Personal Finance for the Young, Broke, and Fabulous

 

What It Takes to Work Here: Hooters

"What’s the first thing that comes to mind when you think of Hooters restaurants? I’ll give you a hint: It’s not hot wings. That’s right, you guessed it…technology!”

The folks at the finance and investments site Minyanville have a pretty funny series they’re running right now called “What it Takes to Work Here" where they detail the hiring process of various organizations from Hooters to the NFL to Sea World.  Fun facts include:

  • Hooters’ early adoption of “Second Life” a virtual gaming system to train its girls in a virtual environment resulted in mangled amputated, virtual Hooters girls because of some minor glitches
  • Marine biology coursework, animal husbandry experience, public speaking prowess AND a 33-meter underwater swim are prerequisites to working at… wait for it… Sea World!
  • Who makes around $18.30 an hour and is charged with the task of delivering service at the level of the Ritz Carlton to cranky tech consumers whose products have gone awry?  The Apple store Geniuses!

The girl featured in the pic is 100% natural, despite nasty rumors circulating that her tan is fake.  Hooters haters…

Starbucks CEO realized it’s not 1998 - free wi-fi for all!

The Times reported Tuesday Starbucks’ announcement to provide customers with free internet access starting July 1st of  - yes 20 and motherfuckin 10.  Great idea, Starbucks.  Real ahead of the times.  It’s too bad you guys only rolled out with that gem AFTER you launched a TV advertising campaign and started closing stores.  Seems this would have been an obvious competitive angle to try out first.  Oh, if only I had been in that board meeting… 

"If we can increase the Putomayo listenership by just 23% by 2015, that will make a good dent in the revenue shortfall…"

"Maybe if we can exploit a wartorn African country with surprisingly fertile soil to grow organic coffee beans…??"

"Wait a second… what if - and I know this sounds crazy, but hear me out guys… what if we offered the internet - for free?"  (GASP!) 

The unthinkable coming to Starbucks locations July 1st 2010.

German Millionaires Volunteer to Pay 'Rich Tax'

azspot:

A group of 51 German millionaires and billionaires founded a Club of the Wealthy and wrote to Chancellor Angela Merkel proposing to give up 10 percent of their income in the form of a “Rich Tax” for 10 years to consolidate the budget.

With an estimated 800,000 millionaires (in dollars) — about 1 percent of the total population — Germany is eye-to-eye with the USA and has long overtaken the UK as Europe’s number one “millionaire-land”, both in terms of absolute numbers and as a percentage of the population.

But traditionally, the Germans don’t dare to feel good about their riches. A German would — by and large — never display his wealth too publicly. Being rich, one might think, is not necessarily viewed as a sign of success, but more as a flaw, something to be hidden rather than displayed.

Girl Alert! Bath and Body Works Ridiculous Sale

Boys need not read this post… So every once in awhile, twice a year to be precise, Bath and Body Works decides to change everything about their whole line of products, like the packaging or the “formula” or whatever, and then they practically give the store away.  So, through June 16th you can get their Signature Classics shower gels for $3  - these are the throwback scents from when you were a wee lass like Seaspray and Juniper Breeze.  And get their Signature lotions for $4 until they run out of the ish.  Oh but crazy doesn’t stop there.  On top of that steep discount, you get an extra 20 - 25% off your purchase. 

For a purchase of $25 or more, enter promo code “Twenty” for an extra 20% off

For a purchase of $40 - $50, enter SALE40 for $10 off.  If your purchase is over $50, you’re better off using the 20% off promo since $10 off will be less than 20% of a purchase over $50.

Standard shipping and handling is $5.99 for 3-6 business days.  You can also print these coupons from RetailMeNot and use them in the store.

Without adding tax or shipping and handling, the discounts made their full size lotions $3.06 and their shower gels $2.30.  That’s way cheaper than some Rite Aid store brand stuff so your financial planner says go have a party!  Girls will never have enough lotion or shower gel.  It’s like paper towels.  It will get used eventually.  These also make great gifts - you can buy a few, get a basket and some tissue paper from a dollar store and voila, you’re that super thoughtful sister/daughter/niece/aunt/sister-in-law who’s also frugal and creative and smells amazing! 

