Something I Learned Today

I am sure all of us are familiar with the concept of balance transfers. However, what if you are a person who is extremely diligent in seeing to it that there are not balances on your credit card ? How can this apply to you ?

I came across a credit card related post today - 3 Steps to Take When Credit Card Companies Raise Your Rates. It got me thinking about something. I am currently in a situation where I am repaying a high interest rate loan and am looking at options to refinance it. There are many more variables to the equation and a simple yes or no might not necessarily be the answer. But in my quest to find alternate ways to repay the loan, I have been talking to various banks and trying to see what they have to offer. I have also been looking at new credit cards with 0% APR. Something that I did not look into till now was my own credit card.

I do not keep any balance on my credit card and treat it pretty much like a debit card, paying it off as soon as I use it. I am sure they look at me as a valued customer. I could use this to my advantage. I called up my company and mentioned that I was considering taking a loan. As soon as I mentioned this, they got extremely excited. They told me that the rates vary on a day to day basis but today I qualify for a 1% loan for six months and 4% loan for 12 months for an amount equal to my credit limit.

I said I would call them later. I am sure that if I had continued talking and expressed my concern in borrowing the money, they would have further reduced the interest rate.

I personally still need to decide if this is the best option for me. However, the point I wanted to make was that before you consider transferring the balances on your existing credit card onto another card with a lower rate or before taking a loan, talk to your existing credit card company and see what they have to offer. You might end up with nothing or you might strike gold. But what do you have to lose other than 10 minutes talk time.

Politeness Saves the Day ($12)

Wednesday - February 6th 2008

Not a particularly pleasant day at work. I return home in a bit of a grumpy mood. I do the habitual round to the mailbox to pick up my mail and raised an eyebrow at the letter I received from the local library. What was it? I was informed that a book I had borrowed a couple of weeks back - "Blogging for Dummies by Brad Hill" had been damaged and I owed a fine of $24. $24 !!!

My first reaction was that of infuriation. The book already had water-damage on it when I borrowed it. And now I felt I was being penalized for someone else's fault. Besides, it was selling on the internet for $10 (including shipping). Why did they want $24 ?

I immediately drove to the library. I picked up another book and went to the circulation desk. There a kind lady and a not so kind gentleman first informed me that I had a fine and then refused to let me see the damaged book. What's more, they did not even let me check out the book I wanted to borrow. Did I mention that I was fuming through all this ? I was not rude, but I sure as hell was not at my polite best. I took down the number of the library supervisor and then decided to bring up the matter with her the next day.

On my way back home I decided to go over the day's happenings in my head. Some self reflection revealed that I could definitely have handled the situation in a much more calm and informed fashion. Also, I thought about the book. Its not the best book in the world, but it certainly does hold some good tips for amateur bloggers.

Mrs.Micah works at a library and told me that bringing up the case with the supervisor could help me either reduce the fine or get rid of it altogether. Either that or I could just replace the book.

But I saw that all this would need one important ingredient from me - politeness.


Thursday - February 7th 2008

I call the supervisor around 10a.m. I try not to sound defensive and be as polite as possible. I explain my case. I guess she was initially prepared for a stormy conversation. But my calm demeanor took her by surprise. She was a nice lady and saw my point of view. I offered to replace the copy of the book and asked if I could still borrow books while I get the other copy. She agreed to this and to the fact that I could have the damaged copy for myself. She mentioned that there is no clause that states I cannot borrow books with a fine on my account. On learning that I was denied this service last evening, she apologized profusely and said this would not happen again.

I return home and buy the book for $10 on Amazon. I will have to pay $2 processing fees. But in my mind, it was a fair enough deal.

Did I want to buy a damaged copy of the book for myself ? No.
Could I have been more aggressive and gotten them to pardon the entire fine? Possibly.
But the way I see it, I saved $12 off the original $24 fine. Plus, I have a copy of the book.

Lesson learnt - Stuff happens in life sometimes and the outcome may not always be one in your favour. But the important point is to handle it with a calm head. Rudeness and anger can only make it worse.

