Aug 16 2010

Opting Out of Citi Dividend World Mastercard Upgrade

Two months ago, I received a letter from Citi saying that they were going to “upgrade’ my Citi Dividend Platinum Select card to a Citi Dividend World Mastercard.

My primary concern was that the new card would have no pre-set spending limit – meaning it would have a negative effect on my credit score.

Now, I admit I slipped up when I accidentally tossed out the notification letter. I was supposed to call up Citi to let them know that I refused to receive this unrewarding upgrade. Anyway, they’ve sent out another letter alerting cardholders that the new card would arrive within 14 days. Without hesitation, I was on the phone with a Citi customer representative.

The Buzz Around the Changes
From a little research around the web, many Citi cardholders were finding out that their cards are on the list of those being upgraded. Many have been unsuccessful in opting out of this upgrade. Many have had to get a little rowdy (with persistence) to opt out. And, many have had no problems getting just what they wanted. They believe that it all depends on your luck in connecting to the right customer representative.

But, one thing is for sure:

You can opt out – no matter what they say.

If you didn’t receive prior notice of the upgrade and received the new card in the mail, you can ask them to reinstate your old card along with the old terms and conditions. Several card users were put in this position and were able to get their old cards back (even after activation of the new card).

My Opt-Out Call
For those who are in the same situation I was, I hope this will help you when you make your call:

  1. I dialed 1(866)775-0556 and asked for customer representative (had to fight the automated answering system a little).
  2. First, I had to verify my identity with the answer to a security question.
  3. When asked “How can I help you today?”, my answer was “I received a letter in the mail saying that my card was be upgraded. I’d like to opt out of this upgrade because I like my card as it is.”
  4. The customer rep. tells me they’ll process my request. It took around 30 seconds.
  5. After I asked for proof of confirmation, the rep. offered her employee ID.
  6. Of course, I declined the usual “special offer” pitch for a balance transfer at low rate.
  7. Finally, I thanked her and went on my way.

The entire call took only 5 minutes.

I expected at least some resistance but it was nice to not have to escalate my voice past my typically amiable tone. One point for Citi on this one!

(Photo credit: hoyasmeg)

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Aug 13 2010

How Long Should I Keep My Tax Returns?

As I go through my occasional routine to file my important mail and documents, I realized that the most space-consuming files were my tax documents.

Since I am relatively new to the real world, I only have four years of tax returns. I was still in college so my tax situations weren’t too complicated – easy enough for me to file on my own with TurboTax. Still, I can’t wait to dispose of them to rid myself of clutter.

Advice From the IRS
Common sense tells me that I should hold on to my tax returns as long as possible – ideally, forever. Sure, the IRS has a “period of limitations” that would allow me to purge what I consider to be paper waste but the advancement of technology makes storage of financial paperwork such a breeze.

The period of limitations is basically the time frame in which filers can makes changed on tax returns to claim a credit or refund, or that the IRS can come knocking for additional tax.

Just because the IRS says they won’t hunt me down after I have cleared the period of limitations, it doesn’t mean you won’t need them for non-tax purposes. Thanks to a solid backup system, I can have multiple digital copies of my tax documents within minutes. I don’t believe someone can have too many records. Plus, digital scans reduces the clutter.

According to the IRS, apply the following rules for your records:

  • If you filed a fraudulent return, keep your records forever.
  • If you did not file a return, keep your records forever.
  • If you do not disclose income that should have been reported and it comprises more than 25% of the gross income on your tax return, keep records for 6 years.
  • If the above three situation do not apply to you and you own addition tax, keep records for 3 years.
  • If you file a claim for a credit or refund after you fill your return, keep records for 3 years from the date you filed your original return or 2 years from the date you paid the tax (whichever is later).
  • If you file a claim for a loss from worthless securities or bad debt deduction, keep records for 7 years.
  • All employment tax records should be kept for at least 4 years after the date that the tax becomes due or is paid (whichever is later).

Important Note: Be aware that a tax return is created by the information provided in tax documents (e.g. W-2, 1099s, paycheck stubs, receipts, statements, and etc.). An audit by the IRS would require verification of these tax documents that rendered a suspicious tax return. Therefore, it seems logical that tax documents are more important than tax returns.

