Feed: Wise Bread (Xin Lu) - AggScore: 67.5

By Xin Lu

Generation Y is generally defined as the group of people born between 1977 and 1995. In Y-Size Your Business: How Gen Y Employees Can Save You Money and Grow Your Business, "generation expert" Jason Ryan Dorsey writes about the generation gap in the modern workplace and how business leaders can motivate and best use their Gen-Y employees. As a member of Generation Y, I was interested in what Dorsey had to say about us in the workplace.

A couple years ago I actually wrote an article about Generation Y and the workplace from my own personal perspective. It did not surprise me that Dorsey's book had some of the exact same observations as I did. One big theme in the book is that Gen-Yers are not defined by their work, but their personal lives. The companies and managers that understand this and make a personal connection with Gen-Y employees will find that Gen-Yers can be highly productive and loyal. Dorsey has many examples of where companies reached out to the families of Gen-Y employees and got great results.

Along the same lines, the book makes a point that Gen-Yers do not necessarily put monetary rewards at the top of their lists and it does not take much for a company to make a Gen-Y employee happy. Sometimes a small gift on birthdays or just a simple verbal acknowledgment for good work is enough. For me personally a flexible working schedule is worth a lot more than money, and believe me when I work at home I often get more work done than when I am at the office because I value that trust.

Most of the book is devoted to educating business leaders what makes Gen-Y employees happy, but there is a good section about training and developing Gen-Y employees. For example, Gen-Y employees can be given a project to work on or enrolled in some sort of leadership development program. I think these suggestions make sense because most people I know love to take ownership of something at work. When a young person has his or her own project to work on it makes them feel more important than just being a drone. Dorsey had several examples of where Gen-Y employees did great things with their individual projects, and this is due to the fact that their companies trusted them enough with their time and talent.

Although I enjoyed reading the book and agree with many of its findings, one thing that truly annoyed me about this book was that the author decided to insert parentheses in to every other sentence. For example, here is a short excerpt:

My peers and I can be a little different when we enter the workplace (which is, on average, about 10 minutes later than you'd like). Sure, we show up to work with our iPod buds dangling out of our purse or backpack, and our ever-present cell phone is ringing loudly during the CEO's Monday morning pep talk.; Yes, many of us have a tattoo (or several); some of us sport nontraditional hair colors; and it's not uncommon for us to have a piercing somewhere besides our earlobes (and, no it doesn't hurt much).

Perhaps the author was trying to be cute and funny with all the little comments, but the parentheses were truly distracting to me as a reader. I have not read Dorsey's other books, but hopefully the rest are not so full of parentheses.

Disclosure: I received a free review copy of this book and the post contains an affiliate link to the book.

Permalink | 3 comments | Xin Lu's blog | Channel: Career Building

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This article is from Wise Bread.

By Xin Lu

Currently millions of Americans are delinquent on their home loans or facing foreclosure. Foreclosure, deed in lieu of foreclosure, and short sales are several ways for borrowers to get out of a mortgage that is no longer affordable. Here is a quick guide to what these options are, and how much they could affect one's credit score.

Foreclosure

A foreclosure happens when a borrower has defaulted on a property and the lender claims ownership of the property. Usually lenders start the foreclosure process after three missed payments. The property would then be sold at a public auction. The impact of the foreclosure to a borrower's FICO score is around 200 to 300 points if you include the effects of the missed payments. A foreclosure stays on your credit report for seven years.

Deed in Lieu

A deed in lieu of foreclosure is where the borrower gives the deed back to the lender with the lender's approval. The lender also forgives the remaining balance on the loan. The borrower still loses the home. It depends on how the lender reports this to your credit report but the credit drop could be as large as a real foreclosure and the record would stay for seven years. If your lender does accept a Deed in Lieu then you could try to negotiate with them to not put a foreclosure notification in your credit record, but if you had late payments your credit would still be affected.

Short Sale

This is not exactly a foreclosure, but a deal with the lender to sell a home for less than what is owed. Basically the borrower has to find a buyer who is willing to purchase the home at a price approved by the bank. The credit impact depends on how many late payments there are. If a short sale is completed without any late payments then the credit impact would be much less than that of a foreclosure. If the borrower accrues a significant amount of late payments during the short sale then the credit impact could still be as much as 200 points.