Debt Trauma & Money Secrets

All right, not exactly trauma. But slight frustration at least.

Since New Year's, I've been diligently curbing my expenditures. I have totally cut down on entertainment expenses. And I have been dealing with it quite well.

Yet, sometimes, like today, I read articles like this and revisit my finances. They are in good shape. But the road ahead is long. And the fact that you have the resources to splurge in the short term but are purposefully curbing your expenses, though rewarding most of the times, sometimes really gets to you. Its at times like this when one really needs to be careful not to give in and run out of the door to the mall across one's house and buy that new Xbox 360 that everyone at work has been raving about and a few months later sell it at a loss (yeah, I am still trying to get over it :) ). And I am glad that this time, I did not give in. Its amazing how family and friends can take your mind off your worries for a while.

Anyways, now that that (notice that 'that that') episode is over, lets take a look at some of the finer things in life. One of which (and probably the most important) is humor.

In an era when there is a new self-help financial book out every week, why should Dave Barry be left behind? He comes out with this spoof on self help financial books called Dave Barry's Money Secrets - Like why is there a giant eyeball on the dollar.

I have always admired Barry's humor from the days of Dave' World. However, the first time I actually picked up one of his books was a few months back at the library. I had nothing better to do on a saturday afternoon and decided I should pay the library a visit. This book looked interesting, but 5 minutes into it, and I was laughing so loudly, I was given the usual polite "frown" one gets for being overtly expressive of one's emotions at the local public library.

I just wanted to introduce you to it. For a detailed review, look here. On the whole, its a good book to pick up when you are feeling down. It sincerely introduces you to the lighter side of money, revealing the truths about how you actually can become rich doing nothing. Of course, following his advice can have interesting consequences... did I mention this was a spoof ?

I would buy it, but it definitely is worth a read. But not in a library. Seriously. The middle-aged librarian's cold eyes looking at me through those horn-rimmed glasses still haunt me.

Have fun reading it and let me know if you liked it.

It's the Stock Market ... RUN (but do not hide)

Partly due to the exorbitant volume of information that needs to be digested and partly due to fear of losses, most of us tend to shy away from the stock market. I am, of course, referring to those of us who do not work in the financial field.

As soon as I got my job, and after the initial fascination with the elevated income wore off and the realization that student loans were pending kicked in, I started thinking of saving and investing.

Retirement plans apart, I wanted to actively start investing in the stock market. However, most of us are well aware of the horrors of the stock market. With sudden crashes and fortunes lost, quite often accompanied by loss of lives, it somehow seemed more of a gamble than a strategy for growing my money.

The alternatives - mutual funds. Depending on the type of mutual fund, you are indirectly investing in the stock market. Only, you are now relying on, and paying, a group of individuals to take investment decisions for you. This is a perfectly acceptable plan, as quite often, the group of individuals actually knows what it is doing. Sure, you pay a small premium but, if they play it smartly, you can make a lot of money in the process.

Personally, I am interested in finance and the functioning and the dynamics of the stock market has always aroused my curiosity. Watching financial news and following stocks started attracting my interest on a more regular basis. However, then, and even now, I am not financially stable enough to begin playing the stock market. And more importantly, I am not armed with enough information.

I started visiting the Google Finance and Yahoo Finance pages regularly. This is one of the few places where Google actually performs worse than Yahoo. The Yahoo page is so much more informative. It gives you all the information you could need about a stock, and more. Google on the other hands seems to be in its infancy with its financial page. Its interface and usability, however, keep you on it for a while. Given some time to develop their content, I am sure their page will become much more popular than Yahoo.

Another interesting website I found was Stocksquest. It is an interesting and engaging concept where you are given a certain amount of capital to begin with. You can then invest it in stocks you pick and basically build up a mock portfolio which you can monitor over time. It also has a very basic tutorial, the kind someone like me with no background in finance needs. And what's more, its free. I just started on it a while back. Lets see how far I go with it.