The Fate of My Tax Paperwork
The IRS suggestions seem somewhat tedious and mind-numbing. So, my simple solution is to:

  1. Keep tax returns and tax documents for 7 years.
  2. Make digital copies of all tax returns and documents and (try to) keep them forever.
  3. Destroy original paper tax returns and tax documents after 7 years.

Honestly, with the help of a scanner, there’s no reason we can’t keep copies of any paperwork in a combination of flash drives and external drives.

(Photo credit: GenBug)

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Aug 11 2010

5 Wrong Ways to Invest in Stocks

The stock market is a mystery to many and treacherous waters to even more. At one point, everyone had their own misconceptions on the mechanics of investing world.

There is no doubt that investing is an emotional roller-coaster ride. The passengers who can tolerate the ups and downs would be less likely to make a bad investment decision.

When I first started, I made many of these same mistakes with real money. The rookie investor in me didn’t realize that I made these exact mistakes when I was fooling around with virtual stock portfolios. I’ve become much wiser since.

I hope the many rookie investors out there don’t repeat them:

  • Investing in the popular brands. So, you saw an appealing Abercrombie ad on the side of a building and you see all the teens wearing their clothes. That does’t make Abercrombie a good investment. Frequent exposure to a brand only reveals a successful marketing campaign but says very little about the company’s performance.
  • Buying high dividends. Compared to a high-yield savings account, a company’s dividends might look like a golden. Dividends are typically cash that a company doesn’t need and is returning to shareholders. This could signal lagging growth that deserves some research before a stock with a dividend yield of 9+% goes bankrupt the next year. Recently, BP was speculated to be on this path.
  • Buying in on dips. If a stock (or the stock market) takes a dive, many investors are learning to buy instead of sell. Sure, this is a way of getting discount stocks through dollar-cost averaging – but buy only after you’ve done the necessary research so that you aren’t buying poor value.
  • Putting money on that stock tip. Stock advice always seems convincing to an amateur investor. It’s normally those who start investing with very little funds and end up losing most of it within the first few trades. When it comes to investing, tread along with this golden rule in mind – there are no guarantees in the stock market.
  • Playing according to the news and media. Whether you are a fan of CNBC or Bloomberg, it is common to have the news and media sway your investment decisions. Any of the so-called experts and analysts are voicing their opinions and beliefs. What they say have no effect on the company in question. Also, any news, whether positive or negative, shouldn’t be indicative of the future. Most news on TV represents short-term influences on investment analysis. Research the news much like how you’d perform a full body checkup on a company.

There is No Right Way
Sadly, no matter how often we preach the sound methods of investing, everyone (including the best investors) will make mistakes. There are infinite ways to do something wrong and few way to do it correctly. Don’t be surprised to hear preposterous methods such as selecting stocks with ticker symbol that include only vowels or jotting down the letters in a child’s spoon of alphabet soup.

There is a chance that these five wrong ways end up making you money. But, when you stop to think about it, how would it be any different from gambling?

(Photo credit: Jesse Gardner)

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Aug 10 2010

What I Did When My iPhone 3GS Died

It was just another Sunday. It is laundry day.

As I reluctantly woke up to my mom’s voice, I rolled up my bedsheets and what dirty clothes I had into a ball and tossed it into the washer.

About 45 minutes later, I heard a whipping cry as my mom pulled my iPhone 3GS from the bundle of wet clothes. Exactly how that happened is still a mystery to me but I blamed my half-asleep state of mind.

The Proper Reaction
The typical instinct would be to poke at every button in an effort to elicit any signs of life. Instead, I hopped on my laptop and resorted to good ole’ Google. Soon, my iPhone was in a Ziploc bag filled with uncooked rice and silica gel packets.

For the next 3 days, I’d occasionally open up the phone and place it where there was a light wind current from the fan.

In the meantime, I was able to find a Motorola RAZR, which was able to work with the SIM card from the iPhone 3GS. It felt like such an ancient piece of hardware but I had not other choice.

A Tragic Loss
Unfortunately, after completely drying the iPhone 3GS, it failed to turn on. My baby did not survive a full wash cycle.