If you have to default on your mortgage, just remember that losing a home is not the end of the world and credit can be rebuilt. It generally takes two to three years for someone who went through one of the above events to qualify for another home loan. If a borrower keeps payments current on obligations other than the mortgage then the foreclosure would be an isolated negative event and that would not be indicative of a history of bad credit. This is why those who strategically walk away from their homes keep current on their credit cards and other loans because they can get back their "prime" credit score fairly quickly.

Have you gone through one of these events? How did it affect your credit score?

Permalink | 2 comments | Xin Lu's blog | Channel: Real Estate and Housing

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By Xin Lu

A couple months ago I wrote about the pros and cons of extending and expanding the popular first time homebuyer tax credit which was due to expire on November 30th, 2009. I wrote that there was a good chance that Congress would extend the credit regardless of the costs. Sure enough, this week Congress has approved an extension and expansion of the credit. Here are some details on the changes.

First of all, the $8000 tax credit will be available to first time homebuyers that enter into contract by April 30th, 2010, and close on the deal by June 30th, 2010. This is essentially a 6 months extension.

Next, the income limits for qualification have been increased from $75,000 to $125,000 for single filers, and $150,000 to $225,000 for joint filers. This increases the number of people eligible for the credit as well as the cost of the program by quite a bit since many people who could afford to buy homes now have high incomes.

Finally, there is an expansion of the credit for move up buyers. Basically, those who have owned their current homes for at least five years could buy a new home and get a $6500 credit. The new home purchased must cost $800,000 or under. The start date for this new credit will be November 6th, 2009, when President Obama signed it into law.

This credit extension was attached to a larger bill that is extending unemployment benefits by 14 weeks to 20 weeks, and it passed with very few dissenters. The new extension is projected to cost 10.8 billion in lost taxes, but if it works out like the Cash for Clunkers program or the first part of the tax credit then it will probably cost quite a bit more.

In my last post some commenters wrote that they would be very angry if late comers were given a better deal on the tax credit. Some people I know are also feeling gypped that they did not qualify for the tax credit this year due to the lower income limit. What do you think? Is the tax credit extension really necessary now? Would you take advantage of the new extension?

Permalink | 22 comments | Xin Lu's blog | Channel: Real Estate and Housing, Taxes

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This article is from Wise Bread.

By Xin Lu

In Becoming a Category of One, business consultant Joe Calloway writes about how companies can successfully beat their competition by creating their own category of business and being the only one in it. I feel that many business leaders would benefit by reading this book, and as a consumer I feel that the world would be a better place if all businesses applied the lessons in this book.

First of all, I felt that the book offered a lot of common sense advice that not all businesses seem to understand. Joe Calloway writes that Category of One businesses know their values and do their core jobs very well, and then they add a "wow factor." If companies chase after the "wow factor" and ignore their basic products then they will not necessarily be successful. One example he gave was that his wife ate at a restaurant that served a salad that was piled high like a tower, and the waiter said that was their "wow factor." Afterwards, his wife told him that salad was a stupid idea because there is no way to eat it without making a mess. I think a lot of businesses do spend too much time on gimmicks and forget the basics and Joe Calloway repeats over and over again that companies must do their core business well.

Another point in the book is that businesses cannot compete on just price and quality because modern consumers have high expectations and a lot of technology on their hands for comparison shopping. Calloway writes that Category of One companies should know more about, get closer to, and emotionally connect with their customers. Once a company accomplishes these three things it will have a competitive advantage. For example, he wrote about the product recommendation algorithms on Amazon.com and iTunes.com and how these personalized pages prompted him to buy more products. He also wrote about how he got a consulting job once simply because he knew more about the potential client's current situation. The idea is that businesses need to know what their customers want and build a real relationship with the customers. Some companies do this through data and send out bunches of form letters, but ultimately great personalized service wins.

Finally the book contains a case study on Tractor Supply Company, a chain store that serves the needs of farmers, ranchers, rural homeowners, and contractors. This chapter details the reasons why TSC is a Category of One company through customer letters and interviews with executives. This chapter is a little repetitive and ultimately the author concludes that Tractor Supply Company simply knows exactly what they are all about and executes on their mission of working hard, having fun, and making the customers happy.

