Is An MBA A Big Waste Of Time And Money?

UC Berkeley Haas School of Business MBADuring the summer of 2014, Personal Capital had the luxury of hosting three MBA interns in the marketing department where I consult part-time. One was actually a Harvard JD/MBA, which is darn impressive because she has to get into both schools separately. The other two were from Stanford. They did a great job brainstorming and executing fantastic ideas.

In addition to our summer MBA interns, our head of business development (Stanford), our head of client engagement (Stanford), our digital marketing executive (Michigan), our CMO (Cornell), and our CEO (Harvard) also have MBAs . Then there’s me, a Berkeley MBA grad. In other words, the marketing department is a majority MBAs. But having an MBA isn’t a requirement for joining. Relevant experience is much more important.

Most MBA graduates will probably say that an MBA is money and time well spent. It’s kind of like spending big bucks on a fancy dinner. To justify the extravagant expense, of course you’re going to tell yourself and all your friends, how incredibly amazing the dinner was. But we all know that spending $250 per person at Jean Georges isn’t worth 100X more than a tasty In N’ Out cheeseburger for $2.5.

For similar reasons why going to private university without a scholarship is probably not the best use of your money unless you have plenty of it. Getting an MBA is also becoming a tougher choice today.

For those of you with MBAs, be forewarned. This is not a cuddly, feel-good post on why getting an MBA is a no-brainer. There are a lot of hard truths from what I witnessed as a manager who consistently interviewed MBAs during multiple bull and bear markets. I’m also providing the perspective as an MBA eight years after graduating. Readers trust me to speak candidly, so that is what I will do. 

Someone Stole My Credit Card – What To Do?

Thief StealJust when I said nothing much happens with my credit card, somebody goes ahead and steals my credit card! But perhaps “stealing” is the wrong word to use in this situation, so let me clarify.

The last place I used my credit card was at the local Kelly Moore paint store. I remember taking it out, but not taking it back before I left. I remember the clerk who swiped my card for $43 for a gallon of hybrid paint. Yet, when I called back a day later to see if they had my card, the clerk said “no.”

Then I went back to the store the next day to ask the employees face-to-face if anybody saw my card. I can usually tell if someone is lying if I look them straight in the eye and ask them an important question. The manager on duty, whom I’ve seen the last four out of five times I’ve gone, hesitated and blurted out “nobody has told me about a missing credit card” before I finished asking my question. It was as if he already knew what I was going to ask. Hmmm.

I gave him my contact details in case anybody finds anything, and told him that someone took the card and went across the Bay to a Berkeley gas station and charged it up. The only way you can charge a credit card for gas is if you put in the credit card holder’s zip code. Given my zip code is the same zip code as the paint store, and the paint store was the last place I used the card, chances are high that one of the employees decided to keep my card and use it without my permission. (Thought: Perhaps change your credit card billing address to your work address so the zip codes are different)

It really stinks feeling suspicious of others. Everybody but one person in the store is innocent. Unfortunately, I no longer feel comfortable going there anymore.

When I was paying at the register one visit, one of the clerks asked me about the Frog Tape I was buying. “Hey, you trying to paint a straight line, or something?”

“Yeah, the line where the wall meets the trim,” I responded.

“I got a secret on how to paint a straight line real easy,” he said. “But it’ll cost you 5 bucks.”

I laughed, thinking he was joking as I admired his tattoos of serpent heads. I waited for him to tell me the secret, but he never did! WTF. I can appreciate a good hustle, but trying to personally extract another $5 after I’ve already spent $600 at the store is low quality.

Are Personal Finance Bloggers Some Of The Sexiest People On Earth?

Personal Finance Bloggers Are SexyI was eating dinner at my local Indian joint when a late 20s couple sat at the table right next to me. The guy, a new pharmacy graduate from UCSF was with a female pharmacy student. He was buttering her up with praise about how she’s so popular now that her research report got published in some pharmacy journal. She blushed with pride.

