Nels Wadycki » Personal Finance

Kiplinger’s is really abstracting things this month

Nels — Fri, 08 Jan 2010 19:46:16 +0000

I’ve never been a huge fan of Kiplinger’s, but they do provide solid advice sometimes. I haven’t been needing as much financial advice (at least not the Hot Stock Top kind the magazines use to fill in around the stuff that’s the same every month) since I finally got most of my stuff automated (and invested in a single general mutual fund). But in the February issue, they’re really pushing it…

Here’s 3 headlines from the cover:
Double Your Income In Retirement
Saving Enough? Use Our Formula
5 Steps to Retire When You Want

I can summarize the first two in exactly 4 sentences:
1. Work until you’re 70 instead of 62.
2. Saving less than 5% of your pay? Work forever.
3. 5-14% – Work part-time.
4. 15% or more – You’re totally good.

Yup. I’m pretty sure it’s all that simple.

The third article (5 steps to retire when you want) is sort of decent, except the first step is: cut spending. Gee, thanks.

Next up: Get advice. Yes, from the internet where financial advice is not only plentiful, but free. Sure, it’ll take a little longer to do it that way… or you could buy a single book for $10 and go with that. That’s what I did, and I’m feeling pretty good about it.

Third step to “Retire When You Want” is to consider a Roth. Consider? Just consider it? They’re really aiming for LCD (Lowest Common Denominator) with this one. I mean, yes, people need this advice… but calling it “Retire When You Want”? If you really want to retire when you want, you need to be maxing out your 401(k) and contributing to a Roth and have a taxable brokerage account too. You cannot just consider a Roth. You need one.

Step 4 – Plan Your Exit – appears to be a cute story about how some couple went on a retirement cruise and rented their house. They’d saved up three years worth of living expenses, so they survived the Great Recession. I think the advice comes at the very end when they insinuate that you need to have a taxable brokerage account with a bunch of money in it. You opened one of those and put a bunch of money in it, right? Yeah, right after you considered opening a Roth IRA.

Step 5 is actually very good advice: Create Income. I’d argue you want to do this now as well as in retirement, but the fact that they mention it is good, because I think a lot of people do just focus on saving and don’t think about how much income their savings are actually going to generate. They provide a couple solid leads on how to provide a stable income during retirement.

Okay, since I hate people who tear ideas apart without making a positive contribution, here’s my positive contribution:

1 Step To Retire When You Want
1. Take action.

That’s right. Do something. Anything. But please, don’t just read another article and think “hmmm, I wonder if there’s other advice that would {contradict|further help|provide additional insight to} this advice?”

Ramit Sethi (my personal financial advisor) has this blog post which will tear you apart and provide the same positive contribution.

The amazing thing is, this applies to much more than personal finance. For example, if you want to start a blog, you can spend time reading about how to attract people, research good topics, look for lots of different templates and themes, evaluate a bunch of stat tracking packages, look for potential advertisers, or you can just start writing. That’s the core of blogging, just as the core of saving for retirement is saving money.

Final note, yes, I do understand that personal finance magazines would go out of business if they only published one article every month that just told people to save money. And there’s other stuff they have like what documents you need to keep in case of an audit, college rankings, FAQs on new credit card rules, etc. So, not a complete waste of money… I just thought this one was really stretching it for “cover story” articles.

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Zong+ … PayPal Killer? More like credit card killer

Nels — Fri, 30 Oct 2009 16:34:57 +0000

While this post from TechCrunch on Zong and the new Zong+ is long, and covers a lot of ground on Zong, it leaves out what David Allen might call the Crazy Maker viewpoint.

Leena Rao (the author) pits Zong as a potential PayPal killer, which it certainly could be, but my Crazy Maker idea is that Zong could take on credit cards as we know them.

I’ve already mentioned this concept to my wife so many times I’ve learned to stop even saying anything remotely related to it, but: Why can’t I pay for stuff using my phone instead of my credit card? Sure, I’d still probably have to carry around my library card (until they start accepting phone numbers instead of library card numbers), cash, and my driver’s license. But, I wouldn’t have to worry about losing my wallet or having someone steal my card or spy on my card number. Why? Well, if you’re asking, you clearly didn’t read the TechCrunch article (and I can forgive you for that), so here’s the short version:

1. You give Zong your phone number and – with Zong+ – your credit card number.
2. You buy something and put in your phone number instead of any other number or email or whatever.
3. Zong sends you a PIN number via text message.
4. Put in the PIN number and you’re done. Paid!

Now imagine… You’re at the grocery store… instead of sliding your card in the credit/debit card machine, you punch your phone number into a PIN pad. A text is sent to your phone. You put the PIN from the text into the PIN pad. Done!

Yes, I realize it’s not all that much easier than the process for using a credit card, but it means that someone can’t take your card (if you drop it or leave it somewhere) and go on a shopping spree. More importantly, identity thieves won’t be able to sell credit cards they steal in shady internet chat rooms because they’d have to have your phone to get the PIN number text message in order to complete the transaction! Bam, said the lady!

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Fraud “Protection”

Nels — Thu, 27 Aug 2009 17:14:32 +0000

Evidently buying a plane ticket for Thanksgiving and then signing up for Google AdWords (to use a free credit) within 3 days of each other is frowned upon by Capital One. At least I used Skype to call their 800 number and saved myself 20 minutes on our cell phone plan (more time for my wife to talk on the phone). And they give good rewards, so I can’t complain too much.

What scares me a little bit, though, is that they didn’t have a phone number on file for me. Yes, I did just change it recently to my Google Voice number since we’ve decided to cancel our landline, but I got a confirmation email that it had been changed, so it’s worrisome that it wasn’t showing up.

What scares me more is that though they didn’t have a number on file, someone who was “from the Capital One Fraud Department” called my Google Voice number and left a message with a different 800 number to call. I checked that number on 800notes.com (cool site, btw), and it seemed to be split about whether it was a scam or a real number. I called a number from Capital One’s website and got through to their Fraud Department, verified charges, and got back access to my card, but I am still wondering if that person who called my GV number was really from Capital One or if The Scammers have figured out a way to know when your account has been held up for fraud and use that as an “in” to get you to give them all your information.

It’s not frightening to me on a personal level because, as you can see from my story, I am not about to call someone back who says they’re from a credit card company (or bank or any other financial institution) without checking the number and going to the company’s web site first. But I am scared for all the people who are more trusting (and/or worried about their credit and credit card fraud) and will call that number back without hesitation.