This blog contains some simple tips and advice from two regular guys. We're not accountants, financial advisors, or brokers, so follow, ignore, or discuss our ideas as you see fit.

Sunday, December 7, 2008

Money For Your Old Cell Phone

Posted By Paul

A while back I heard of a web page that lets you trade in old cell phones and iPods for cash.

The page is:


Conveniently I had two old cell phones that were just sitting in my desk drawer collecting dust.

I went online and found out that I could get about $15 for both cell phones. I decided to give it a try.

I registered and traded in both phones. The registration was easy, and the trade in process consisted of a page where you told them the model of your phone and answered some basic questions about its condition. Based on that info they tell you how much they will give you for it.

Then it was an easy thing to print out a mailing label from their page. I taped the label on the envelope and dropped it in the mail.

It took about a month to go from dropping the envelope in the mail to actually getting my payout (I chose an option of getting Amazon store credit since I figured that would save me some time since I wouldn't have to wait for them to print and mail a check).

So I got rid of two cell phones I had no use for, and made about $15 (minus the cost of the envelope).

Overall the process was very cool. I received emails from flipswap when my phones were received and inspected. My only complaint is that once I got the "received and inspected" email I was not sure how to actually get my Amazon credit. I waited a week to see if I would receive an email gift certificate, but nothing. I was about to email their tech support when I discovered that by checking the status of my Flipswap trade I could see an Amazon gift certificate code that gave me my credit.

In addition to cash or Amazon credit you can also choose to donate your money to charity.

Some phones don't have enough resale value to justify a payout and those only give you the 'plant a tree' option where Flipswap recycles the phone and plants a tree.

Overall I would highly recommend Flipswap. Instead of having your old phones sit in a drawer you can trade them in for cash or at the very least recycle them.

Wednesday, December 3, 2008

Article: Beware of free financial advice.

Posted By Paul

Great article today on some of the things to watch out for when considering financial planners.

First some excerpts that I found interesting:

"Your bank may be very good and you may even play golf with your banker. Make no mistake that a bank is also in business to make money. So if your bank is giving investment advice, you can be pretty sure there is something in it for them. They may not charge you by the hour but they are making money nonetheless." -and- "What I consider to be abuses fall under two categories:

First, there are the expensive mutual funds with front-end or back-end loads. These pay handsome commissions to the banks and, of course, have a great track record of under performing no-load mutual funds.

Second, there are the ever-popular permanent insurance policies that come in flavors such as whole life, variable annuities and universal life. These are even bigger cash cows to the banks that partner to sell them."

Here is the full article:
Beware of free financial advice

To add a little advice of my own:

I have heard people say that their financial planners are great, and best of all, they work for free. This reminds me of an earlier post:

Know Their Agenda: Some great advice I got.

The short version: OF COURSE they aren't working for free, the question is HOW are they getting paid.

I think that the most common way that financial advisers make their money is by recommending funds that have loads and fees associated with them.

What bothers me is that it is SO easy to check mutual funds to see if their fees are excessive or not.

I don't think there's anything wrong with having an adviser, knowing that you are paying them through mutual fund fees, and being okay with that. I just worry that people out there think that somehow the adviser really is working for free.

If you have an adviser that you think is working "for free" then you might want to take a look at the following articles:

A Few Quick Tips On Mutual Funds

What are you really paying for advice?

Paying an adviser doesn't mean you are getting swindled, but paying an adviser AND NOT KNOWING IT seems like a bad idea all around.

Tuesday, December 2, 2008

No money down, no interest, NO WAY

Posted by Matt

Let me share a brief story about a family member who asked me for input on the purchase of a new laptop computer. She found a no down payment, no interest deal from a major electronics store in our area and wanted to know if I thought it was a good deal. I checked it out and it was a nice machine for a great price, but I had to take issue with the deferred payment plan.

First of all, I couldn't determine the exact rules of the deal, even after reading the fine print. The ad banner said no interest, but sometimes this actually means "no interest if you pay the debt off by a set deadline, otherwise a ridiculously high interest rate is retroactively applied for the interval between the purchase date and the deadline." I'm paraphrasing here.

I asked "If you don't have the money to buy the computer right now, but you think you'll have it by the deadline, why not wait and save up?" The answer was along the lines of "why wait, when I can have it right now?" I could only caution about unexpected financial emergencies.

My wife Leah added a final argument against the deferred payment plan that she heard about when listening to Clark Howard on the radio: they can drag down your credit score! If you're not familiar with credit scores, one of the big criteria used is how much credit a person is using compared to how much they have available, and deferred payment plans show up as accounts with 100% utilization (aka "maxed out"). Clark warns:
You may find you'll get higher interest rates when insurers check credit scores or even lose job offers if employers check scores.
Ideally, I think people should keep cash on hand in savings accounts for purchases like these. I'd even consider taking money out of an emergency savings account for an expense like this (rather than a deferred payment plan), as long as the withdrawal would be a relatively small in comparison to the savings balance and I felt I would be able to replace it quickly.

I also encouraged my family member to consider what other options were available. I suggested that she share her spouse's laptop for a while, start saving, and watch for even better sales after the holidays. I think she is going to give this a shot and who knows, sharing a laptop might end up being the best solution for the long term.

If you find yourself contemplating a deferred payment plan, ask yourself these three questions:
  1. Do I have to make this purchase right now?
  2. Is it worth the extra financial risk and the negative effect on my credit score?
  3. Do I have any better options?

If you ask me, the answer to #3 is always yes.