Investing Archives - Page 4 of 8 - Personal Finance Digest

Investing in fine wine and fine art

July 25, 2013 By pfdigest

$150 FROM OPTIONSXPRESS, 20% OFF AT FEDEX: Maximizing Money points out that OptionsXpress is offering a $150 Amazon gift card if you put $1,000 in an account and make 10 trades within the first 90 days.

The same site also brought to my attention the fact that Amex is giving you 20% off at the FedEx Office store (formerly known as Kinko’s) now through August 31. You will need to sign your card(s) up here, and I have no idea if Fedex sells gift cards, maybe Chasing The Points knows?

Speaking of which, read about CTP’s experience with fraudulent gift cards here.

SAVEROCITY: Frequent Miler mentioned Saverocity in the same breath as mine in Tuesday’s post, and I have to say it’s a pretty good site. Check it out if you’re so inclined.

HOW TO INVEST IN WINE: MilesAbound has a great primer on investing in wine. I will file this under “Things I will never personally do, but it’s kind of cool to know about.” Why invest in wine, you ask?

Taking Cheval Blanc as an example, typically they will release about 6,500 cases per year. Every single year after that some of those cases will be opened and drunk and as time goes by the amount of that wine in supply decreases. As long as you stick to wines with the right level of consistent demand and staying power (more on that later) and is stored correctly (again, more later) then the wine itself is likely improving with age. So there is a natural increase in price both from dwindling supply and increasing scarcity and quality. And best of all, if it really does not work out financially – you can always drink it!

There’s much more here.

HOW TO INVEST IN HIGH END ART: Don’t. Quartz has an interesting article, the title of which, “High end art is one of the most manipulated markets in the world,” sums it up. There’s plenty of detail there about who’s manipulating prices, how they do it, and why, but this story really caught my eye:

A few years ago a young art collector from New York I know bought a painting from a New York gallery. A few weeks later she went to the Miami Basel art fair where a celebrity heard about the painting. He offered to buy it for more than 50 times what she paid for it. She refused and he raised his offer to a sum that would mean she’d never have to work again. She explained that she would not bargain with him—any resale of the painting must go through the gallery, so they’ll get a commission and select the price—not her. The young collector knew there would be consequences to making the sale. She may have owned the painting, but reselling it at a profit without the gallery’s permission would blackball her from the art industry. To her, that was not worth the millions she was offered.

I would happily be blackballed from any industry for millions of dollars, but maybe that’s just me. As the title makes clear, manipulation primarily occurs at the high end. Your local galleries are presumably less corrupt:

Price manipulation occurs at the elite end of the primary market. There exists a lower tier art market, full of small unknown, local galleries outside of large urban areas where prices are listed, transactions occur at that price, and the work is sold to whomever wants to buy it off the street. These collectors buy art simply because they love the work but artists who sell at these types of galleries probably can’t support themselves selling their work.

The Finer Things Club approves of this post.

Microsoft Office for $10, the 1% savings boost, and Barclays tightens up

July 8, 2013 By pfdigest

MICROSOFT OFFICE FOR $9.95: Some of you may already be aware of this, but it’s possible for those with the right employers to get Microsoft Office for only $9.95. This is done via the Microsoft Home Use Program, wherein employees of companies that use Microsoft Office can get a version for their home computer on the cheap. To find out if you’re eligible, just enter your work email on the page linked above.

HOW MUCH WILL SAVING 1% MORE GET YOU?: A nice interactive graphic from the NYT on how much an additional 1% of savings adds up to over the years. (H/T: Barry Ritholtz)

$500 VISA GIFT CARDS TO RETURN AT OFFICE DEPOT: Chase Ink fans, get ready: the scuttlebutt is that $500 gift cards are returning to Office Depot. Though there is some talk on Flyertalk that they’ll only accept cash. This could turn out to be a YMMV situation, as with certain retailers who let you buy gift cards with gift cards. We’ll see…

