RevolutionMoneyExchange Referral

RevolutionMoneyExchange is like PayPal, but only better. Click here for a detailed review by Sun.
I was able to catch the $25+$5 promotion that Sun mentioned in his post right before the promotion ends. It, however took them 2 weeks to set up my account since I have lived less than 12 months in my current address, and they had to ask me to forward a copy of my utility bills to verify it. But from talking to them, the account opening will be a soft pull, and hence won't affect your credit score. Now, they still have this $10 referral bonus for current account holders. If you are interested in establishing an account with them, I'm more than happy to refer you and share the $10 referral bonus with you. ($5 goes to you and $5 goes to me.) Just shoot me an email, and then I will send you a referral. Upon receiving the $10 from RevolutionMoneyExchange, I will send you $5 immediately via RevolutionMoneyExchange.

How The American Economic Association Allocated Its Dollars

The S&P 500 index gained 5.49 percent in 2007, while the portfolio of AEA gained 10.2 percent. Two things to take notice here:

1. The AEA's portfolio is composed of all vanguard funds;
2. The most significant change to the portfolio after April 2007 is a 20% shift from bond to foreign stocks.

Though the article didn't tell you what funds exactly the AEA is holding its assets in, you can easily look them up from vanguard's website based on the general funds' names given in the article. And you can also look up the corresponding ETFs' here.

As The Government Deficit Keeps Rising...

In a letter written to congressman Paul Ryan, CBO concluded that

The United States faces serious long-run budgetary challenges. If action is not taken to curb the projected growth of budget deficits in coming decades, the economy will eventually suffer serious damage. The issue facing policymakers is not whether to address rising deficits, but when and how to address them. At some point, policymakers will have to increase taxes, reduce spending, or both.

This gives another reason why one should consider a Roth IRA rather than a traditional one. But as the deficit keeps climbing up, we may have a much gloomier future as put by the CBO in the letter,

If foreign investors began to expect a crisis, they might significantly reduce their purchases of U.S. securities, causing the exchange value of the dollar to plunge, interest rates to climb, consumer prices to shoot up, and the economy to contract sharply. Amid the anticipation of declining profits and rising inflation and interest rates, stock prices might fall and consumers might sharply reduce their purchases. In such circumstances, the economic problems in this country would probably spill over to the rest of the world and seriously weaken the economies of the United States’ trading partners.

This makes me wonder whether it would be wise to put my money in the U.S. stock market at all. But we knew the inflation is going to shoot up, and putting money in the market seems to be a good if not the only way to provide an aegis. Maybe a good solution would be to quit my job and live on the money I saved up so far, and at the mean time, really concentrate on personal investment such as studying Economics, and that will certainly get you a job when the Economy goes bad in the future. Well, maybe not. But the idea of personal investment rather than monetary investment should be right.

Get $75 from Bank Of America

Open a checking account (either online or via a local branch) using offer code AOU260508 with Bank of America before July 31, 2008, you can receive $75. Click here for more details.

Notice that it says this offer does not apply to existing BoA customers or student account. If you are a current BoA customer, I strongly encourage you to visit your local branch and talk to the personal bankers. Most of the case, they can still find a way to get this $75 for you. Believe me, you just need to ask. If you just move to a different state, then this problem will be solved easily. You can just cancel your account opened in your old state, and open a new one in your new state. And your personal banker will be more than happy to do so.

Provident Direct Lowers Its Interest Rate

Today, I received an email from Provident Direct saying that their online saving interest rate will be dropped by 0.25% to 3.50% on May 19th, 2008. I've covered it as one of the highest yield saving accounts before. It still will be even after the 0.25% cut. Here is a comparison list:

Bank	Online Savings Annual Percentage Yield**
Provident	3.50%
FNBO Direct	3.25%
HSBC Direct	3.05%
ING Direct	3.00%
Emigrant Direct	2.75%

An Apology

For those of you who read my blogs, I apologize for not updating for about 20 days. During those 20 days, I took a vocation and refocused myself.

Now that I am back. Stay tuned for more updates.

Invest In People: 3 Steps to Invest in Yourself

In my first post of the "Invest In People" series, I talked about why the concept of investing in people matters. And of course, the first person you should consider investing into is you yourself. To follow it up, I'd like to point out three steps that can get you started.

1. Make Serious Investment In Your Hobby. A hobby, by definition, is something we love to do but don't spend a lot of time doing. Because we don't spend a lot of time on our hobbies, we usually are not very good at them. A profession, by definition, is something we usually dislike to do but spend a lot of time doing. Because we dislike our professions, we usually end up not perfecting them even though we spend a lot of time on them. To remedy this, it will require you to spend more time in your hobby. But you say, "we only have 24 hrs a day." I then say to you, "I think we have 1,440 minutes in a day." No, the idea is not to trick you to think we have more time by converting hrs to minutes; the idea is to give you an admonition: stop procrastinating and utilize every minute. Block several hours during your alertest tint for your hobby/the thing you most love/most important to you. Squeeze errands to the discrete minutes slots. It is the same idea as paying yourself first. We hear people talk a lot about asset allocation, we can use the same idea to allocate our time. Of course, if you can afford spend less time on your disliked profession (I suggest you do this strategically), you then can spend the time on your hobby. The same idea as taking out money from a low interest account and depositing into a high yield saving account. The ultimate goal is to turn your hobby into a profession, and moreover, to perfect your hobby. The resulting benefit is that you can generate income by sharing/teaching your hobbies to others. To give you an example, I've been learning Tango dancing for 8 months. I do it on M, T, F, Sat, with at least 2 hrs each day. It is like pursuing a degree. People joke about it when they hear it. "Yeah, it is like pursuing a master degree." I usually tell them that, not only because I love Tango, but also because I know it can generate a stable income after I become good at it. Besides investing more time in your hobby, it is necessary to invest money in them as well. If you want to turn your hobby into a profession, you will have to pay your due first, meaning spending money learning it from the best teachers out there. What if you don't have a hobby? Find one. Pick anything and just do it. Find out later whether you have the passion for it or not. If not, simply stop doing it and find something else.
2. Get a higher degree from the top schools. This is true especially if you are like me, 20 some year old, just out of college. Don't settle for a job even the job appears to pay you a huge amount of money comparing to the old school years. Don't let this fool you. Start preparing for the GRE and grad school applications while you are at the job. Don't waste your youth and talent on the minor petty tasks at work, aim high. Actually, that's why I was absent for a week. I was busy with getting myself in the track of getting into grad school. After considering my undergrad education, my academic interest, and money prospect, I came up to this clear goal: a finance PhD in Columbia. Once your goal is set, the rest is just to work for it.
3. Learn how to negotiate. This is something that I discovered just recently. The truth about human beings is that we all want things are going according to our wills at all times. Often times, our wills are in conflict with others'. When this happens, if you are smart, you will have to ask yourself what the most important to you, and comprise on the things that are unimportant to you. This is the art of negotiation. It is an art as well as a skill, and like many other arts and skill, it requires both inspiration and practice. One may need lifetime to keep perfecting it. The benefits it hence brings will be huge.
   