Overall, I thought that the book is very easy to read and contained a lot of simple truths on how a business could stand out in the eyes of its customers. Although the ideas are simple, not every business cares enough to execute them. This book is great for anyone who runs his or her own business or even someone who is trying to find a job. It teaches you how you can differentiate yourself from your competitors and be in a Category of One.

Disclosure: I received a free review copy of this book and this post contains an Amazon Affiliates link to the book.

Permalink | 1 comment | Xin Lu's blog | Channel: Entrepreneurship

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This article is from Wise Bread.

By Xin Lu

A few months ago I wrote that I thought that "educational" DVDs for babies such as Baby Einstein were a waste of money because their educational benefits were quite dubious. It seems that a group of lawyers threatened a class action lawsuit last year against Disney for deceptive practices since the videos are heavily marketed as educational but research showed that television could actually be detrimental for very young children. Now Disney is offering a refund of up to $15.99 for each Baby Einstein DVD. Here are some details on how you can trade in your old Baby Einstein videos for some cash or a different product.

First you should print out an official mail-in certificate from the Baby Einstein DVD Upgrade / Money Back Guarantee website. Each household can return or exchange up to four DVDs that were purchased between June 5, 2004 and September 4, 2009. You do not need to send in any receipts, but you need to fill out a claim form for each DVD you are sending in. The offer allows you to trade your DVD for a different Baby Einstein product, a 25% off coupon code for Little Einstein products at DisneyStore.com, or $15.99 cash. If you return the maximum of four DVDs then you can get a check for $63.96.

All submissions must be postmarked by March 4, 2010 and mailed to:

The Baby Einstein DVD Guarantee/Upgrade Offer
P.O. Box 3200
Neenah, WI 54957-3200

If you just happen to have these DVDs lying around and no longer have a need for them then taking this offer would definitely yield more cash than selling the DVDs at a garage sale or online.

Photo Credit: Baby Einstein DVD image is from the Amazon.com Associates Program.

Permalink | 4 comments | Xin Lu's blog | Channel: Consumer Affairs

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By Xin Lu

Clothing swap parties have become popular in recent years as frugal and fashion conscious men and women find that trading clothes is a great way to update a wardrobe for next to nothing. For those of you who are not into attending or organizing these parties, it is possible to trade your gently used clothes from the comfort of your home. Here are five websites that help you achieve this.

Swapstyle

Swapstyle is a fairly old clothing swap site that has a large number of listings. It is open to those in the United States, Australia, and Europe. You have to post a picture of the item you want to swap and can also set a sale price for the item in case someone wants to just buy it. There is a fee to become address verified and there is a fairly rudimentary ratings system. Basically you can give a positive "token" for someone who sent something good and a negative point for someone who did not keep their promise.

Rehash

Rehash is a site where you can exchange clothes and also textbooks. It works like SwapStyle, but it is a little easier to use in my opinion. You can sign up for an account and put in a short description of your item with several pictures. Then you can specify if you would like to trade with everyone or locals only. You can also put up what you are looking for. When you bid on an item you can drag and drop the items you are willing to trade, and then if the bid is accepted you can negotiate with the other "Rehasher" how the swap should be conducted.

Dig N' Swap

Dig N' Swap is another simple site that works like Rehash or SwapStyle. It does not have as large of a selection as the other two sites, but it is free and pretty easy to use. All you have to do is search and bid on the items you want and negotiate a swap. The downside to this site is that it seems to be somewhat neglected so you may not find what you want.

thredUP

thredUP is a brand new site available to those in the United States that has a different approach to the clothing swap. You do not have to upload any pictures or deal with any descriptions. Instead, you simply fill in a few details about the items you want to trade such as brand and color. Then you can order thredUp envelopes and the website's algorithm will match the swaps for you. It is sort of like a clothing lottery, but you can set your clothing preferences in your profile and hope for the best. You can also review the items you received and receive points that you can redeem for more envelopes and other gifts. Right now the cost is $25.00 for 3 prepaid envelopes, but new users will get the first three envelopes for $12.50. I personally think that the price for the envelopes is a bit steep considering that the service is only focusing on shirts right now, but if the selection gets bigger and more valuable pieces of clothing may be swapped then it could be worthwhile. Also, it definitely takes time and patience to find the things you want on the sites that require a photo and description so this site might save you quite a bit of time. Right now the site is still in testing and you can sign up instantly through my invite link. thredUP is currently offering a free envelope for each person you invite.