It was still under the one-year warranty from Apple but the warranty does not cover water damage. Each iPhone has moisture indicators in the headphone jack, the sync cable port, and on its internal components. Therefore, Apple will know if your non-functional phone was the result of water damage.

My Options
I went directly to the Apple Store to let them know of my situation and see what I could do from here on out. Since my phone wasn’t covered under warranty, I couldn’t get a new or refurbished 3GS squat-free. And, iPhone 4′s were sold out in stores and were estimated to ship in 3 weeks.

Only 10 months into my two-year contract, I checked my upgrade eligibility with AT&T and a 3GS (8GB) would cost me $299 while an iPhone 4 (16GB) would cost $399.

Next, I head to the world’s most popular auction site and looked around for any iPhone 3GS. The price range for a used 3GS on eBay was $300-$400. Then, in hopes that someone on eBay was willing to pay for a water-damaged 3GS, I searched the completed listings for broken, as-is, non-functional, and water iPhone 3GS and found that they sell for quite a lot!

If I was lucky, I could get over $200 for it. That settled it for me.

My plan was:

  1. Order the iPhone 4.
  2. Use the RAZR until the new phone arrives.
  3. Sell my 3GS when the new phone gets here.

Making Me Whole Again
Logging in to the AT&T account to order the iPhone 4 took less than 5 minutes. While Apple said it ships in 3 weeks, AT&T said it would ship in 7-14 business days.

Surely enough, I had the iPhone 4 in my hands two weeks later.

After practicing some of my unremarkable product photography skills, my water-damaged iPhone 3GS eBay listing was up for a Buy-It-Now price of $230. I was overshooting it quite it bit but that’s my method of selling.

Within 30 minutes, I received a $190 offer for it. I countered for $200 and it was done. I pocketed about $180 after fees.

So, I “upgraded” my phone for about $40 more than a new customer and had to renew the two-year contract (but still kept the $30 unlimited data plan).

Living a few weeks without an iPhone felt like a handicap. I guess that’s what technology has done to us. And contrary to popular belief, I did not “wash” my 3GS as an excuse to get the iPhone 4I didn’t want to get it yet. But, life threw a curveball at me and I think I came out okay.

(Photo credit: kona99)

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Aug 8 2010

Weekend Links: Refill the MetroCard

For someone who can’t go anywhere without the use of public transportation, I was left in the dark for quite a while when it came to buying MetroCards for the subway.

In high school, we were given student MetroCards. And the few times that I couldn’t use the card, I piggybacked on a unlimited MetroCard. In college, I bought a MetroCard that had many, many rides in it and used it during the few weekends that I came home. Therefore, I wasn’t accustomed to MetroCard refills.

Ever since graduation, I was traveling with a per-use MetroCard. Then, my younger cousin pointed out to me that I could refill my card and keep the few cents in bonus money that the MTA gives us when we buy multiple rides in a single purchase. Usually, I toss the cards when there a few cents left on the card since I couldn’t get a full ride on it. Refilling the card would tack on more bonus money that would some day equal to a full ride.

Now that I know, I’ve been taking advantage of it and saving a little bit every time I fill up. I still feel like a fool not knowing this early.

And now, on to some interesting money articles as of late:

  • How Much Credit Card Rewards Cost the Poor at Bucks New York Times Blog. Deeper analysis of the credit cards reveals that the rewards system is transferring wealth from the poor to the rich. Retailer up their prices to cover the cost of rewards. Since the rich are likely to use their credit cards to reap these benefits and the poor are more likely to use cash, the poor pay for the rewards that they don’t get.
  • Is It Better to Rent to Males or Females? at Financial Samurai. We all want the perfect tenant – pays on time, quiet, clean, and likable. Although we know there are laws to forbid landlords from discriminatory practices, gender differences play a huge role for potential tenants.
  • What Will Retirement Look Like For Younger Generations at Frugal Dad. It’s true. The world is changing at such a rapid pace that the lifestyles from 5 years ago will not be the same in the next 5 years. Humans are living longer and the world is a difference environment overall. For retirement, it will be the same. As a part of the younger generation, I try to prepare but our situations would change our perspectives.

Carnivals in which Realm of Prosperity participated:

(Photo credit: ishane)

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