Make Money While Flaunting Your Prophetic Ability

Have you ever bet on a football or basketball game with your coworkers or colleagues betting on the rival team? Do you still remember the last time you won the bet and feeling great about being able to foresee a result that many others are not able to? Ever since year 2008, you probably have already talked to your friends relentless about how certain the oil price will break $120 by the end of August 2008, how certain France will be the first country to announce a boycott to the Beijing Olympics, and how certain Obama will win the democratic presidential nomination. Now, instead of talking about your predictions, you can start making money off of them, under the condition that your predictions are more accurate than other people's.

Thanks to Predictify, a company lets you input to their website your predictions about the outcomes of future events. You may be compensated if your prediction comes to be right or close to be right. The idea was so intriguing to me that I waited no time to join it. By the way, the joining is free and all you need to do is to provide an email address, a user name and a password.

Here is how Predictify works. There are two kinds of events available for you to make prediction on: premium and free.

• Premium: The payout money pot for the premium events are greater than $0. (I've seen ones raging from $500 to $3000 so far.) Each premium event has a limit on how many people could participate. You also have to give a little demographic information such as gender, race, and age (basically like taking an anonymous survey). The payout you receive depends on how accurate your prediction is and how early you sent out your prediction. There are new issues added every day and premium issues tend to be fill up quite quickly. So far, I participated in two premium events, and not sure of my payout yet since these two events are still running.
• Free: The payout money pot for the free events is $0, which means that there is no cash payment involved. You will instead receive member points and hence rankings if your prediction comes close. Why do you want a high ranking, because with a higher ranking you can earn a bigger bonus in the premium events. With the highest rank, "Guru," you can earn 3 times of your payout in an premium event. See here for details.
  

The events listed cover a broad range from sports to pop culture, from politics to economics. For example: the outcomes of the democratic presidential final nomination or the sale price of a house. Even better, you can create free events that you want public opinions for others to predict. Of course, you can create premium events as well, which will cost you $1.00 x the number of participants you allow. By the way, creating events can also increase your member points.

Finally, with your prediction you can add a comment explaining your reasoning behind and you can change your prediction as long as the poll is not closed.

Eating Out Getting More Expensive?

I haven't been eating out for 3 months, and I am very proud of that record. So when I sat down with four other friends in a modest Thai restaurant on Saturday night, the first thing I noticed was that the prices on the menu are relative high: a soup cost around five bucks, and a red curry costs $12. I ended up ordering the red curry (did I mention that I didn't order any drinks but ice water?). The final bill added up to $16.90 including tax and tips. On Sunday night, I went out with two other friends to a modest Chinese restaurant. Again, I drank water and ordered one dish. The final bill came to $14.00 including tax+tips.

Have you been dining out lately? How much did you spend?

Sirius, This Time Looks Serious

I started buying stocks four years ago when I was a sophomore in college. Sophomore comes from the Greek words: Sophos (wise) and Moros (foolish). So it really means "you thinks you are wise but in fact your are very foolish." I was such a sophomore. At that time, Howard Stern signed contracts with Sirius, and that news alone pushed up the stock price from $5 to about $9 within a period of a few months. I got in around $6 and with the conviction that the stock price will double. Well, four years past, SIRI's price is less than half of what I bought at. It hit a new low today, with after market trading ending at $2.49. During the course of four years, its stock price faltered but never reached $6 again, let alone my wished target $12. I sold half of my positions around $4 to take a loss, leaving the other half to take on the long term bet. Earlier this year, I was hoping the merger ride can give it a boost, but with the final word still yet to come, people seemed to have lost their patience. I think that's why we saw the price drop during the past two days. Since it's a small amount of money left, I will leave it there and continue bet on the long term. But the lesson should be learned: Never Never Never buy anything unless you done your research. Pig can never be a bull, and a pig only gets slaughtered.

A Free Dinner or A Trap: A New Type of Mutual Fund That Pays Predictable Income

If the following type of mutual fund is offered in your employer sponsored 401k plan, are you going to consider to add it to your portfolio?

Predictable Lifetime Income. You are guaranteed for life an annual income payment whenever you decide to start taking income withdrawals. The income payment is calculated off the highest value your mutual fund has ever achieved. For example, suppose your income is set to be 5% of your asset value, and suppose your initial asset is $10,000, and it hit $12,000 and then falls back to $8,000, your guaranteed annual income will be 5% x $12,000.

The 40-60 Allocation. The fund will invest 40% of its asset to fixed income products such as bond and 60% to stocks.

Flexibility. You can add funds or withdraw funds at any time, and ultimately pass your assets onto your estate without penalty.

Low Cost. The annual cost for the fund is 1.00%.

I was asked to fill out a survey regarding to this type of fund today. After going through the survey, my first reaction was that the mutual fund companies are really hurt by the recent market turbulence and hence have to come up with "new" products to attract potential investors. Though the idea of guaranteed lifetime income sounds appealing, I have several major concerns before expressing my accolades:

1. The idea of the guaranteed lifetime income essentially adds to the fund a saving account feature, and thus makes the fund appear to be less risky. For us investors, we need to concern whether this guaranteed income rate is a fixed rate set when the fund is initially purchased and remains fixed during the course of withdraws or it actually fluctuates. We also need to concern whether this guaranteed lifetime income is calculated in a compounding manner.
2. 1% annual cost is not that low. There are plenty of index fund out there that have cost below 0.5%. We need to ask about the turn over rate and hence the estimated associated commissions because these are another huge cost when it comes to investing in mutual funds.
   

What's your take on this?

