Sowing Wealth

Run From 401k Debit Cards

Did you even know that there was such a thing as a 401k Debit Card? If not, you're better off not knowing. There are times when products are created that are really bad for you and this is one of those times. What this card allows you to do is siphon off money from your retirement account for purchasing whatever you want whether it's movie tickets, a cruise for two or groceries for the week.

This is a very dangerous time to be offering such a product because people are hurting and they are tapping in to their 401ks to live. But making it really easy means they won't look at other ways to get by such as selling used things, getting a second job, etc. What's really insidious about these 401k Debit Cards is that you can slowly chip away at your retirement nest egg with the equivalent of an ice pick, a few dollars here, a few dollars there. Just the way you can build up a big credit card balance with meaningless repetitive spending, you could totally wipe out your future with one of these cards in your wallet. And don't think you won't incur the 10% penalty for early withdrawal because you will. The providers have some efficient way of tacking that on to your charges - plus you'll be taxed on the money as if it was ordinary income. What a bad deal!

I think those people that get these cards with the best of intentions will just wake up one day and realize they have $100 to retire on. If you're even thinking about getting one of these cards, I suggest you run for your life in the other direction.

Helpful Web Sites (autos/electronics)

The internet is such a good place to do research before you spend money. Don't make a major purchase without using this huge resource. I have a couple of helpful websites to share with you today: www.testfreaks.com and www.repairpal.com.

Let's start with TestFreaks, a site that's in Beta now. This site specializes in giving you unbiased reviews on thousands of electronic products from camcorders to mp3 players. They have expert reviews and user reviews. On one item, the Sandisk Sansa Clip, which is the mp3 player I use, they have 15 expert reviews and 290 user reviews. That's a lot of opinions! These days most smart shoppers on the web won't buy anything that hasn't been reviewed by a fair amount of experts and users. Why take the chance?

The next site is RepairPal and this is all about auto repair. What this site does is give you some powerful knowledge when it comes to making repairs on your car. You know how difficult it is to know if you're getting a good price on a repair to your car. Well, with this site you can feel much better in this regard. When you know you need something done, go to this site and enter in information about your car and what it needs along with your zip code and you'll get a range of prices for the repair along with a listing of shops in your area that can perform the job. Pretty helpful. I had hoped to see what various costs for a 30k tune-up on my '07 Sienna would be, but unfortunately tune-ups wasn't a repair listed. Hopefully they'll add these maintenance jobs in the future since they're needed by everyone.

Speaking of tune-ups, you are tuning up your car at regular intervals, right? It will just cost you more later if you're not. Until next time, spend smart.

The Hidden Inflation Sapping Our Purchasing Power

I often purchase Colombo sourdough sandwich rolls to make my daughter's favorite pizza bread. I was pleased to see them on sale at Safeway today. When I got home and started fixing dinner I wasn't as pleased. I noticed the rolls are significantly smaller than they used to be. Coincidentally the Wall Street Journal just reported today about food companies lowering the volume of food they sell while keeping the price the same. Get it?

This is inflation the government is not able to measure. It's insidious really. Kellogs has admitted to reducing some of their packages. General Mills admitted to reducing the size of the standard box of Cheerios while keeping the price the same. Nothing cheerful there.

I recommend you protect yourself by being wise to tactics like this. In the skies airlines are being very overt about charging extra for this and that. You're mad but at least you're seeing it and are able to shift your spending if you're not in agreement. It's when the company doesn't tell you what they're doing that your purchasing power is secretly weakened. You're paying more and don't even know it. Shop with both eyes wide open is all I can say today.

US Car Leases Going Away

I recently heard that one of the lifesaving moves being done by Ford, Chrysler and GM is to stop leasing cars. Why? Well, American cars don't hold their value very well, which means that the manufacturers can't resell the lease returns and make money. In fact they're losing tons of money on lease returns and it's gotta stop.The reason I'm talking about this is because every once in a while a retailer will actually do something that's good for the consumer and this is one of those cases. Leasing a car is a bad deal for anyone except in cases where the car is being leased for business purposes.

Many Americans lease cars they could never afford to buy. Unfortunately even if you lease a car you still have to pay tax, registration and insurance on it as if you bought it. Moreover you'll need to maintain it like it's yours, too. What a bad deal! I'm so glad the car companies are going to stop offering this bad deal to consumers. If only the foreign car companies would follow suit. They won't though since BMWs and Toyotas have great resale value. They have no reason to stop. If you are the leasing type, and it's not for business, then take a hint from GM who's awesome at losing money - stop leasing.