Closet Infinite

Closet Infinite is a service that is only available in Singapore right now, but the concept is fairly interesting. Basically, people could donate the pieces of clothing they no longer want for a 6 months subscription to the Closet Infinite clothing rental service. The donated clothes or accessory is not returned, but the donor would have access to borrow all of Closet Infinite's inventory of donations. Supposedly the company is working on an international version, but I imagine it is not too hard for someone to set up a similar service in any country.

Generally it is good etiquette to trade items that are in good condition. If you do decide to trade items in person then it is probably safer to do it in a public place, and if you do mail items then you should check if the shipping costs are worthwhile. Sometimes it may be cheaper to just buy something at a thrift or consignment shop. If you do need to clear out your closet and get clothes that are "new to you", then clothing swapping is definitely a budget friendly way to refresh your wardrobe.

Have you ever swapped clothes on these sites or at a physical party? How was your experience?

Permalink | 14 comments | Xin Lu's blog | Channel: Frugal Living

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This article is from Wise Bread.

By Xin Lu

A few month ago, my husband received an unsolicited Visa Debit Card from NetSpend and I wrote about it here on Wise Bread. I admit that I did not know much about NetSpend at that time besides that they were sending out unsolicited cards. According to the comments many people received these unwelcomed cards, and some were even sent to to their pets, underaged kids, and ex-husband. What I found interesting was that several commenters defended prepaid debit cards like NetSpend and stated that it was cheaper than getting a bank account. In response to these comments, I decided to look into the fees and services of prepaid debit cards.

First of all, I looked at the NetSpend fee schedule. There seems to be two types of customers: Pay-As-You-Go and Fee Advantage customers. The Pay-As-You-Go customers have to pay $2.00 for each PIN purchase, and $1.00 for each signature purchase. The Fee Advantage customers have to pay $9.95 as a monthly service fee and both types of customers need to pay $9.95 to get a card. There is also a charge for loading money onto the card determined by the local distributors, and non-internet account balance inquiries cost 50 cents each. Each ATM withdrawal costs $2.50, and each ATM decline costs $1.00. Additionally, if there were no transactions within 90 days then there is an additional $5.95 per month account maintenance fee. Additionally, if you try to close your account you will be charged a fee of $5.95. Similar services like Green Dot also has a full menu of fees. In the case of Green Dot the company continues to assess a monthly charge even after the balance falls below $0.

So how does this compare to a bank account? It is true that there are no overdraft fees on these cards, but as long as you watch your balance carefully you can avoid overdrafts fees on a bank account. Many banks also offer free checking accounts with minimum balance requirements of under $100 with no account maintenance fees. The checking accounts usually come with a debit card that can be used at the bank's ATMs and many stores without a fee for every single swipe. Also, debit cards associated with checking and savings accounts have much better fraud protection than prepaid debit cards. Usually credit cards and debit cards associated with deposit accounts limit your liability in case of fraud and the money you deposit in any FDIC member bank would be insured. However, prepaid debit cards do not seem to have that protection so you may be on the hook for any fraudulent activity. Finally, I think it is ridiculous that many of these prepaid cards charge people for loading money onto the card. I have never had a bank account that charged me for depositing money.

I think the main issue with these prepaid cards right now is that they are much less regulated than bank accounts and credit cards. This lack of regulation allows them to send out unsolicited cards, and also nickel and dime those who are unable to get a regular bank account or credit card. The potential for fraud is also very high since anyone can get one of these cards very easily due to the way they are being distributed. I understand that these cards may be the only choice for those out there who cannot get a regular bank account or credit card, but it really seems that the industry is taking advantage of those who need every bit of their cash by assessing all of these fees. If you do have one of these prepaid cards that charges for every little thing you do, make sure that you avoid as many fees as you can by minimizing the number of transactions you make and also meet any deposit requirements. It is also possible to shop around for the company that has the least fees.

For further reading about a variety of prepaid card fees and problems the New York Times just published this a great article titled Prepaid, but Not Prepared for Debit Card Fees. Do you have one of these cards? How do you minimize the fees? Do you believe that they are better than bank accounts?

