Financial Samurai

I’ve had my Citibank home rebate credit card for 7 years.  It’s my one and only personal credit card I use for everything.  Once a year, a rebate of 1% of total spending gets credited toward my mortgage.  I was totally happy with the card and then one day, I get a letter from Citibank saying they are changing it out of the blue.  They didn’t ask me whether it is OK or not, they unilaterally made the decision for me.

I’m not particularly fond of credit cards which give me rewards points so I can go buy things I don’t need.  Unfortunately, as a replacement card, that’s exactly what I’m getting!

It really gets my goat that a credit card issuer can just changes things at a whim.  You’d think that after all that’s happened in the financial world, there would be more protection for consumers.  But, as always, I’m disappointed with how my tax dollars are spent, and nothing really changes, just the people in power.

THEIR LETTER TO ME Read more…

If you run a small or medium sized business, do you employ any family members? Currently, more than a fifth of small business surveyed (21%) do so.  What’s more interesting is that a staggering 94% of SMEs employing family members felt that their business had benefited as a result.

I’ve always believed hiring a family member can be a double-edged sword.  Mainly, what if they start taking advantage of your relationship and not doing what their job entails?  Your Uncle Bobby might think that because he took you to all those ball games growing up, it’s payback time, and he shouldn’t have to work as hard as other employees.  On the flip side, there’s no better joy than to hire a family member who is need of employment.

LET’S TALK FAMILY Read more…

According to the IRS, the maximum mortgage amount you can claim interest on is $1,000,000 on first or second homes if the loan was taken after Oct 13, 1987.  You can also deduct interest on $100,000 for a second mortgage loan used for anything other the purchase of your first or second home.  More specifically, home equity debt means “any loan whose purpose is not to acquire, to construct, or substantially to improve a qualified home“.  Interesting right?  In other words, you can take a $100,000 home equity line of credit to buy a Porsche 911, an incredible home theater system, and do a little landscaping and all the interest is deductible!  No wonder why everybody took out so many Home Equity Lines Of Credit (HELOC)!  (Someone tell me this is wrong, b/c it just doesn’t sound right.)

You already know that the government is sexist because the maximum mortgage interest deduction limit stays at $1,000,000 even though both people could have $1,000,000 mortgages.  It’s beyond me why the government thinks two people who want to marry with $1,000,000 mortgages each, don’t deserve to keep their deductions.  But at any rate, just be aware that if you can afford such a mortgage, you might want to think of this crucial loss of deduction before you get married.  With rates averaging 5%-6%,  you could literally lose out on tens of thousands in interest deductions!

DON’T FORGET THE INCOME PHASEOUT KILLER TOO Read more…

Men are dogs.  If you give us an inch, we’ll take a mile.  But, if you put us on a leash, we’ll gnaw it off and go even more crazy once we’re free.  There’s a fine balance between loving your man and smothering your man.

Young and Thrifty wrote an entertaining post entitled, “When Being Generous Doesn’t Pay Off“, where she chronicles her deadbeat ex-boyfriend’s expectations of always assuming she will pay for everything.  She reveals that he was a high school drop out who never held a steady job.  Y&T is clearly an intelligent  and kind woman who has since found someone much better.

Which begs the question: With a male world population of 3+ billion, why on earth would any woman ever settle for a deadbeat loser?

THE REASONS WHY Read more…

“Sam, I absolutely hate my company and hate my job.  I can’t wait for some sucker to give me a big package so I can blow this joint and retire early.” January 17, 2011.

These are the words of an acquaintance who hit the jackpot when an upstart company in his industry decided to give him a two-year guarantee for 50% more a year.  In the employer’s mind, they think they are getting an experienced person with a great attitude and a long term commitment of building their business for 5+ years.  In my acquaintance’s mind, he’s jumping ship because he sees the dollar signs and plans to retire as soon as his two-year contract is over.

HOODWINKING, SOFT LIES, & MISMATCHING MADE PERFECT Read more…

According to one study by TwentySomething Inc, 85% of 2011 college graduates are moving back home with their parents. Meanwhile, another study shows that the real unemployment rate for people 25 years old and younger is a whopping 54%! I’m generally very wary of the mass media, because they are filled with bitter journalists who enjoy the pleasure in the suffering of others. However, even if we cut the percentages in half, these figures are still quite worrying.

There’s clearly two bubbles in the world today.  One is the most awesome Social Media bubble which is a godsend for those in the Bay Area who’ve been praying for another bubble to arise ever since the dotcom crash of 2000.  The second obvious bubble is in the education industry!  Parents and kids alike are delusional into think that private schools are worth their $50,000 a year in tuition.  Some are, but the majority of schools aren’t worth it.

DEFEND YOURSELF FROM UNHAPPINESS Read more…

Timeshares are often thought of as very luxurious and accommodating vacations that can even end up costing you less than traditional hotel vacations. Despite how wonderful these extremely luxurious vacations are, due to the recent recession many timeshare owners are in need of a way out of their timeshares.

Because of this huge demand from existing timeshare owners to sell their timeshares, a few troubling problems have surfaced. The main problem is that with all of this supply of used timeshares there is little to no demand to purchase a used timeshare on the resale market. This has resulted in many timeshares being listed on popular e-commerce sites such as eBay and Amazon for as little as $1. These listings are basically a last ditch effort to get out of the timeshare contract.

SO CLOSE TO TAKING THE PLUNGE Read more…

For some reason, some continue to not pay off their credit card bills every month.  Can you believe this nonsense? Who willingly buys something they cannot afford, and then pays massive interest on something for months, if not years?  That’s just silly.  Let’s get that 30 pound dumbbell and drop it on your toes.  After your metatarsals are broken, get a really long needle and start ramming them into your eyeballs.  Maybe after a while, you’ll realize how stupid it is to live beyond your means.

We have proposed creating government restrictions on what you can and cannot buy, and how much credit you can get based on your high school and college transcripts.  If you’re stubborn enough not to see the value of doing well in school, then you are likely stubborn enough to buy things you can’t afford.  The government can be a helpful big brother to save consumers from over-consumption.  Listen here, this is only one solution to help protect people from themselves.  You are welcome to offer up another novel solution too. Read more…