bit dormant while you live abroad, re-opening them when you come back will be complicated. Same thing for your lines of credit, brokering accounts, and credit cards. It’s more, you can apply for a travel credit card to start earning free miles and hotel nights, as well as a credit card that doesn’t charge you a transaction fee when you use ATMs or buy things abroad. Expat forums are again a good place to ask for the latest cards and their perks.

Your local bank may have branches in your new country, so that might make things easier to talk to your branch manager and explain your plans of relocating abroad. Otherwise expect to have only a savings account in the new country, with a debit card at most, and plan accordingly.

Many companies have emerged lately offering affordable international money transfers, but if you have an account in US dollars in your new country, you can simply deposit a check from home and bring your money free of charge. There might be a delay of a few weeks for them to confirm the check though.

Live like a local

When I first moved to the UK, I though everything was so amazingly expensive, I got concerned my salary wouldn’t allow me to live well. Then, I talked to my coworkers who had lived there for years. They told me about the loyalty card at the supermarket, and the reduced meat you can buy after 5pm. They gave me the dates of the farmers’ market, and the URL of a money saving site that always sends tips and special offers. By month 2, I was living large on less than when I arrived.

Living like a local may also mean that instead of having milk and cereals in the morning, that are expensive goods, you could try the local breakfast. Splurge once in a while on the things you miss from home, but if you expect to live exactly like you do in the US, maybe relocating abroad wasn’t such a good idea.

Finding accommodation

If you are relocating abroad and have little information on your new city, renting a furnished place for a month might save you a lot of problems compared to directly signing a one year lease. Yes, it will be a bit expensive. But it gives you a month to get to know the city, the best neighborhoods, where your new friends live, where you’d like to go to the gym, and so on.

I have generally found that for stays over three months, getting a long term lease and buying furniture is worth it. Just get basic things until you’re sure you are going to stay. You can always donate it to charity if it won’t sell.

Relocating abroad is a wonderful way to experience new things, and if you are careful with your finances, it can also be a great move, allowing you to live cheaper and save a lot!

Mar 152017

Blue Apron Review

By |March 15th, 2017|Blog|2 Comments

IMG_1855To function well in today’s culture of fast-paced living, our bodies must be fueled with great food, all the time. For millions of Americans, however, this isn’t always possible and many are suffering for it.

Poor food choices as result of being almost constantly on the go are slowly eroding the health of young and old alike. But fear not, America – a viable and welcome solution to this problem has arrived at a front door (and dinner table) near you. Enter: Blue Apron. Here’s my review of how the Blue Apron service works.

What is Blue Apron?

Begun in 2012 and headquartered New York City, Blue Apron is a subscription-based weekly meal delivery service that helps even the most novice home chefs make great meals, in short amounts of time. For a fee, the company packages simple recipes and only the freshest ingredients to make those recipes and ships them direct to you.

How does it work?

After creating a username and password, you’ll register with your name, shipping address and credit card. From there, you select a plan type – two person or family – and your protein preferences or “taste profile” according to your personal preferences or dietary restrictions. The current options are vegetarian, beef, poultry, fish, lamb, pork and shellfish; you can select or opt-out of as many options as you choose. Finally, you select your preferred delivery day from a choice four – Wednesday, Thursday, Friday or Saturday.

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Blue Apron takes it from there. When your order ships, they send you an email notifying you it’s on the way. Your items will arrive before 8 pm on your preferred delivery day packed with large ice packs and wrapped in what looks like thermal bubble wrap. Sealed tightly, your order arrives ice cold and stays that way for several hours until you arrive home to unpack it.

What’s the cost?

The 2-Person Plan consists of 3 recipes delivered weekly and costs $9.99/serving or $59.94/week. The Family Plan lets you choose between 2 or 4 recipes a week and costs $8.74/meal. For the 2 recipe plan, it’s $69.92/week or $139.84/week for 4 recipes. Shipping is always free regardless of the selected plan.

Benefits and Drawbacks

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-Simple, from start to finish: Everything about Blue Apron – from the setup process to the actual meal prep – is easy to understand and even easier to execute. The blue and white interface of its website, mobile website and app are easy to navigate. If I had a question, the answer was easy find as headings and topics are well displayed. True to its mission, it makes the process of getting great food to your table as easy as possible with no extra effort on your part.