Permalink | 11 comments | Xin Lu's blog | Channel: Consumer Affairs, Credit Cards

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This article is from Wise Bread.

By Xin Lu

Lately several couples I know have been trying to purchase real estate, and it seems that none of them are too happy with their real estate agents. Some of them have been working with their agents for months without any positive outcome. The fact is that some of these poorly performing agents should have been fired long ago. Here are some signs that you should fire your real estate agent.

1. You know the agent is being unethical.

One person reported that his agent sent multiple buyers to the same houses, and subtlely encouraged the buyers to bid against each other. This agent is basically pitting his own clients against each other and that is not in the interest of any of the clients. If you suspect your agent of being unethical then it is probably best to cut off that relationship because these agents could bring you more trouble down the road.

2. The agent seems to have no basic knowledge of the local real estate market.

A good buyer's agent should know the general condition and trends of the real estate market he or she works in and provide some advice to buyers as to how much money to offer on a house. One person I know was extremely upset when she bid on a home that she later found out to be quite a bit more expensive than comparable homes. She blamed this on the agent for not offering any pricing advice when she asked how much should be offered. The offer was withdrawn, but the agent's lack of knowledge became pretty apparent.

3. The agent does not listen to you.

This is a pretty common complaint I hear about. Basically, the real estate agent shows homes to clients that do not meet the clients' requirements. The most common problem is that the agents show people homes outside the price ranges they have agreed upon. There are also requirements like school district or home size that the bad agents seem to ignore. Basically these agents seem to completely forget what the clients want. If this is happening to you then you should definitely confront your agent about it, and if he or she insists on showing you homes $200,000 above your budget then maybe it should be time to say goodbye.

4. The agent is difficult to get in touch with.

A good and eager agent is usually reachable by the client and replies to emails and phone calls even if they are busy. If you cannot find your agent for days on end, then maybe he or she does not really want to work with you and it is time to move on.

5. The agent displays general incompetence.

In several instances I have heard people complain about how many mistakes their agents made. For example, an agent could not spell one particular client's name correctly in emails, and then the same mistake was carried onto offers. If you see constant incompetence on the part of the agent then it is probably in your interest to hire someone new. A real estate transaction is a big deal for most people, and you cannot afford to have someone who makes mistakes as a habit.

In general, you should probably part ways with your real estate agent if it feels like you are both wasting your time. It does not do you or the agent any good if you are all running around for months without achieving your goal of closing on a home. When you are ready to fire the agent, you should check if you signed any representation contracts and if you have any financial or legal obligations to keep him or her. Usually there is some kind of Buyer's Broker Agreement with some set terms. It is possible that you have to let such agreements expire before looking for a new agent. A good real estate agent should save you time and money and make your home buying process go as smoothly as possible, but a bad agent will cause additional stress and anxiety. Of course, to avoid some of these problems you should screen your realtor carefully before hiring him or her and read any agreements you sign.

Have you had to fire a real estate agent?  What was your reasoning?

Permalink | 19 comments | Xin Lu's blog | Channel: Real Estate and Housing

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This article is from Wise Bread.

By Xin Lu

A new show named Bank of Mom and Dad just premiered on 9/30/09 on SOAPnet. This show chronicles parents who attempt to reform their financially irresponsible adult children by moving in with them for a week. With the aid of a "money coach," the parents take actions to reform their spendthrift kid. Can this financial intervention really work?

I watched the premiere episode on Hulu.com and I must admit that it was a pretty entertaining show. The indebted child is a 33 year old single woman named Christina who looks a bit like Jillian from The Biggest Loser. She makes about $2500 a month as a bartender and spends around $3500 per month and she has accumulated over $38,000 in debt. Her parents have been divorced for 10 years, but they joined forces to participate in their daughter's financial makeover. They were also given advice by a straight talking personal finance coach who cut to the core of Christina's financial problems. The coach was not the main focus of the show and she had three very short meetings with the family and created a budget for Christina to focus on paying for necessities first.