PineCone Research Opens Its Panel Again

I've talked about my online paid survey experience before, and PineCone Research is the one I highly recommend due to its survey frequency, apt payment, and free sample trial out. Click here for details. One non convenience about it is that you cannot join anytime out of your own will, you can only join through referral.

Recently, I received an email from them asking me to make referrals. They are growing and hence opening up their panel again. So if you'd like to try it out, please click here to join. For more information, please refer to the following pages:

What is PineCone Research

Privacy Policy

Invest In People: Enrich Yourself First

With the economy going into a recession, the housing market still in a turmoil and the stock market being turbulent, what is the best place to invest your money and time?

The answer is you and the people around you.

The nobles and lords in China two thousands years ago knew the importance of investing in people. They fed, clothed and sheltered those so called "wandering intellectuals," and in return, those intellectuals provided services ranging from all areas of life such as bodyguard (using swords), estate management and financial planing, strategic plans for the nobles to ascend to higher ranks, and etc. Nowadays, we hear many companies shouting out "invest in people" as well. But this idea of "investing in people" does not prevail when it comes to a modern individual. When we talk about investment, we often, if not always, focus on conventional investment types such as stocks, bonds, mutual funds, ETFs, Golds, Real Estates, and etc. We seldom even think of investment in people, let alone having a strategic plan for doing so. One reason might be that it is hard to measure the returns. The other reason might be that we refuse to consider a friendship or a relationship as an investment because doing so will make us feel that we are too mercenary and hence guilty or shamed as a human being. Whatever the reason might be, I hope I can convince you, by the end of this series of articles, the importance, the legitimacy, the beauty and the ways of Investment In People.

The closest person available for you to start investing immediately is yourself. I suggest that you take a look at yourself, and start to get to know yourself in an honest way. Knowing oneself is an arduous and continuing process. Thus you will need to ask yourself specific questions. For instance, you may want to ascertain whether you explored a certain talent or faculty of yours such as dancing. And it takes a second for you to find out that you've never danced before. Instead of saying "I don't know how to dance," you say "wow, this area is waiting for me to develop, and I'd like to look into it." (The same thing a developer would say to himself when he spots a piece of land.) So you look into it, and found yourself fall in love with tango. Then you decide to take some classes. You discovered that you are not a genius in tango, but you sure have some potential. Then you realize that your tango instructor lives off of teaching tango, and this makes you wonder, "what if I seriously learn and practice tango, then by the time I retire, I may be able to teach and keep receiving income as well." Once you realize this, dancing tango becomes an investment for you, and you are the investment. By the way, this is an actual case happening to me, and I can tell you so far the investment has been great. Yeah, this is the one great thing about investing in yourself, its value will increase as long as you work hard on it.

Save Time & Save Money On Textbooks

Recently I've decided to study GRE and Mathematical Finance. I've got a list of good books on these subjects, but they would cost a fortune if I buy them. So here is what I did:

1. Check with the local library. I was agog to discover that my local library carries all the GRE related books on my list. There are two good reasons of using borrowed books to study the GRE: (a) these books are valuable only temporarily and will be worthless after I took the test; (b) a return date will help stop me from procrastinating.
2. Use ILLIAD. ILLIAD is a system that allows you to borrow books from all participating libraries nation wide. Since lots of university libraries are participating, it is a good way to borrow textbooks. The only disadvantage is that the book loan length is usually 3 weeks, and sometimes the whole borrowing process can take a month before the book is delivered to your hand. But hey, it is free textbook. I used this service to borrow some of the mathematical finance books on my list, and of course, 3 weeks is not enough for me to go through the book thoroughly, but it will tell me whether it is worth to buy it. Once I decide it worths the money to buy, I then go to the following website.
3. http://bigwords.com/ What this website does is to compare all the offering prices of the book you are interested in listed on all the online book stores and give you the best one. Moreover, if you are buying a bundle of books, then it can compare all the prices of them at the same time and give you the store combination that will cost you the least. Then you can purchase them individually through each particular store. This saves huge time and big money. I've got two books via this website.
4. Free Downloads: http://read.freeduan.com/ This website provides tons of links for free download for technical books such as math, engineering, programming, etc and popular magazines. Registration is free (you only need to provide an email) and required to see the download link. I strongly suggest to check this site before you buy any books.
   

Admonition of Recession

On Wednesday April 02, the day after April fool's, Bernanke conceded for the first time in front of a congressional panel that U.S. economy may slip into a recession. On the same day, Dell announced to follow its job cutting plan to close down its Austin manufacturing facilities and lay off 8800 employees. On the same day, my company also decided to close down 10 offices and kick out about 200 employees. I wasn't asked to go, though the Austin office I currently work at is to be shut down. I was actually quite agog over the second and the third news for the following reasons:

1. Amid the housing turbulence nation wide, Austin housing prices actually appreciated 0.3% over the past year. This makes Austin one of the few most active housing market nation wide. I've been shopping around and looking for bargains, but there are hardly any. The dell job cut will definitely have a negative impact on the local market, which will be good for me.
2. The closure of our office means working from home, which saves gas and time to travel. Plus, this will enable me to move to a cheaper apartment which is far away from my current office, which is located in the most expensive area in Austin.
   

Looking for High Yield Accounts?

Consider your local credit unions. While it is pretty hard to get a rate higher than 4% nowadays from banks, many credit unions are still offering rate above 4.5%. Some even offer above 6%. Credituniondeals is a good place to find such deals. Note that credit unions are more restrictive regarding to who can open an account with them, usually one has to belong to certain organizations in order to be able to open accounts with certain credit unions.

DRIP

Suppose you found this killer company and decided to buy some of its stocks, so you transfered some money from your checking account to your brokerage account and made the purchase, with a commission fee paid to your broker.
You may wonder, "wouldn't it be nicer if I can avoid such a commission fee?" Yes, it would be, and you may actually be able to do it by buying stocks directly from the company instead of from your broker. The following is a good list of articles on DRIP (dividend reinvestment programs) purchases:

1. How?
2. How to start?
   
3. Where to go?
4. Case study: Bank Of America DRIP
5. Case study: P & G
   

Have you filed your 07 Tax Return yet?

I did mine yesterday using TurboTax online service.