There’s been a lot of coverage of the inexplicable 700 point freefall of the stock market last Thursday, but no one has been able to explain it by employing a filthy sexual innuendo… until Jon Stewart had a crack at it last night.

Think in percentages, not dollars

 

Here’s a tip for thinking about money that the old, rich and fabulous are very familiar with but the rest of us struggle with. When it comes to money, we think in terms of dollars when we should be thinking in terms of percentages. Here are some scenarios when it pays to think in percent signs.

As a starting point, it’s helpful to know that the current national average interest rate on a savings account is less than 1%, but if you’re even a little bit savvy, you can easily find accounts earning 1% and a little over by doing a simple search at Bankrate or by reading this previous post. Now assuming you’re somewhat savvy, and you have a savings account earning 1%, that means for every $100 you put in that account for a year, you earn $1 back from the bank. It’s not the best return, but it’s something.

Think in percentages when you need cash… Now considering the best you can do on your money is around $1 on the $100, you should try your damndest never to pay out more than that in fees. When you go to a different bank’s ATM that charges you a fee, look at how this plays out: you can easily pay $2 at the ATM on a $100 withdrawal. So what, you think? It’s $2 and I need cash. Okay, well then your own bank turns around and slaps an additional $2 on top of that. I know, we’re talking about less than $5, but here’s the thing: remember how long it takes to get $1 for your $100? A year. And how long did it take them to make $4 off that same $100? About as long as it took you to enter your pin. Why should you pay 4% to have your own money in your pocket when you won’t even earn a fraction of that for saving it?

By thinking in percents, that $4 fee is a total ripoff. If you think in dollars, $4 doesn’t seem so bad. This is something rich people understand and even though they can put up the $4 more easily than the rest of us, they would be less likely to do so because it’s not a good deal.  Next time you find yourself strapped for cash, consider walking that extra block to your own bank ATM to avoid the fee. Or if you’re totally stuck, try to take less frequent, larger withdrawals when paying fees. This makes the percentage charged to you decrease since $4 on $200 is 1/2 the rate paid on $100.  Or consider buying something at a drugstore or grocery store with your ATM card and then getting cash back.  Many large chains like Rite Aid and large grocery stores provide this service free, ranging from $20 - $100 cash back.  Just make sure to buy something you were going to buy eventually anyway (like toilet paper)!

Think in percentages when taking out a loan… When people buy a home or car on loan, they often just want to know how much the monthly payments will be. The only way to compare loans is to compare interest rates, not payments. The first question you should ask is whether or not you can afford the payments, but the next question is whether or not the interest rate being offered is a good deal, and if you can do better.  Check Bankrate to compare national mortgage and auto loan rates. Always shop around when taking out a loan to see who will offer the lowest rate.

Think in percentages when cashing in your piggy bank... I have a friend who took a pocket full of change to one of those CoinStar machines they have at grocery stores that will sort your change and give you a receipt back for cash.  It’s convenient, but they charge a 9.8% fee!  I tried to explain this to my friend, but when he worked out that it would amount to less than $2, it didn’t bother him.  It should have, because to earn $2 from investing $20 will take you a lot longer than the time it takes to run your change through a sorting machine.  On the East coast, go to a TD Bank location with a Penny Arcade machine and sort that change for free.  Just go here and check for locations that say Penny Arcade.  You don’t have to bank there to use their machines.  Or, if you do go to a CoinStar machine for both you West and East coasters, and everything in between, load up a gift card at participating stores, like iTunes and Amazon, and pay no fees.  And really, is there anything you could possibly want that Amazon doesn’t sell?  Think about it…

These are too cute not to share.  The Center for Responsible Lending created these adorable characters like the Wall Street Monster pictured for a bit they call “What’s So Scary About Financial Reform?”  They concisely describe all the major bad guys in finance from one-eyed regulators to credit card fine print charges - complete with cool cartoons, all in a format even the most financially illiterate young broke and fabber should be familiar with - trading cards!  
This while a democratic Senator, Ben Nelson, voted for the second time in as many days with Republicans to block the financial overhaul bill from moving forward on the floor.  He swears his reported $6 million holding in Berkshire Hathaway stock, which would be negatively impacted by the new legislation on derivatives, has nothing to do with it though.  