-The recipe cards are detailed yet simple: The recipe cards give detailed instructions that leave very little – if any – questions unasked. Each one gives a brief introduction of the recipe, a pictorial ingredients list followed by step-by-step instructions accompanied by step-by-step photos.

-There are no hidden fees or allusive “fine print:” Blue Apron doesn’t shy away from the details and no information is buried in fine print. The cost of the service is clearly displayed, there are no additional hidden fees and the terms of use are easy to find and understand.

-The bonus options and materials are phenomenal: Blue Apron offers an incredible set of bonus materials and options that are just as great the rest of the service. Its wine service provides a broad selection of wines that pair very well with the meals and can also be delivered to your door as often as you like. In addition to recipe cards, Blue Apron sends bonus materials. For example, I received a card entitled “Extra Helpings” that offered useful information on fennel and a bonus recipe to prepare it. The iOS app offers instructional videos and personal interest stories of their food suppliers.

-You can discontinue or “skip” meals at any time: Unlike subscription-based services of the past, Blue Apron allows you to “skip” any number of meals or discontinue the service at any time. No questions asked, you can opt out for as long as you’d like.

-The ingredients and food are spectacular: Simply put, the food tastes great. A home chef is only as good as the ingredients he or she is using and Blue Apron scores mega points for providing high quality ingredients. The flavor profile for each item is deep and rich making each dish a culinary delight time after time.

-It has limited alternatives: Nothing is ever perfect and Blue Apron is certainly no exception. Blue Apron falls short in that it offers few menu options for people with alternative diets. For example, there are no dairy or gluten-free options. While it offers consumers the option to change the week’s selected recipes, there are only a few additional options outside of setting your protein preferences and you may not find a recipe that fits your specific diet.

My meals: unusual but stellar

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For this particular week, I was sent three recipes – Moroccan Chicken, Chipotle Glazed Meatloaf and Spicy Shrimp Coconut Curry – with the latter being the crowd favorite. While each recipe offered something a bit out of my normal food routine, they all were a welcome change and opened my taste buds (and mind) up to delicious new options.

Blue Apron: A welcome guest at America’s dinner table

In a world inundated with take-out and highly-processed convenience foods, Blue Apron offers a refreshing alternative for home chefs all across America that are stuck in a recipe rut or repeated cycle of eating out too often. While Blue Apron certainly isn’t the most cost effective way to have home cooked meals, it’s a viable option for individuals and families with a budget that can accommodate it. The company has done the leg-work of finding the freshest and best-tasting ingredients for you; all you have to do is follow simple instructions to provide your friends and family with high-quality meals, each and every time.

Although Blue Apron is rather expensive, you can use this link to get $30 off your first order! Give it a try yourself and let us know what you think with your own Blue Apron review!

Now, you tell me: if Blue Apron were a potential dinner guest at your table, wouldn’t you want to invite it in to your home?

Photos courtesy of Katie Buys.

Mar 132017

Robert Shiller — Bubbles and Busts

By |March 13th, 2017|Blog|1 Comment

One of my favorite economists has to be Robert Shiller.  This is a great talk he gave at the London School of Economics.  He’s famous for writing Irrational Exuberance, a treatise on bubbles, in 2000, calling the top of the stock market bubble.  He updated it in 2007, also effectively calling the top of the housing market.

I was particularly interested in his commentary on naive theories.  Such as, “the price of land will always go up”.  People go around saying “they aren’t making any more land”, as if that makes any difference.  Now there’s a seed of reasonableness to this, but in a market economy price is an important feedback mechanism.  It might be that on average the value of land in a desirable area will go up if population increases.  However, there are a number of important possibilities that screw up your assumptions:

  1. Population may start to decline.
  2. People may be willing to pay less for land because of a shift in preferences.
  3. The value of the land might not be the same as the price of the land.

It’s in this third point that there is the most potential for harm in my view. If the price of the land does not need to equal the value, we can certainly no longer say that the price of land can’t go down.