Notice that TurboTax has four versions: Free, Deluxe, Premier, Home&Business. The free edition is just as its name indicates, completely free including e-filing; The other three are all free to start, which means you can use them to prepare your return and pay only if you decide to do an e-filing via that version. Therefore, I used the Deluxe version to prepare my tax, and then went through the process again using the free edition. They are almost identical (they gave the same refund number) except the interface looks a little bit nicer in the deluxe version, and you can not use the audit step in the free version. Of course at the end, I submitted my return with the free edition.

3% Cash Back or 1%?

The Sun's Financial posted a list of credit card that earn cash back. The American Express and Costco TrueEarning card is the 3rd card on the list. The cash back percentage are indeed as Sun listed, I'd just like to add two things here:

1. 3% back of gasoline only for purchases made at Costco Gasoline and domestic stand-alone gas stations. Gas purchased at warehouse clubs other than Costco (for example, Sam's club), superstores or supermarkets WILL NOT count towards this 3%.
2. You will receive a 2% or 3% rebate only if the merchant submits the Charge for your purchase under the appropriate merchant code, industry code and required service or product identifier established by us (referring to American Express) and the merchant. If the merchant submits a Charge of purchase under a different merchant code, industry code and required service or product identifier, you will receive a rebate of only 1% instead of 2% and 3%. This change becomes effective on May 1, 2008. Note: I don't really quite understand what this is implying. Sounds like that we will depend on the merchant to get the 3% cash back, which will not be a good thing. Need to find out, and will update afterwards.
   

Simple Arbitrage

If I had a big lump sum of money, I'd put it in a (or several) FDIC insured high yield saving account(s). The idea of living on fixed income, in this case, the interest, is far more appealing to me than seeking capital gain in the stock market because the risk associated with the former is much less than the latter. Putting money in FDIC insured savings is almost risk-free. The problem is that I don't have this big lump sum of money. This thus creates the following arbitrage scenario:

1. Borrow with 0% or low interest rate.
   
2. Deposit the borrowed money into high yield (higher than the interest rate you borrow at) saving accounts or CDs.
3. Pay back the borrowed money before the borrowed interests go up.

These are the general steps. There are many details to be furnished to complete a sound arbitrage. One of them is that where can you borrow at 0% or a low interest rate? This is easily answered by App-O-Rama, a website that gathers and publishes up-to-date "good" credit card offers from many financial institutions. If you have a good credit, you will have no trouble of getting approved by multiple cards simultaneously. Here is an example. Another important thing to keep in mind is the date when the borrowed low interest rate becomes a high rate. Before you jump in this arbitrage game, make sure you calculate when and how to pay back the borrowed money, and how much profit you gonna make. Also, are you purchasing a house soon? If so, arbitrage is probably not a good idea for now since most of the credit card application process will result a hard pull on your credit and hence lower your credit score.

Free 128mb USB drive

Air Flex is offering a free 128mb USB drive.

Hurry up and Grab it!

4.5% High Yield Saving

Having trouble finding a high yield online saving account?

Provident Direct could be your lover.

For details, please read this awesome article written by The Sun's Financial Diary.

Interestingly, Sun got this information from the forum at fatwallet.com, which I blogged about just recently.

Huaneng Power International Inc. (HNP)

With Dow ended around 12,099 today, some people are already saying that the market will hold around this level. If the bottom is near or maybe already here, then the next question is that which stock you should buy. According to Morningstar, Huanneng Power International Inc. (HNP) should be on the top of your list. It is the largest power producer in China, and has a privileged relationship with the Chinese government. China's thirst for power and energy will keep growing in the coming years as its economy keeps booming. The current power shortage will keep the demand outstrip supply for at least a few years. The risk lies in that the shortage of the coal supplies will continue worsen in the coming years. Morningstar predicts its 3-year expected annual return to be 33.9%. The stock ended at $26.08 today, close to its 52 weeks low, $24.00, making it a great bargain.

I took a look at its dividend history. It turns out that it pays a pretty good dividend as well, especially considering its growth prospect. Though caution should be made since the dividend history is only 5 years.

Daily Price History			2004	2005	2006	2007	2008
Dividend History			12-03	12-04	12-05	12-06	12-07
Dividend $			0.82	1.21	1.21	1.25
Year-end Yield %			2.37	4.02	4.61	3.47	3.51

Online Coupons and Cash Back

Where can you find bargains? Even better, where can you get cash back on top of the bargains?
Fatwallet is such a place.

I discovered it while I was searching laptop deals online. What I found? Lenovo is having an online sale with 10-25% off. Now, here is where the kick comes in: if you are a registered member of fatwallet, then you can get 8% cash back on top of the discount. Sweet, right? By the way, it is free to become a member of fatwallet, and all you need to do is to give them your email and choose a user name. Moreover, it has tones of cash back opportunities with different merchants. To see how it works, please check out their website for details.

The goodies doesn't stop here. Fatwallet also keeps a forum running where people discuss useful information ranging from investing to money savings. For example, I was happy to find one of the thread mentioned that a regional bank called Provident Bank still offers 4.5% yield online saving account, which is pretty remarkable comparing what most of the banks offer, especially after today's three quarter percent rate cut.

What's your favorite bargain site?

Another $300 Income On the Side This Month

Earlier, I mentioned that I took a document prep side job. It turned out that I didn't have any project work for my daily job for the past week. So I've been doing this side job at my regular job time. This means I didn't spend extra time to make this $300. I've received the full payment $300 over the weekend. Moreover, I was offered to do another job with the same amount of payment plus bonus. The time to complete is one week. And I took it.

When someone is offering a side job, are you going to take it? I will if

1. It won't take me long hrs to finish. This implies that it must be something within my areas of expertise or easy for me to figure out.
   
2. It pays good money comparing to the hrs I'll spend on it. I consider $25 per hr to be good.
   
3. It pays good non-monetary returns such as a new connection, some new learnings, or reinforcement of old knowledges/skills, etc.
   

Once I decide to take the job, I make sure I get the job. If a job passes the above 3 criteria, there are usually many people who will be compete for it. How are you going to win the final deal? Before telling the person that you will take the job, make sure you

1. Show great concerns about the job. Ask for specifics about the job.
2. Show your competence. Show what you can do related to the job requirements.
3. Be honest about 1 and 2.
   

After you are offered the job, remember to discuss the installments of the payment. I don't like to receive a lump sum at the job delivery time. The person who is offering the job may not feel comfortable of paying you the lump sum at the beginning either. The best is to set up specific installments according to completions of sequential job tasks.

