Sowing Wealth

Could Banks Be Nationalized?

I listen to the weekly public radio show called Marketplace Money through Audible.com on a semi-regular basis. On last week's show there was a story on the recent reversal of fortune with some of the banking giants. Both Citi and Bank of America were down over 50% since January 1, 2009. I actually didn't even know that BofA was down to the $5.00 level. What a shock to hear that.

BofA has since risen to $6.58 while Citi is now at $3.55. You might think that at these prices there's little downside risk and plenty of upside potential for the stocks. However, you might not be thinking that these banks could be nationalized. This is when a bank is taken over by the Federal Government for a period. After the bank is stabilized, then it's returned back to the private sector through a sale. The Marketplace Money story said this happened in Sweden once and it worked out well. Of course, Sweden's financial system is a little less complex than ours.

Anyway, if a bank is nationalized the depositors' money is still just as safe as it always was. They might experience changes in level of service as the government seeks to solve liquidity issues. The people that would totally lose out are the shareholders. They would lose everything in a takeover.

My point is that we don't think much about such a possibility, but anything could happen at this point and it's far from completely out of the question. Something to think about if you're thinking about picking up some Citi at $3.58.

No Cash? Barter for What You Want

It's such an ingrained mentality in most of us that we should pay cash for all our products and services. Adding to that we think that if we have stuff we don't want we should either sell it on Craig's List, in the paper, or give it away to a charity. Well, there's a whole other world populated with people who think differently. It's the world of bartering.

Lately I've started taking bartering more seriously since I own my own business. Since I own the service I provide, I have the right to sell it for cash or in trade for goods or services. I also saw a presentation by a business owner last week where he recounted bartering quite heavily in the early days of his business and that made me think about it even more.

Then I came to wonder if there's any sort of formal bartering platform around here. Well, of course there is in Silicon Valley. By doing a simple search I uncovered the SF Bay Area Barter site.

There's a big announcement on the home page about a clothing swap event going on in Oakland tomorrow. They say for under $15 bucks you can get a bunch of clothes, munchies and have a good time if you bring a bag of clothes with you. I didn't even know such events existed. Now I do.

Deeper on the page are individual listings for people who list out what they have to trade and what they want. I didn't see anything I want, but I did see people asking for services I could give. I can imagine on other days finding goods I'd like to have. 

Have Credit Card Companies Carry Your Debt at 0.0 While You Collect Interest

Even now there are credit card companies that are offering periods of 0.0% interest. Amex, Discover and Citi still are. Here's a way to make money off of such cards if you have at least $5,000 in cash. First, open up such an account. The Amex Blue Cash card will give you 12 months at 0.0 if you have great credit and a decent income. Then, start charging everything you would normally buy to the card. Instead of paying off the card each month as you normally would, put the money in to an online account that pays 3% interest such as with Capital One through Costco.

Let's say you will charge up about $10,000 to the Amex card throughout 2009. In that case you'll earn $300 by letting Amex carry the debt for you. Before your 12 months are up, you withdraw the 10k and pay the card off. Now this strategy takes discipline to be sure. If you have such discipline, as I do, then go for it and get some money from these big companies that are still offering these plans. Free money is nice.

To make it a little bit sweeter, get a bonus for opening the account, too. ING Direct offers a $25 bonus and Capital One offers one plus a better interest rate when you open it up by way of your Costco membership.

eFile Your Taxes for Free

Gee, I am writing on taxes fairly often these days, aren't I? They must be on my mind. Today I was reading an article in the USA Today Managing Your Money e-newsletter and came across an article entitled If you don't qualify for IRS' Free File, you can still file for free

It talks about how to file your tax returns for free this year. Your return generally needs to be simple to file for free and you must do so electronically. Federal and state governments really want to move the populace to file returns electronically since it can be so much faster and cheaper to process the returns this way. And the beautiful thing for taxpayers is that they get their refunds much faster, too.

Anyway, read the article to find links to sites that will show you if you qualify. If you live in California and want to efile a return for free this year, I found the page that has details on how you can qualify to do so. Here's the page

So, bottom line, before you decide to pay a pro or even buy software, be sure to find out if you can simply prepare and send in your return electronically all for free. Why spend money you don't have to?

Saving Money on Women's Clothing with Budget Fashionista

2009 is a year where there are going to be some screaming deals on clothing for the whole family. It's probably a good year to refresh your wardrobe for the next couple of years. I'm sure men can pick up suits for at least 50% off if you wait for the right sale. Joseph A Bank often has sales like this. There's one in downtown San Mateo. Off 5th down in Gilroy probably has great deals on suits, too.

For women, there's a blog that's pretty helpful along these lines: Budget Fashionista Good name and fun looking site.

Another strategy will be to pay attention to what stores are going out of business and go there during thier closing sales. I advise you not to go on the last day. There'll be nothing left then. I'm sure many people picked up clothes for 70% - 80% off at Mervyn's during December. The Budget site says JC Penney could be cutting back soon. The Gap is already cutting back and Banana's having constant sales.

The year's only going to get more painful so you might wait a few more months for even better prices. Now one thing I don't advise is to go in to debt to buy clothes. If you don't have the cash, then don't buy. It's that simple.

No Obama Pop to the Markets on Tuesday

Gee was I wrong last week in suggesting that we might see a surge upwards in the markets today. In fact  heard on the radio that we haven't had an up day in the markets since the inauguration of LBJ. It seems the downward weight of the struggling financials is more than the short-term bull market can bear at present.