All-in-all it’s one of my favorite lectures and I’ve been particularly interested as stock prices have continued to advance on corporate earnings that have declined over the last two years.  The possibility of corporate tax reform could be making stocks intrinsically more valuable, but I’m not entirely convinced.  This is part of the problem with assuming that price is equal to value.  You can always find some reason to blame for any market move whatsoever.  If stock prices were crashing folks would just be saying it’s due to corporate uncertainty surrounding H-1B visas.

Financial news programs are particularly bad about this.  Every day financial pundits give some reason for the market’s behavior.  If it goes down, it was because of X.  If it goes up, it was because of Y.  I’m guilty of this myself from time to time.  For example, I thought two things before the election.  First, that Trump was more likely to lose the election than to win it (I still think that this was true), and second, that if Trump did win, there would be a substantial market crash.  I may have been wrong on the first count, but I was definitely wrong on the second count.

This is part of the reason that it is so hard to predict short term market behavior.  If I had a crystal ball to discover that Trump was going to win the election, I still would have lost money trading on the news.

This is why I think the best plan for 95% of people is to buy into the stock market, at reasonable valuations, and never sell unless you are planning on using the money.

You should really treat your stock market investment like your home.  If someone knocks on your door and makes you an offer to buy your home, you probably wouldn’t sell, after all, you could always sell later.  Only if they’re offering you something completely insane do you even consider it, or if you were planning on moving anyway.

Watch the whole thing though, there’s a lot to unpack there. If anyone knows where to get the slide deck, I’m dying to find it!

 

Mar 72017

Personal Finance App: My Paribus Review

By |March 7th, 2017|Blog|0 Comments

My Paribus-Review Thousandaire
For as long as modern retail culture has existed, stores have offered refunds for price drops or price discrepancies on purchased items. Previously, you would have had to monitor your purchases and the prices of the items and then ask for the money back yourself when one (or any) of the following happens: you see the price has dropped, you weren’t given the correct sale price or missed out on a coupon. Fear not, online shopping world, there’s an app for that. Enter: Paribus.

What is Paribus?

Available for both Android and iPhone users, Paribus is a price monitoring service that refunds users for price drops on recently made online purchases from participating retailers.

For example, if you’ve recently made a purchase on Target.com and the price on a particular item drops not long after you made said purchase, Paribus finds that price drop and refunds you the difference.

How does it work?

After signing up with your email address, it links to your various online shopping accounts and does its magical work from there. While you continue to shop like normal online, Paribus works on the back-end and finds and scans all incoming receipts on your email for price drops to make sure you receive the lowest price possible – even after you’ve paid for and received your items.

When it finds a price discrepancy, Paribus files a claim with the retailer on your behalf, validates your purchase using the info from your account, and requests the retailer refund you the difference. You receive an email from Paribus notifying you of this activity and another from the retailer stating they’ve refunded you the money via whatever account with which you paid.

While I haven’t had any recent qualifying purchases, the app provides a “news feed” of sorts that constantly updates with recent price drops they’ve found and “paid out.”

For example, in just a 30 second time period, Kohls, JCrew, and Target paid out various amounts for clothing and house ware items with a top payout for the day of $74.50 for a Kate Spade handbag from Nordstrom.

The pros, the cons, and all the things in between

  • It simplifies life: Paribus has a lot going for it. With nearly zero effort on your part, it saves you money (and time) while you continue to live your life as normal.
  • It’s very user-friendly: The app’s interface is easy to navigate with its attractive blue and white color scheme and simple icon displays that present the information contained in the app in a straight-forward manner. The sign-up process is simple, maintaining your account and using the app is even easier.
  • It only works with selected retailers: Currently, the app works with only certain retailers. However, the list of participating retailers is extensive and includes big names like GAP, Target, Crate & Barrel, Staples and Best Buy. The entire list can be found within the “refunds” icon in the app.
  • It sacrifices privacy: For people concerned with maintaining their privacy, however, Paribus strikes out. Not only are you giving them permission to link up to your various online shopping accounts, you’re also giving them access to your email – and permission to scan it on a regular basis. Additionally, while they contact retailers on your behalf, they contact them as you. While it isn’t a huge issue, some people may find this concerning.
  • It charges you 25% of each refund: It’s true. But how else would Paribus be profitable? For every refund or transaction, it charges you 25% of the amount given back to you. When you set up your account, you link a credit card with which it uses to collect the fees. Linking a credit card is optional, but if you choose not to, you will cease to receive future refunds, making the app null and void for you.