I am sure there are tons of other such sites out there. If any of you have ever gotten interested in the stock market. and tried similar ways of playing it safe and learning the game before actually investing your money in it, I am all ears, or in this case, eyes.

I hope to continue this practice and will keep you informed of how it goes. Hopefully, as and when I do find myself in a comfortable financial position to invest directly in the stock market, I would have gained some ideas on how to predict trends in the market. If not, mutual funds and bonds will always be around.


Image credits to [ azrainman ]

Of impulse buys and small furry creatures - Part 2

Firstly, apologies for being so irregular with my postings.

If you haven't already, please do read the first part of this blog here.

I appreciate your curiosity in coming back for the concluding part of this blog. Today, I answer the most important question you might have had from the previous blog. What has this blog got to do with small furry creatures ? Be patient, and thou shalt be rewarded.

Let's start off with a DAQ.

DAQ: I may not have gone where I intended to go, but I think I ended up where I needed to be.

So back to impulse buys. Here I was, fresh out of college, just started earning some money at my new job. I managed to convince myself that although I barely had the energy to stay awake after I got home, I needed a way to spend my time more fruitfully than watching television. Here is a simple equation:

Money + foolishness = impulse buy

This is exactly what happened. And I became the owner of a sparkling new Xbox 360. Brand new. Not even a used unit. Absolutely new. And I also had the shopkeeper throw in $100 worth of games to play along with it. Why ? Because I could. But should I have ? In retrospect, no. The reason being that as much as I liked the new system and was super excited about it for the first 2 weeks, I first grew tired of the games. And 3 months later, suddenly realized that I was using it just as a glorified DVD player. Thats about the time I started becoming financially aware. One fine day, I came across a blog here. This, and the pain of seeing a perfectly good system sitting there in my apartment, not serving its purpose, made me take the radical step of getting up off my butt and trying to sell it. I am glad to announce that although I sold it for a loss, I have received more than an average ebay user would have paid for it.

DAQ: There is a theory which states that if anybody discovers what exactly the Universe is for and why it is here, it will be replaced by something more bizzare and inexplicable. There is another theory which states that this has already happened.

So what does it post have to do with small furry creatures ? Nothing actually. These quotes are from Douglas Adams' well known humorous science fiction series The Hitchhiker's Guide to the Galaxy. This is a form of comedy not many people might be acquainted and, since I liked it so much, thought I should share it with you.

One final thought on impulse buys. Not all impulse buys spell doom and almost all of them are easy to get out of. So if you are just reading this post and feel "Oh man, I wish I had not bought that Cappuccino-maker-cum-facial-massage-giver for my car", think again. Almost everything can be sold on ebay. But the other point I wanted to make was that before you sell of the item, see if it truly is not of any use to you. Sometimes impulse buys can be one of your most used items. For example, my Ipod nano which I purchased at a time when nothing was going my way, I hardly had a few dollars in my bank and I was of the opinion that this was the only way I could put a smile on my face. This was over 2 years back and I still have it as my trustworthy companion.


Thanks for lending me your eyes and mind for a short while. I enjoyed the company and leave you with a parting DAQ.

DAQ: In those days spirits were brave, the stakes were high, men were real men, women were real women and small furry creatures from Alpha Centauri were real small furry creatures from Alpha Centauri.

Of impulse buys and small furry creatures - Part 1

Warning: This post is rife with quotes by Douglas Adams (henceforth denoted as DAQ) which, although irrelevant in certain places, and nonsensical in most, provide a humorous diversion.

Just like every other year, I made a list of new year resolutions this year. And just like every other year, I promised myself I would abide by them. And just like every other year, I was almost lazy enough to conveniently blot out the list-making incident from my memory by the end of the first month. Alas, I could not. The reason was simple. One of my resolutions was to stop being lazy enough to conveniently blot out the list-making incident from my memory by the end of the first month of the year. However, I did not include any statements about the second month. So there is still hope.