Getting Paid for Filling Out Online Survey

I wrote a post on PineCone Research before. Besides it, I've also tried out the following paid online survey sites: Surveyspot, GlobalTestMarket, your2cents, Opinion&Outpost, and BrandInstitute. Here is my experience with them so far (I started on Feb 9th, 2008), ranking from my most favorite to least favorite:

1. PineCone Research: $14. Fast payment. The check usually arrives within 5 days of survey completion. Free sample try out. You always get paid every time you start a survey, regardless your answers. I receive one survey per week on average.

2. Surveyspot: $15. Lots of survey opportunities. You can log in to your account and actively choose to answer the available surveys. Lots of surveys only let your participate sweepstakes, which I'd skip. Plenty of paid surveys. The highest payment for a single survey I encountered was $7. In order to get paid, you have to be qualified for that survey. It happened to me that after spending 5 minutes on a survey, it tells that I'm not qualified. Slow payment. It even takes 4-6 weeks for the payment to show up in your account.

3. Your2cents: $17. Not that many opportunities. But have high payment surveys. For example, I made $11 off of one survey.

4. The rest: Just not worth the time. It is almost always that I fail their qualification after spending 1-5 minutes on the survey.

$100 for You

optionsXpress is having this referral program that enables both you and me receive $100. In order for this to work, you will have to

1. Be a U.S. citizen or resident.
2. Send me an email asking for a referral;
3. Upon receiving your email, I will send you a referral;
4. Open a new optionsXpress account with my referral and fund it with at least $500 before March 31st;
   
5. Carry out at least one trade;
6. Maintain your $500 minimum for a minimum of 6 months;
   

As a "thank you" gift, I will give you half of the $100 deposited into my account at the end of the 6 months period. Please make sure you have a paypal account since I will send it to you via paypal.

Please note: It is always good to read the related disclosures first before you decide to open an account with any financial institution.

$300 Income On the Side This Month

I took a document preparation side job a week ago.
I was asked to come up with a technical 60 pages minimum report in 2 weeks.
I was offered $300.00 base + bonuses depending on the quality of my work.

I've received $100.00 in payment already, and will receive the rest at the end of this week.

What's best? I learned a lot of technical stuff as I was preparing this document. One stone two birds.

Net Worth Update: Feb 2008

Please click the picture to enlarge. As you can see, my net worth was $27,539.58 at the end of Feb, representing a 9.53% gain from January. Most of the gains are coming from my salary income. I haven't gone aggressive on investing yet, mainly because I am still studying asset allocation. So far, most of my investment are in my 401k plan. I have some securities in my scottrade account as well, but they are doing pretty bad at this time.

Pay Your Debt First

One of my co-workers mentioned to me he's lost some money in the stock market, and he's still got two student loans to pay off. Some of the student loan was for his education, but some was put in the stock market. He must be thinking of making a fortune at that time, but it didn't turn out that well, and he lost almost all of them. What he said to me got me start thinking in his shoes. If I were him, I would definitely not do a swap like he did, using loans to play in the stock market. I probably would take out the loan and put it in a high-yield saving account to earn some free interest since most student loan are interest free while you are still a student. If I were him, I definitely would pay off those student loans first before investing huge amount of money in the stock market. But if I were him, I would try to avoid taking out any loans at the first place.

"Avoid debt!" My mother used to tell me when I was a little boy. As a result, I was able to get a college education without paying a penny. Thanks to scholarships and financial aid. As a result, not only I don't pay anything out of my pocket for tuition+books+room+board, I even receive a refund check every semester. I'm very proud that I'm still debt free at this point of my life. I often hear people saying that it's necessary to take out this loan or that loan, which I disagree with completely. When you have to take out a loan to do something, this suggests one and only one thing, and that is the thing you are aiming for is not something you can afford now. You have to ask yourself, "Is it really worth it?" Of course you will have to fill in the blanks for the definition of this worth here. But one thing you have to be clear is that taking out a loan will for sure put a burden on your financial freedom, which will affect your overall freedom inevitably. Be cautious, and avoid debt.

Take Your Losses?

Today with the Dow dropped below 12,000, one of my co-workers sold another big chunk of stock holdings. Well, he had to since he got a margin call and had no extra cash or confidence to cover it. "Well, now, I feel relieved." thus said by him. I commented that a conservative long term perspective is crucial. He said immediately "the long term way does not work because it totally depends on when you get in (the market) and what kind of portfolio you have." Another co-worker overheard the conversation, and said, "Conservatism is not needed when you are young. If I can double my money in 6 months, then why would I go with 30 years?"

I could've said to the first person, "Instead of blindly concluding the long term doesn't work, why doesn't you figure out the timing and the kind of portfolio you are most confident with and give it a shot?" I could've said to the second person, "How certain are you about doubling your money in 6 months? For me, I am more certain that my money will double in 30 years than in 6 months." But I kept myself quiet for I know that we are coming from different planets when it comes to putting money to work.

I am an investor, but they are opportunists deeply in their hearts, though they claim that they are investing their money as well. For me, investing is all about minimize the risk of my capital loss. For them, trading is all about maximize the capital gain and minimize the capital loss; they focus too much on the former, and too less on the latter. It is worth of pointing out one thing, and that is inherently, time means much more to them than to me because capital gaining or losing is directly related with time and flashed out by time, while risk is not. If we use the time sensitivity of stock prices as a benchmark, then we can think of risk as time-free. But the opportunistic attitude is not their problem, their problem is that they do not know that they are opportunists; they thought they were investors. The investor's way of thinking for them is merely a comfort shot, and they take this shot every time they start loosing money. Until one day that they realize that this shot is addictive and can only kill them, they abandon the shot and rant about it. But it ain't the fault of the shot, it is the doctor who prescribe the shot should be blamed. So they really should blame on themselves, well, maybe the so called "professional investing" information as well.