Paribus: An app worth trying

For the frequent online shopper who doesn’t mind sacrificing a bit of privacy for time and money savings, Paribus is an app worth trying. In today’s culture where life often moves faster than anyone would like, Paribus provides just one more way for people to save money without sacrificing their valuable time.

For those still concerned with privacy or security issues, but are still interested in the cost-saving feature, there is certainly a risk in using the app and allowing it access to so much personal information. However, for people who shop online, plenty of other online retailers and apps already have this information. Will another one make a difference? If you’re vigilant in monitoring your accounts and do your due diligence in verifying and checking all transactions to ensure there isn’t any funny business going on, the benefits far outweigh the “costs” of using Paribus.

Finally, if you want to sign up for Paribus please use this link. It will help us keep on keepin’ on. 🙂

Mar 12017

5 Tips to Qualify for an Installment Loan

By |March 1st, 2017|Personal Finance Tips|1 Comment

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An installment loan is one of two major types of loan. You borrow a fixed amount from a creditor and you make a series of payments every month until the amount is paid off. These loans are the majority what people get for autos, boats, and home loans. Before you can get a loan, you need to ensure that the lender trusts you, which is why they look for a few key things. If you have bad credit finding installment loans with a lender that will approve you will be harder.

Here are some tips for helping you qualify for an installment loan.

Get a Copy of Your Credit Report

Your credit score is what lenders will use to figure out your suitability for a loan. High credit scores lead to being able to borrow larger amounts and lower interest rates. If your score is too low they may very well decline your application entirely.

Find out your credit score and use it to make a decision as to whether you should apply for an installment loan or not. Sometimes it’s more profitable to build up your credit score prior to taking out a loan.

Your Employment Status Matters

Lenders want to lend to people who have stable careers. It’s true that some careers are more favorable, but it pales in comparison to your employment status. Those who haven’t had their jobs for long or who’re unemployed should refrain from borrowing unless they absolutely have to.

Remain in a job for six months before applying for a loan. This will increase your chances of getting a loan.

Match the Lender to the Credit Score

Some lenders have policies in place where they won’t lend to people who have a certain credit score. There are no databases for this, but as a general rule of thumb most major banks won’t approve major installment loans for anyone with a score of less than 700. Private lenders tend to settle around the 640 mark.

Remember that declined loan applications are also reported on your credit record, so refrain from applying and hoping. Find the lender that fits your score.

Look at Your Debt-to-Income Ratio

Sometimes a credit score that falls below par can be overlooked if you have a high income or something else that makes you an attractive prospect. Your debt-to-income ratio is one of those statistics. Most lenders, if you’re trying to take out a big loan, will ask you whether you have any other loans. They may even ask to see a recent bank statement as proof of your claims.

To increase your chances of qualifying, you should make sure your debt-to-income ratio is as low as possible. This means that you can have active loans, but they shouldn’t take up more than a few percentage points of your income. If you need help figuring this out there is a good calculator here.

If you already have a big loan, consider waiting until you’ve paid it down.

Offer a Security Deposit

Installment loans, particularly the big ones, represent a risk to the lender. Sometimes who you are and what you say isn’t enough to qualify. The average installment loan is an unsecured loan, so you haven’t lost all hope. Consider a form of security to get the loan instead.

This is most often done with things like mortgages and car loans. You put up a significant asset as a security deposit and if you don’t make the repayments, the lender has the legal right to repossess that asset.

The pawn shop, for example, is a common type of arrangement at the lower end of the scale. You get your item back when you pay off the amount due.

Last Word – Improve Your Credit Score

The number one way to make sure you qualify for that installment loan is to improve your credit score. Ensure that you do everything you can to get your credit score up, which means making repayments and regularly paying off small loans successfully.