What I really liked is that Christina's parents tried to teach her that she could enjoy the things she loves without spending as much as she does. For example, her mom Lorraine challenged her to spend less on groceries. Both women had the same shopping list and went to the same grocery store. The mom spent $57 for the items in her cart while Christina spent $193. Christina argued that the things she bought would taste better so her mom set up a blind taste test. Out of six food items, Christina preferred four of her mom's more frugal choices. It was quite hilarious when Lorraine cheered jubilantly when her daughter could not tell the difference between tap water and the expensive bottled water from Italy. I think this is actually a good experiment for those who spend too much on gourmet food. Could you tell the difference between $17 and $7 olive oils?

Christina's dad also showed a bit of tough love when he called the city to impound Christina's car since she owes over $1300 in parking tickets. The dad offered to get the car out of impound, but he also made Christina write him a $500 check upfront, and sign a contract that states that she would pay him back in full in a year. Personally I think this is what every parent should do when they loan money to their adult children.

In the end, it is hard to tell if Christina would keep up her new budget since the parental intervention only lasted one week, but in a blog update she states that the show has waken her up to her messy financial situation. Her parents did admit that they never taught her much about finances when she was young, but the idea of the show is that it is never too late to learn about personal finance and saving for yourself. I think one weakness of the first episode is that the money coach never talked to Christina about how she could increase her income, but the basic money saving and budgeting tips presented were on the spot. I will definitely tune in for the next episode, and you can also watch along for free on Hulu.com.

Permalink | 12 comments | Xin Lu's blog | Channel: Frugal Living

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This article is from Wise Bread.

By Xin Lu

When it comes to investments, the most popular asset classes are stocks, bonds, and real estate. However, in the recent economic turmoil many people are looking for alternative investments to maintain the value of their assets. Here are three long term "investments" that you could enjoy while you wait for price appreciation.

Art

In general, the world of art collecting is volatile and people's tastes change over time so it is hard to nail down what would appreciate. Also, most of us do not have thousands to millions of dollars to spend on art. So the best way to collect art is really to just buy the pieces you enjoy and could afford. There is no point in buying an abstract painting you do not care for just because it is by some famous dead artist. There are tons of galleries showcasing contemporary artists who sell their pieces at very reasonable prices. If you are looking for appreciation then it makes much more sense to buy the art before an artist becomes too famous.

Another way to invest in art is to find out what the tastes of the collectors are. For example, A particularly "hot" area of art is Asian art right now since the wealth of China and India ballooned in the recent years. Even in the economic downturn, top auction houses are getting bids over their estimates for Asian art. After all, the monetary value of art is fairly subjective, so if you really want to collect art as an investment then you need to follow the money. Otherwise it is best to just buy the pieces that make you happy.

Fossils

When I was a kid I collected fossils and minerals. My favorite piece was a small fossil fish that my mom bought for me for around $6. Apparently a similar speciment is worth 6 or 7 times more now because fossil collecting is gaining popularity all around the world. The price appreciation on that particular fossil has been more than twice of inflation. There are professional fossil hunters that search for rare speciments in exotic places like the Arctic and museum quality pieces could be worth millions. Fossils are fairly low maintenance compared to art and they are becoming more rare as more collection sites are becoming protected. Each fossil is also guaranteed to be unique, so that makes the collecting more fun.

Books

I learned quite a bit about collectible books when I was selling used books. With the rise of digital media, I think real books will become more scarce and collectible as time passes. Although digital books are convenient, I find it more pleasurable to read and touch a tangible book. It is possible to collect quality books on a small budget. One famous example is that of Michael Hurley a postal worker who never made more than $25,000 a year that amassed a collection worth over $300,000 in 1984. Currently you are still able to find many first edition 20th to 21th century books at very affordable prices. Some of these can even be found at garage sales if you look hard enough. One book I recommend for beginner book collectors is definitely Book Finds: How to Find, Buy, and Sell Used and Rare Books by Ian C. Ellis (affiliate link).

Each of these "investments" require a lot of study and research just like any stock or piece of real estate if your intent is to make any money. Just like the more mainstream investments, there are scams and duds so you should start small. Although collecting these things seem frivolous, it is actually possible to make a profession out of any of these if you learn enough and love the field enough. What do you think? What is your alternative investment?

Permalink | 8 comments | Xin Lu's blog | Channel: Art and Leisure, Investment

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This article is from Wise Bread.