"What am I?" I asked myself this question before taking my first serious amount of money out of my pocket. And my answer is that I am an investor. As a result, I focus on hedging risk. There are many risk hedging techniques including diversification, dollar cost averaging, buy and keep buying, options and its underlying stocks, etc. I'm learning them as I go, and never rush myself into any of them before the full understanding hit me. I've a friend whose answer to that question is that he is an opportunist and a day trader. As a result, he doesn't care about risk at all. Instead, he focuses on making gains and taking losses. Actually, I think he is more focused on taking losses. -7% is his cut-off point and he's very good at following it. By the way, he started with $30,000 five years ago and now it becomes about $500,000. More importantly, his experience doesn't convert me to an opportunist. Sure, a gain of $470,000 in five years is nice, but I am conservative and most comfortable with being an investor. There is nothing wrong with being a conservative, especially when it comes to money. And there is nothing wrong with not getting out of your comfort zone, again, especially when it comes to money.

By the way, how did I know that I was an investor? I asked myself another question, "Will you shop naked at a shopping mall?" My answer was that "No. But if I'm guaranteed that I won't be arrested, that people who know me won't be present, that no camera, video tape or any sort of media allowed, and that there will certain incentives such as cash prize (above $1,000) or other rare gifts upon the completion of the naked act, then I will do it." After that, I knew for certain that I was an investor and never thought otherwise.

The Bargainist

I've subscribed to the Bargainist's feed for a while, and indeed received lots of bargains based on their info, especially those free samples. Everyday, they publish deals, coupons and freebies offered by thousands of retailers and shops, ranging from electronics to cosmetics and from branded clothes to furnitures. My favorites from them today are:

• Dell Computers $250 off
• Cannon SD1000 camera $160
• $10 off selected honey ham

Earn 3% Cash Back

I bought the Costco gold membership ($50 annual fee) back in Dec, 2007. I really enjoyed Costco's seafood, meat, cheese and prepackaged ready to eat food products, but spending $50 every year for a membership makes me less comfortable. I've been trying to find ways to compensate this $50. Some products such as organic milk and eggs are cheaper to buy at Costco than regular grocery stores like Randalls. So I buy them at Costco. I also buy bulks of pasta and non-perish food products at Costco every time I go to eliminate store visit frequency. Their coupons are a great help as well. I use them to stock up shampoo and tooth brushes and toothpaste, etc. But I still think I'm not really getting that much out of this $50 membership fee. Two weeks ago, while I was in their store, they had a promotion for the American Express True Earning Card. So I applied, and here are the perks:

• No annual fee for Costco members.
• 3% cash back on gas (excluding gas from other warehouse stores like Sam's Club) and restaurants; 2% on travel; 1% on everything else. Also, American Express is the only credit card Costco accepts.
• Last year, I spend $3,700 with my credit card. Assuming the same spending this year, I would get between $37 and $111 cash back.
  

Here are the disadvantages:

• This card will be canceled upon the termination of Costco memership.
• Interest rate is high. I have 3 month of interest free, with 16.49% afterwards. So it is important for me to pay my bills every month. Actually, I think I will log in to my online account and click bill pay the same day I swipe it.
• This card may increase your spending since you may want to get more cash back and hence take less control of your spendings.
• A hard pull on your credit.

At this point, I have three credit cards and each of them report to a different credit bureau:

• Chase Blink Mastercard
• Chase Amazon Mastercard
• American Express True Earning Card
  

I do not plan on having any more credit cards for a while.

Free $100 For you

OptionsXpress has this special offer where you can get $100. It ends on March 31st. To get your $100, you need to

• Open an account with optionsXpress;
  
• Fund your new account with at least $500 or equivalent worth of securities transfered from another brokerage. OptionsXpress will pay the transfer charge up to $100 as well.
  

Notice that no trade is necessary to get your $100 bonus. I just opened an account with them today. I do not intend to use it to trade stocks because their commission for stock trading is $14.95/$9.95 per trade, which is expensive comparing to my current broker Scottrade. But I just can't let go this easily obtainable 20% gain. So I'll just leave my $500 there, together with the $100 bonus, to earn interest at their money market rate.

Please read their website for details before you decide to open one.

Good Personal Finance Books

Asset Allocation:

• The Intelligent Asset Allocator by William Bernstein
• The Four Pillars of Investing by William Bernstein
  

$5 from PineCone Research

Have you ever done online surveys? Have you ever got paid for doing it?
I started this online paid survey thing a month ago. PineCone is my favorite so far for the following two reasons:

1. Their survey is personalized to your household. You can only take the surveys that are assigned to you. Once a survey is assigned to you, the money is yours ($3 or $5 depends) regardless the answers you provide. (None of the other websites I tried work like this. Most of them have a screener for you to pass before you can claim the money, which is quite annoying since it is almost always the case that after spending 5 minutes on the survey, and they tell you sorry that you are not qualified. At least, it was the case for me.)
   
2. They pay you promptly. They usually issue the check the next day after you complete the survey. I just got mine for my first survey last week. They have paypal paying service as well, but somehow I was told that I'm not an established member for them yet and hence can not receive my payments via paypal, which is not that convenient. Hey, check works for me.

One thing to notice is that they only open up their panel periodically. And one can only join via referral. I joined via this, not sure whether it is still working. What are your favorite online paid survey sites?

Financial Activity: Feb 2008

Just a quick re-cap:

1. The QQQ Direct purchase plan was set up to purchase QQQQ on every first Thursday of the month. It is free if you only make one purchase every month.
2. Enrolled in Progress Energy (PGN) direct stock purchase plan via Computershare (formerly EquiServe). Yeah, no commission fee.
   

I'm contributing $50 to each plan every month, and intend to hold them for a long time.

As of today, I have 2 checking accounts, 1 CD, 1 Traditional IRA and 1 401k.
Things that I have yet to set up:

1. High yield saving
2. Roth IRA
   

Expense: February 2008

Tomorrow is the last day of February and I don't plan on spending any money, so I'm doing my February expense now.

	Dec 2007	Jan 2008	Feb 2008
Total Spend	$1,150.50	$1,847.00	$1,923.74
Avg Spend	$37.11	$61.57	$66.34

The three month spending trend is going upward. The average spend in January jumped 66% from December last year. This was because I made a $500 donation. February had a 79% increase comparing to December last year because I paid $534.26 car insurance premium for my parents. It is time to cut my expenses. I'm paying $805 for my 1-1 apartment as of now, and as the lease is up (June 1st), I will definitely look for a cheaper place ($600 is what I'm shooting for.) That means an extra $205 per month for investing. Another thing needs to take note is that my grocery spend seems to be going up ever since I got the Costco membership. This is not good. Since I just did my grocery shopping for March, I expect my March grocery spending goes down.