Well, I was smart enough to not have bought any SPDRs on Friday in anticipation of the pop. Hey, I'm just writing the blog, not necessarily putting my money down on it. But seriously, change is gonna come and I still feel that after another painful trip down to the low 7,000s we'll see a stabilizing of the markets as Obama's economic team of advisers gets to work on formulating, then pushing out the next stimulus package as well as other adjustments to how the second half TARP funds are used.

I am quite in favor of investing real money in the low 7,000s for I think the risk-reward ratio will be in our favor at that point. Of course, I don't have a crystal ball and this blog is free so as they say all over town, "You get what you pay for." You should do your own research and consult a professional before taking action with real dinero. Good luck to you!

Californian Filers Expecting a Refund Should File Early

I heard on KGO the other day that California's Controller will be holding up tax refunds due to the giant budget issue. That is something, isn't it? We give them a little more tax than we need to all year long with no interest and then they have the nerve to consider delaying the return of our excess taxes with no interest because they can't balance a budget. This is outrageous.

My recommendation is to file early. I suspect that the later you file the longer you'll have to wait. That is unless they pass a new budget between now and the time you file, which is certainly possible considering we're essentially in a state of emergency. Or is it a state of recklessness?

California has a net outflow of residents and I'm not scratching my head why. There are numerous reasons why I'm staying put, but I sure do appreciate why more people are going than coming. OK, I'm digressing here. Anyway, I'll be filing my tax return asap in February.

Starbucks Gold Card a Winner

I now have a job that has me out and about meeting people  on a regular basis. One of the best places to meet people is at a Starbucks. They're everywhere and there's almost always parking nearby. Sometimes I'm in two Starbucks locations in one day.

Since I'm in them so often I decided that I may as well make the most of it and drop $25 for their new Gold card. With it you get 2 free hours of Wi-Fi each day and 10% off your food and drink purchases. Since I tote my laptop around with me and I often have a few hours to kill during the day in between appointments it made sense to secure a few hours of connectivity daily.

Now this is much less expensive than a celluar wireless card for my laptop. That service is always on, but it runs $50 or $60 a month. Since I have a BlackBerry on my hip already a wireless card seems like overkil wheras the 2 hours of Wi-Fi a day will be just right.

The 10% off is just a little fringe benefit. I've saved about 62 cents with it so far. But, I did get two free Mochas when I signed up for it, which are worth about $6. Chances are I'll end up saving as much on my purchases in a year as the card costs. That will make the Wi-Fi totally free. I like that.

And don't forget that if you are a Starbucks junkie - like I'm becoming - you'll buy the discounted cards from Costco and use those along with your Gold card. That's a win-win.

Start a Side Business in 2009

Does this idea sound crazy? Why would anyone want to start a side business in a recession? Well a couple of reasons actually. First one is that one should always have a Plan B. Putting all of your eggs in one employment basket is just not a good idea anymore. We're hearing of layoffs each and every day now. Today it's AMD, Varian and Circuit City either laying off people or totally shutting down.

What will all those laid off people do? Well, if they have a side business they'll be able to double their commitment to it immediately and keep some kind of income flowing. They can also state on their resume that they are currently working. That can help in an interview situation.

Another reason to start a side business is for tax purposes. It's very easy to be a Sole Proprietor and start a side business. All you need to do is get a business license, file a fictitious business name statement, advertise that, get a Tax ID Number and a couple of other pretty easy steps and you're in business.

Everything you spend on your new business is tax deductible. Yes, Uncle Sam will foot part of the bill to run your business. Why? Because he's hoping that you'll succeed and create jobs. The US tax code favors business owners, not employees. Listen to any of Robert Kiyosaki's Rich Dad stuff and he'll tell you that. The sooner you figure this out the better off you'll be unless you're on your way to being a corporate chieftain.

What business should you go in to? If you don't know, ask your family and friends. Take some surveys to see what your talents are. Think about your hobbies and how you could make money doing them. Talk to a career counselor. There's plenty of ways to find something to do as a business. Think, think, think. Then do.

Buying Fresh Food? Check the Date

How many times have you bought food, put it in your refrigerator for a few days only to find that it's already expired? Throwing away food that's spoiled is a real budget killer. I've vowed to stop doing it but haven't yet. One way to combat it is to get the freshest food you can when shopping.

I was at Target today to buy some bread. Their price is good and my girl likes it. At first I just grabbed a loaf off the shelf and started to walk away. Then, a little voice spoke in my head and said, "Do you know it's fresh?" I checked the date. January 21. I decided to check other loaves on the shelf. It turns out that there were three different dates on the shelf. I bought the bread dated January 24. Every day counts on fresh food. I've learned that.

What's worse than buying food that's near the expiration date? Buying food that's already expired. Don't bet on it that the supermarket is always vigilant on the dates. I've had to tell Trader Joe's more than once that they have food on the shelf past the date. They are also very liberal with their expiration dates. I've had fresh vegetables in the bag already go bad prior to the date on the sticker. Lesson here: Don't wait until the last day per the date on the package to eat the food. You might be sorry. Now you could legitimately return any food that spoils prior to its expiration date, but do you want to take the time to do this? I don't.

I've also started using a Sharpie to mark the first date I opened the container of ketchup, mayo, mustard, dressing, salsa, and spaghetti sauce since you will always forget if you don't. This doesn't really save me money per se, but it does give me more information on whether to use the product or replace it.