One of my resolutions was to start looking at my personal finances once in a while, as opposed to trying to understand them after being surprised by the bills, unpleasantly of course, at the end of the month. Included in this resolution was to cut down on impulse buys and to try and get rid of my current mistakes. Following are the action items on my plate:

• Keep regular tabs on my bank accounts
• Cut down on impulse buys & needless spending
• Read more from people with similar ideas (personal finance blogs)
• Get rid of items which are useless to me but could be of use to others
• Keep track of my spending trends
  

DAQ: It is a mistake to think you can solve any major problem just with potatoes.

Has it been helpful at all ? Yes, yes and yes. And yes again, although there was just one question there. An important aspect of this has been the containment of impulse buys or the far more dangerous entities - impulse buy urges.

So what are impulse buys you might ask. I personally define it as your loss of self-control when you see something attractive and purchase it to satisfy yourself. I know what you perverts are thinking of, but I mostly meant material possessions like mp3 players, new shoes, LCD TVs, pacemakers, etc. The urge to habitually eat out could also be counted as an impulse buy. Many businesses thrive on these urges of yours in order to even exist. And they take special care to see that these urges are not suppressed through the magic of marketing.

Digest that. In the mean time, here's a DAQ.

DAQ: He attacked everything in life with a mix of extraordinary genius and naive incompetence, and it was often difficult to tell which was which.

As invincible as I may sound, I too was lured into many impulse buys and expenditures. Of course it was not my fault. It was the damn advertisements. But it was my money. From my wallet. And I ultimately did deal with it. Hopefully permanently.

Stay tuned for the next part tomorrow.

Exploration

Often times in life, we are lost and don't know which path will lead us to our destination, or in some cases, our destiny. Sometimes, it so transpires that we suddenly wake up from our slumber of ignorance and find ourselves craving for a goal to run towards, an objective to accomplish and a purpose to fulfill. I find myself in such a predicament at the infancy of my blogging efforts. I have two paths to choose from. One would be strict adherence to a topic of public interest. Another would not be as rewarding in the traditional sense, but would let me wander and explore my creative urges rather than channeling them towards a particular subject.

Which do I choose ? I choose to live life by the hour. I have certain ideas, certain interests, certain long term ambitions. I wish to treat this as a picture which will gradually fall into place.

Was that me up there or did an 80 year old Freudian enthusiast's spirit just posses me for an instant ? I'm glad its over though, aren't you?

So, I am interested in books, music, management, personal finance, cooking (Indian) and many more topics. I shall make an earnest effort to try and find my comfort zone. But in the process you might have to tolerate blogs on a variety of different topics. The ride will not be smooth, but I assure you it will be fun.

Gear up !

Why I chose to sign up for a gas credit card

I run the risk of appearing to be an advertisement for gas credit cards. But this is a risk I am prepared to take if only to share some valuable thoughts with you.

I just signed up for a gas credit card. Today I run you through the process, of how and why I chose to sign up for one. This, in my opinion, is a more important question as compared to which gas credit card to sign up for. The reason I say this is because, with the number of credit cards people tend to have nowadays, it really does take some serious thought to decide whether you need another one or not. This article is basically intended to be a sanity check before you go and sign up for one.


What got me thinking: I absolutely love my car and do a LOT of driving. I just graduated. While in school I did not have the luxury of owning a car and hence, when I finally did get my little beauty, I felt free as a bird. To cut a long story short, I was returning home last weekend from a road trip and happened to stop over at a Shell gas station to fuel up. While I was waiting there, my eyes fell on the advertisement for a Shell Gas Card which announced a 5% rebate on all fuel purchases from Shell. With the amount of money the average car owner in America spends on gas, 5% seemed to me like a significant amount. It was then that I started entertaining thoughts of having a gas card.