Book Review: The Intelligent Asset Allocator

There are two kinds of investors, be they large or small: those who don't know where the market is headed, and those who don't know that they don't know. Then again, there is actually a third type of investor--the investment professional, who indeed knows that he or she doesn't know, but whose livelihood depends upon appearing to know.
- William Bernstein, "The Intelligent Asset Allocator"

I used to be the second type. When I first started investing back in my second year in college, stocks were the only investment that I knew and stock price was the only thing I considered. Since I had only $600 to play, I wanted to buy a stock with price below $5.00. My logic was that it would be easy for $5.00 to jump to $10.00. Plus, how much further a $5.00 stock can drop? Though by luck, the stock price indeed jumped close to $10.00 after 6 months, and I indeed sold them to secure the profits, there were two fatal flaws in my thinking:

1. Diversification never occurred to me.
   
2. I was gambling, not investing, for the first characteristics of investing is to aim for the long term.

These two points are well addressed in the book "The Intelligent Asset Allocator," not only Author Bernstein tells you why diversification is vital by showing statistics, which was convincing to me, a math major, he also make suggestions on how to do it and what one should consider when doing it. Not only he points out the danger of the gambler's thinking, he goes further by suggesting that even thinking in terms of "recency" should be avoided. The book held in my hands was published in the year 2000, 3 year earlier than the time I made my first trade. Yeah, I could have read it if I were to do some research before jumping into the market. But it is not too late to read it now, and here are some key ideas from the book that got me re-think about my current asset allocation for my Roth IRA: (I haven't opened the IRA account yet due to the liquidity of my money. Patience is indeed a virtue.)

1. Invest on index. (Graham made the same argument in his famous book "The Intelligent Investor")
2. Dividing portfolio between uncorrelated assets. (This is not something that I considered in my asset allocation, for example, I don't have real estate or precious metal funds in my portfolio.)
3. Favor short-term bonds (of six months to five years) as your "risk diluting" asset, rather than long-term bonds. (This is something I considered.)
4. Beware of recency, and do not be overly impressed with asset class returns over periods of less than two or three decades. (This got me re-think about Dodge & Cox funds)
5. never increase your allocation to an asset because of economic or political events or because you have heard an analyst make a convincing case for doing so. (Once you are settled on a target, then you are set. I'm glad that I'm not settled yet, and so far, the only investment vehicle I have is my 401k, which I don't think significant changes needs to be made.)
6. When allocating your money, think all your accounts as a whole. (I had this idea before as well since the final goal is to measure how well your overall net wealth is doing, but I realized it would hard to re-balance such an overall portfolio as well. Mr. Bernstein recognized this as well. I guess the only solution is to give it a try and see how well it goes.)

Stay tune for my updated asset allocation.

Consumer confidence goes down, oil price goes up

The Conference Board's index of confidence dropped to 75.0 in February from 87.3 in January, lower than what Economists expected. This means us consumers are really on a tough spot. The price of gasoline rose 2.9%. Maybe it is time to prepare to jog to work? Food price climbed 1.7%, which reminded me that I just spent $198.34 for my March groceries.

Time to re-budget!

Free Tax Prep Software

Don't forget to do your tax before April.

If you only need to fill out 1040EZ or simple returns, here is a free option. It has free e-file as well.
Free TurboTax Online

Alternatively, you can try this free download of TaxCut Basic 2007. If you want to e-file, then I believe you would have to pay $14.95

Portfolio Allocation for My Roth IRA

When it comes to Roth IRA, I want to make sure not to over diversify. This means having as few accounts as possible and as few funds as possible. If two funds can meet your asset mix target, don't go for an extra third. Since I'm looking at a 30 year investment span for my Roth IRA, I'd also want to set up the account with a fund company directly to avoid the commissions charged by brokerages. This requires me to pick a good fund company that has several good cheap funds that can satisfy my asset mix target. Vanguard is the first that comes to my mind. Their funds are relatively inexpensive. And they don't charge nothing. Not even a custodian fee. But I didn't choose Vanguard at the end because most of their funds require a $3,000 initial investment, which means for the year 2008, with the $5,000 contribution limit, I can only purchase one fund. This will not meet my target. Then I discovered Dodge & Cox. After reading everything from their website and talking to one of their people on the phone, I decided go with them. I think their funds' expense are reasonable, the way they do business is clear, and their management team are serious investors. Though they only have 4 funds, I can use 3 of them to meet my asset mix target. They are rolling out an international fund in April or May as well, so one more option for the future to choose. Their minimum initial investment is $1,000 per fund. The only less perfect thing is that they charge a $12.50 per customer (not per fund) maintenance fee every year. But I still think Dodge & Cox will serve me better in the long run comparing with Vanguard. (Vanguard will take me at least 3 years to meet my asset mix target). Here is my final portfolio with them:

1st Level		Target	D&C
	U.S. Stocks	50.0%	50.0%
	Foreign Stocks	40.0%	39.9%
	Bonds/Cash/Others	10.0%	10.2%
	Total	100.0%	100.1%
2nd level_full	Giant/Large	80.0%	89.0%
	Mid	20.0%	10.7%
	Small/Micro	0.0%	0.3%
	Total	100.0%	100.0%
2nd level_non Foreign	Giant/Large	60.0%	62.4%
	Mid	20.0%	6.5%
	Small/Micro	0.0%	0.1%
	Total	80.0%	69.0%

Portfolio Allocation for My 401K

After setting up the asset-mix target for my 401k account, I wasted no time and started building my portfolio. But before allocating my money according to the asset-mix target, I had to decide which funds to invest in. This process was relatively easy since I've only got a limited choices to choose from. (This is not uncommon for an employer sponsored 401k plan.) When it comes to picking mutual fund for retirement (meaning I will held them for at least 30 years), my first and must-followed criteria is:

Avoid Expensive Fund!!!