These are too cute not to share.  The Center for Responsible Lending created these adorable characters like the Wall Street Monster pictured for a bit they call “What’s So Scary About Financial Reform?”  They concisely describe all the major bad guys in finance from one-eyed regulators to credit card fine print charges - complete with cool cartoons, all in a format even the most financially illiterate young broke and fabber should be familiar with - trading cards!  

This while a democratic Senator, Ben Nelson, voted for the second time in as many days with Republicans to block the financial overhaul bill from moving forward on the floor.  He swears his reported $6 million holding in Berkshire Hathaway stock, which would be negatively impacted by the new legislation on derivatives, has nothing to do with it though.  

Your tax refund - an easy way to save

So it’s tax time again and the young broke and fabulous are eagerly anticipating tax refunds. The average tax return for tax year 2008 was $2683, which is a little high actually. The government doesn’t just give you a present every April because you’re special. That’s your money that you overpaid. That’s why they call it a refund. It’s like you went to a store last year and paid $1000 for a pack of gum. Fast forward a year and Rite Aid sends you a check for $999. Then you get all excited thinking about all the things you’ve always wanted but couldn’t afford. Now if you had paid the right price initially, you never would have given that money up and hence, would have had it all along.

Here’s the thing though. Given that the young, broke, and fabulous have a pretty dismal track record when it comes to saving, the overpaid taxes / refund cycle could be used as a sort of sweet forced savings program. And with most money market and savings accounts earning interest rates near 0, loaning your money to the government at 0% isn’t as much of a ripoff as it used to be.

Now, given that most of us overpay, people are aware of the expected inflow and they make plans well in advance for how they will spend their refund checks. And oftentimes those plans involve wasteful or extravagent things people wouldn’t do with their regular paychecks. But that is still your hard earned money. It’s not lottery winnings. It’s money that you worked just as hard as you did for your regular paycheck. I will concede that it’s money you weren’t really expecting or didn’t need to get by. So, if that’s the case, why not save half? Use half of it for something fun or something you’ve wanted to do and use the other half to jumpstart your savings. Or, if you’re ready to get serious about saving, why not save the whole bloody thing? And if you’re convinced you need the entire refund for yourself… please, please, please do me and youself a favor… Put at least 5 on it. That’s all I’m asking. You can do that, can’t you?

Unfortunately, you have to pay taxes on your income throughout the year, but you can adjust them to pay less, especially if you routinely get big refunds. Talk to payroll or an HR person at your work to figure out how to change your withholding so your paychecks are bigger and your refund is smaller.  Then, you can save the difference between what you’ve been earning and what you will earn after reducing your withholding.

One way or the other, you are able to save something either through regular payroll deductions or in a lump sum at the end of the year. Just put 5 on it. Check this previous post on some places where you can save money easily and earn interest.

This from the Consumerist blog... Every year they do a Worst Company in America (WCIA) contest as decided by readers.  Last year the winner was AIG, who was awarded a trophy of golden poo.  The finalists this year include Toyota, Citibank (my personal favorite or least favorite or you know what I mean), and GM, who are now all battling it out in some March Madness.  I don’t want to tip anyone off, but I’d say Toyota stands a pretty solid chance at this one.  To follow the full contest and developments, go here.

This from the Consumerist blog... Every year they do a Worst Company in America (WCIA) contest as decided by readers.  Last year the winner was AIG, who was awarded a trophy of golden poo.  The finalists this year include Toyota, Citibank (my personal favorite or least favorite or you know what I mean), and GM, who are now all battling it out in some March Madness.  I don’t want to tip anyone off, but I’d say Toyota stands a pretty solid chance at this one.  To follow the full contest and developments, go here.

Words like “consumer” and “reform” make Republicans collicy

  Besides sharing funny voicemails from douchebags, another reason I wanted to start a blog was to inform the young, broke and fabulous on financial policy and its repercussions.  Financial policy drives a lot in this country from who is taxed on what to how much protection consumers have from the abusive practices of companies like banks and brokerages.  And it’s hard to be outraged about proposed changes when we don’t understand what the hell these guys are talking about.  So here’s why Senator Dodd’s financial overhaul proposal Monday matters to you.  And it does, believe me. 