The initial hesitation: All of us have heard horror stories of people having tons of credit cards and buried neck deep in credit card debt. Thus, when one thinks of getting another credit card, however attractive the accompanying offer may be, one is always wary of the possible consequences. This is a very realistic possibility. When we see the attractive offers that usually come along with credit cards, we might think that the credit card companies lose money. But with the ridiculously high interest rates, they more than make up for it if you happen to have even a small balance on your card at the end of the month. That's the reason I make it a point to see that I do not carry any balance on my credit card.


Does it make financial sense? This is a question that poses a conundrum of sorts. In my experience, the answer is never a clear yes or no but is more of an exercise in weighing out the pros and cons. In my case, I evaluated the following to be my pros and cons for this argument.

Pros:

• It will put 5% (or the advertised percentage) of all my gas expenses back in my pocket.
• It will help me keep a track of how much gas I am consuming.
• Since most of these cards have an upper limit, it might help control my gas consumption.
• Since I am pretty efficient with my personal finances and I have just one credit card to date, I stand a very good chance of benefiting from the deal.
• It shouldn't hurt my credit history.
  

Cons:

• It is, after all, another credit card on which my balances need to be tracked and paid off.
• There might be hidden costs/fees once the introductory period expires.
• I forget to make one payment and the result is an avalanche effect potentially snowballing into huge debt.

In conclusion, to me, it does make financial sense. I do consider myself conscious enough to be aware of the fact that another credit card needs to be paid off regularly. And hence, I went ahead and signed up for it.

But to many, it might not. Having multiple credit cards is not only a hassle as far as self management is concerned, but also a bonus for the credit card companies which thrive on you not repaying your debt in time. If that is the case, does it really make sense to get a measly 5c back on the dollar with such a high price waiting to be paid? I do not think so.

Actually choosing a card: Now comes the process for which there is ample guidance available on the internet in the form of websites, blogs, news articles and what not. The internet is indeed an excellent resource for credit card selection as there are tons of reviews on the available credit cards which help you decide whether a particular card is tailored to cater to your specific spending habits or not. Some amount of research and talking to co-workers and friends helped me zero in on a Discover Open Road Card for my needs.

I hope this article, though verbose, was slightly helpful. If you invest the right amount of time and effort into your search, I am sure, as with other areas of your life, you will find your perfect match.

Creative overflow

Reflective Soliloquy.

One might assume that this is going to be a series of self-reflective and spiritually motivating blog posts. One might end up assuming way too much.

There are tons of bloggers out there with opinions galore on topics ranging from politics to theology. What is so special about this one ? Does he have something significant to contribute to the "Blogosphere" that was hitherto absent ? or is he just another smart ass with nothing better to do ?

Wow, you ask a lot of questions! Did you know that it is considered a tad bit impolite to continue talking to a person without letting him get in a word or two ?

Ha Ha HA you might say. It was a "below the poverty line" PJ, as someone I am close to would say.

Time for some honesty.

I am a twenty-something just starting out in life. I have all this creativity bubbling inside me and keep looking for new arenas to satisfy my creative urges. Blogging is not new to me. I have tried my hand at it once and then got caught up in the rat race of grad school. But this time, I have decided not to repeat the same mistake. And hence, I am going to try my hand at horse racing now.

Seriously, get serious.

So, thats the reason I have got back to blogging. I have all these ideas and read about so many new things everyday. I might not have the time to comment on each and every issue I come across everyday, but maybe this time I will be at it long enough to look back after a year and say to myself that that was definitely worth it.

So down to business.

Of late I have been reading a lot about managing personal finances. Its interesting to say the least. Mind you, this can sometimes be an extremely dry lunch conversation topic. But something about it ignites a spark inside me. For me, its not about saving a truck load of money because I need to repay loans. Sure I do. But for me its more than that. Its like that game of Sim City I used to play as a kid where I would manage my finances. This is like that. Its more of a game to me. I love money. I crave financial independence. A book I read by Robert Kiyosaki called Rich Dad Poor Dad has really inspired. I would not go as far as to say that I agree with each and every aspect of it.

Sorry for the abrupt end. More tomorrow. Either about this or something else. I promise.