This follows after my philosophy: control the things that you can first. The past performance of a fund is at the end of my checklist, if it is even included in my check-list. Now, what do I consider an expensive fund? This is a tricky question to answer because the annual expensive ratio usually don't tell the whole story. If you were to dig into the fund's Statement of Additional Information (SAI), you would be surprised how much more you would be paying besides the expense measured by the expense ratio. The turn-over rate has a positive correlation with the commissions your would be paying, (the bigger the turn-over rate, the higher the commissions), but it doesn't tell us how much exactly the commissions would be. I actually examined the SAI for all the funds I picked for my 401k, and to be honest, even I was able to find all the numbers, these expense related numbers are not by any means easy to understand. I think one day I'd call the fund company and ask their guy to go through the SAI with me. But, just to give you a clue how crazy the actual cost could be, Vanguard Institutional Index Fund (VINIX) has the lowest annual expense ratio (0.05%) among all the funds in my 401k, after adding the numbers of extra costs, the actual expense ratio becomes 0.22%, which is 4 times more! It's time consuming and boring to go through all the SAIs, so I came up with the following rule:

Avoid funds with both annual expense rate > 1.2% and turn-over rate > 150%!!!

These funds would be thrown out no doubt period. Though funds on the boarder line will be considered, for example, my FID overseas (FOSFX) has an annual expense 1.00% and turn-over rate 132%, I prefer funds with expense rate below 0.5% and turn-over rate below 50%. Enough being said, here is my 401k portfolio:

Cap	Ticker	Contribution %
Large Index	VINIX	30
Mid	VHCAX	17
Small	VEXRX	20
Foreign	FOSFX	29
Bond	VBTIX	4

This portfolio meets my asset-mix target. How did I come up these numbers under the "contribution %" column? I designed this neat excel workbook (download it here).

• First, you need to fill out the "Data Entry" tab by looking up the your funds in morningstar and obtaining the corresponding info from the portfolio page. (A page like this) Look at the Market Capitalization table and Asset Allocation table on the page. You also need to subtract the foreign stock holding from the stock holding to get the U.S. stock holding.
• Second, go to the "Result" tab, enter your estimated contribution % and then notice the table on the lower right will give you the mixing result under these contribution%. By comparing this table with your asset mix target and adjusting these contribution%, you can figure out the appropriate contribution%.

Since I wasn't able to find a free and user friendly portfolio allocator that does what I want on google, I came up with my own. Let me know whether this small tool is helpful to you.
Here is the comparison of the resulting mix with my target:

1st Level		Target	401K
	U.S. Stocks	65.0%	64.7%
	Foreign Stocks	25.0%	25.2%
	Bonds/Cash/Others	10.0%	10.2%
	Total	100.0%	100.0%
2nd level	Giant/Large	55.0%	58.0%
	Mid	25.0%	27.4%
	Small/Micro	10.0%	10.6%
	Total	90.0%	96.0%
3nd level_non foreign	Giant/Large	35.0%	36.7%
	Mid	20.0%	19.9%
	Small/Micro	10.0%	10.5%
	Total	65.0%	67.0%

Asset Allocation for My Roth IRA

After I'm done with asset allocation for my 401k, I move on to Roth IRA. I decide to max out the its contribution limit ($5,000 for year 2008) as well. Since I'm not limited to pick from a few costly but mediocre performing funds like in the case of my company 401k, and my 401k is really a conservative approach, I can afford to be more aggressive for my Roth IRA. I set the mix target via the following aggressive-conservative-conservative levels:

1st Level		Target
	U.S. Stocks	50%
	Foreign Stocks	40%
	Bonds/Cash/Others	10%
	Total	100%

2nd level	Giant/Large	80%
	Mid	20%
	Small/Micro	0%
	Total	100%

3nd level_non foreign	Giant/Large	60%
	Mid	20%
	Small/Micro	0%
	Total	80%

Like my 401k, when I do my contribution allocation, I will follow the above target in the level-ordering fashion because I think the first level has most dominant power on my portfolio. To avoid things going wild, I have to hedge the risk involved in the second and third level significantly by allowing only 20% exposure to the mid/small caps.

Asset Allocation for My 401K Account

Deciding an asset mix has to do with one's tolerance of risk.

I've decided to max out my company traditional 401k for the year 2008. This means most of the money I'm going to put to investment will go to this account this year. Surely I want to play safe. But I don't want to have a bland year either. So I came up with a three level mix of which the first two levels being conservative and the third level being aggressive.

1st Level		Target
	U.S. Stocks	65%
	Foreign Stocks	25%
	Bonds/Cash/Others	10%
	Total	100%

Though I think the foreign market will perform better in the coming and next 3-5 years. Our recent market turbulence showed that U.S. market still leads the rest of the world. So I settle 25% on foreign stocks. Next, I set a mix target regarding to the market caps:

2nd level	Giant/Large	55%
	Mid	25%
	Small/Micro	10%
	Total	90%

Mid and small caps usually generate more returns over time but have more fluctuations and risks as well. With 35% in mid and small caps, plus a 10% in bond and cash, I feel pretty comfortable in terms of both risks and potential returns. Next, I want to make sure the non-foreign part has a reasonable mix regarding to the market caps as well:

3nd level_non-foreign	Giant/Large	35%
	Mid	20%
	Small/Micro	10%
	Total	65%

As you can see, the proportion of Giant/Large VS. Mid/Small/Micro is close to 1:1. This will hedge the safety net built by the first two levels by increasing more exposure to mid and small companies. When I do my portfolio allocation, I make sure to follow the level ordering of these three targets. This way, it will ensure a conservative solid backbone and the potential to bigger returns as well.

Note: I distinguish Giant and Large (Small and Micro) because Morningstar report this way and I use the data published on their website to conduct portfolio allocation. The actual difference between Giant and Large (Small and Micro) matters little to me.

About

Updated February 20, 2008.

Beyond Small Money is a personal finance blog. The information published here, unless the sources are explicitly given, are the author's his own. The author is not a financial professional. Readers should use their own judgment and assume the full responsibility when it comes to making important financial decisions. Please consult a trained financial adviser if you want solid financial advice.

The author of this blog, Frankie, graduated from college in May 2007. He took an entry level position for a mid-cap corporation immediately afterwards. Soon he discovered that he was too independent for the corporate environment. He wants intellectual freedom, but he doesn't want to be like a crazy scientist who neglect his personal life and let others take care of himself especially financially. So he started asking himself how to make money without working for it. Well, there is only one answer:

Let money make itself.

Beyond Small Money was hence born, with the goal to serve as a journal of Frankie's path to financial freedom and his research, learnings and thoughts about investment, finance and Economics., as well as a communication channel between you and him.

Welcome and Enjoy!