I tuned out their entire conversation for 20 minutes as I stuffed my face with chicken tikka masala until I couldn’t help but overhear one phrase. He awkwardly said, “I think I’ve gotta build myself an emergency fund, you know? I hear it’s a good idea to build this emergency fund so I don’t go into high interest credit card debt.”

Wahoo! Music to my ears and music to his date’s ears as well. As soon as he started talking about securing his financial future, the female pharmacist started leaning into the table all excited. “Tell me more,” she said with a sultry, but incredibly nasally voice. I’m pretty observant – like CIA observant – where I can tell you what color your shoelaces are and point out the stain on the lower side of your shirt 30 minutes after our meeting is over if questioned.

It’s pretty clear to me they’re both getting lucky tonight all thanks to some personal finance dialogue.

So I got to wondering: Are personal finance bloggers (and readers) just abnormal because we talk about money all the time? Or are we simply some of the sexiest people on Earth?

Let’s discuss!

Documents Needed To Refinance A Rental Property Mortgage

Mortgage Rates Today for 30 year fixed, 5/1 ARM, 3/1 ARM, 1/1 ARM

If you haven’t refinanced your property in the past several years, it’s worth checking the latest rates today. The 10-year yield is back below 2.5% as Wall Street economists scurry to revise down their interest rate assumptions once again. I swear they have the best jobs on Earth because they never, ever have to be right.

I am a firm believer that interest rates will stay at these levels +/- 1% for years. Information transfer is instant nowadays thanks to the internet, and policy makers are much more adept at managing inflation and unemployment in America. As a result, go with an ARM rather than a 30-year fixed mortgage to save yourself money.

The general rule is that any time you can lower your interest rate by 50 basis points (0.5%) and break even within two years, you should refinance. Nothing is more beautiful than locking in a low rate and paying down the loan with ever-weakening dollars thanks to inflation.

Unfortunately for landlords, refinancing a primary mortgage is simple compared to refinancing a rental property. The reason being that refinancing a rental not only requires various Home Owners Association board members to cooperate with the process if you own a condo, the bank does much more due diligence.

From the banks point of view, lending money for a rental is riskier because the default assumption is that you require rental income in order to pay back the mortgage. Therefore, the bank needs to add an added margin of safety in the form of a higher mortgage rate to compensate for their risk. Rental mortgages are usually 25-50 bps higher than a primary residence mortgage.

I just rented out my primary residence this summer at a rent that’s almost double all my costs because I’ve lived there for 10 years. But banks still quoted me for mortgage rates at least 25 basis points higher than the primary mortgage I took out for my new home. As a result, I kept my 2.625% 5/1 ARM mortgage with three years left on the fixed term. 

Steps To Get Out Of MASSIVE Credit Card Debt Due To Lifestyle Inflation

Lifestyle inflation and a mega yachtI don’t discuss too much about credit cards on Financial Samurai because I’ve only got three (a travel rewards card, a generic rewards card, and a corporate card) and nothing much happens except for racking up rewards points. Definitely use a credit card for convenience, safety, rewards points, and insurance protection if you can control yourself. But if you’re not careful, thanks to the ease of use and absurdly high interest rates, problems may ensue.

The following is a guest post by Debs, a middle income earning new grandmother who was able to amass over $140,000 in credit card debt! I asked her to share her story on how she did it, and how she is getting herself out of debt. Kudos to Debs for having the courage to share her story.

It’s embarrassing to admit, but I tell this tale as a warning to all people like me who are on the bandwagon of lifestyle inflation, “I deserve” and family struggles that may cause you to take your eyes off the ball and wake up one day to say “How did I get here?”.

We weren’t addicted gamblers or smokers. We didn’t have a lot of fancy toys. We drank moderately and yes, we had four kids and a large home to boot (purchased in 1991). Maybe a few travels thrown in here and there, but not excessive. There was some shopping for work clothes and things for our home. Maybe a bit of stress relief shopping, but nothing extravagant. That is my first message.

Our debt crept up on us without even realizing it. At least I didn’t realize the size it had grown to. I wasn’t watching the finances. I was only working hard to contribute to the family income. That was enough, or so I thought.