Some type of financial reform was badly needed and this proposal definitely lays the groundwork for an improved, sound financial system.  The fate of this proposal is still uncertain since all democrats and at least one republican would have to vote for it to block a filibuster.  The latest news is that bills crafted by House and Senate are asking for endless studies so that lawmakers can learn about finance before enacting legislation.  This would delay action on the proposal for over 2 years in some cases, but here are the main points anyway:

New Consumer Financial Protection Bureau:  The most closely watched and interesting development is the creation of the new Consumer Financial Protection Bureau, which is a considerable downgrade from the originally proposed agency favored by consumer advocates.  The agency concept would have made this a separate and independent council whose only goal was to protect consumers from fine print, fees, and deceptive information in the marketing of financial products.  Instead, it will be housed as a bureau within the Federal Reserve, which will now also be responsible for controlling the ENTIRE world, er I mean - only bank and thrift companies with assets over $50 billion including banks, bank holding companies, investment banks, hedge funds, credit card issuers, and mortgage lenders to name a few.

Some members of the existing Consumer Advisory Council operating within the Fed wrote a scathing letter to Dodd last week in which its members said they had warned both Alan Greenspan and Ben Bernanke (former and current chairmen) repeatedly over the years of “unfair and deceptive mortgage lending, overdraft fees, credit card abuses and a host of other consumer lending abuses” and were effectively ignored.  They went on to say that “it would be imprudent to give the Federal Reserve or any other existing agency primary consumer protection responsibilities.”  Dodd decided the members of the Consumer Advisory Council within the Fed couldn’t possibly know anything about creating a consumer-oriented bureau at the Fed, and tried to calm everybody down by using the word “independent” a lot when describing the balless bureau he is forging ahead with.  At the end of the day, the Fed will essentially have veto power over the rules this bureau comes up with, which makes it just a little hard for some of us to wrap our minds around how the same institution responsible for regulating companies could also be capable of protecting the consumers who are routinely screwed over by those very companies in the name of profit.

Nonetheless, rebublicans are mad pissed at the powers the bureau will have, even in its crippled state, and disagreements about it contributed to the breakdown in talks between republican senator Corker and Dodd last week. 

The takeaway is, well, yeah an agency or bureau dedicated to consumer protection is better than nothing, which is what we have now, but the inherent conflict of interest created by housing it at the Fed is disconcerting. 

Provisions would prevent institutions from being “too big to fail”: A number of safeguards would be put in place to make sure institutions are sound and don’t get too big to fail.

New Financial Stability Oversight Council: will monitor risks in financial system to prevent future meltdowns

New safeguards/ transparency for derivatives trading: (from the Senate committee summary) Over-the-counter derivatives are supposed to be contracts that protect businesses from risks, but they became a way for traders to make enormous bets with no regulatory oversight or rules and therefore exacerbated risks. Because the derivatives market was considered too big and too interconnected to fail, taxpayers had to foot the bill for Wall Street’s bad bets. Those bad bets linked thousands of traders, creating a web in which one default threatened to produce a chain of corporate and economic failures worldwide. These interconnected trades, coupled with the lack of transparency about who held what, made unwinding the “too big to fail” institutions more costly to taxpayers.  Under today’s proposal, common sense safeguards will protect taxpayers against the need for future bailouts and buffer the financial system from excessive risk-taking.

Leaves the door open on Volcker Rule which can be summed up by this statement from Paul Volcker, a former federal reserve chairman and leader of an economic advisory group: “We ought to have some very large institutions whose primary purpose is a kind of fiduciary responsibility to service consumers, individuals, businesses and governments by providing outlets for their money and by providing credit,” he said during one speech in Toronto. “They ought to be the core of the credit and financial system. Those institutions should not engage in highly risky entrepreneurial activity.”

More on Consumer Financial Protection Agency from Funny or Die skit featuring Will Ferrell, Jim Carrey, Dana Carvey, Chevy Chase, Dan Aykroyd.