RAPID TRAVEL CHAI’S APP-O-RAMA: It’s often informative to read the results of somebody’s app-o-rama, especially if they’re applying for more cards than you’ve ever applied for at once. I therefore enjoyed seeing how Rapid Travel Chai did: 5 credit cards approved, 1 pending, 2 denied. The two denials were from Barclays, and the lesson:

In line with many recent reports, Barclays has gotten very tight and reconsideration would not budge. They were most concerned about overall number of recent accounts and want me to have a longer track record with existing Barclays accounts. Similar happened with my wife a month earlier for the Arrival even though she has only ever had one Barclays card, the US Airways, and that for a year. So I think it may be best early on to go for one big Barclays score like the 4 I got last Decemberand then let them cool for a year or more.

MORE ON MONEY AND HAPPINESS: The Economist has a review of Happy Money: The Science of Smarter Spending. In a nutshell:

This slim volume is packed with tips to help wage slaves as well as lottery winners get the most “happiness bang for your buck”. It seems most people would be better off if they could shorten their commutes to work, spend more time with friends and family and less of it watching television (something the average American spends a whopping two months a year doing, and is hardly jollier for it). Buying gifts or giving to charity is often more pleasurable than purchasing things for oneself, and luxuries are most enjoyable when they are consumed sparingly. This is apparently the reason McDonald’s restricts the availability of its popular McRib—a marketing gimmick that has turned the pork sandwich into an object of obsession.

I’ll second the television suggestion–I (mostly) gave it up a few years ago and I don’t miss it one bit. I say “mostly” because I’ll still watch live sporting events or catch up on TV shows via Netflix, but I’ve cut out aimless channel-surfing entirely.

I will never understand the McRib obsession, though. Those things–and I say this as somebody who actually likes McDonald’s hamburgers–are appalling.

Travel hacking vs extreme couponing, a stock for 78% off, and a creative way to lose your life savings

June 18, 2013 By pfdigest

WHY TRAVEL HACKING IS BETTER THAN COUPONING: I’ve tried out couponing before, but ultimately gave it up as I found the my time could better spent on working financial and travel deals. Naturally, I’m favorably disposed toward this article which echoes the sentiment:

In the end, very few people take the time to master the art of free travel or free groceries… but I can’t understand why you wouldn’t want to take the time for free travel. Extreme couponing gets you 5 gallons of toothpaste that will take up a room worth way more than the tooth paste. But with travel hacking, you can do very simple things to earn enough miles for first class flights on the finest airlines to exotic locations. Flights that are worth $20,000 can be had for next to nothing, if not nothing. Really, why wouldn’t you take the time to rack up at least a few hundred-thousand miles?
Seriously though, the same people who would rather just pay for a flight than take the time are missing out. I can’t say the same for cheez-its. You could pay $2.50 for cheez-its and save yourself an hour of scowering coupons. Right? But with travel hacking, an hour of research (or 10 minutes to simply email us), can get you a $1,000 flight to Europe.

Indeed! The hourly compensation for financial and travel activities is usually (though not always) better. I do keep my eyes open for the occasional awesome Slickdeal to take advantage of, though those have been far and few between lately. I’m always happy to pluck the low-hanging coupon fruit, such as that Target coupon that’s come out the last two Christmases, and to play off supermarkets against each other by going for their loss leaders each week, but in general bank and travel deals are more lucrative, and more fun.

Do any of you mess with couponing? Or are you all travel and credit cards, all the time?

SPEAKING OF COUPONS: How does 20% off everything you can fit in a bag at Staples sound? Valid through 6/22.

ASSETS ON THE CHEAP: Over at Oddball Stocks, Nate Tobik has found a company selling at 22 cents on the dollar:

The twist in this investment comes with Winmill, they own 222,644 shares of Bexil which at current prices is worth $11.187m. They also own 25% of Tuxis, which is worth about $400k. An interesting side note, Tuxis might be worth a look, they are trading at 18% of their 2007 book value. Both of Winmill’s public subsidiaries are worth $11.5m in total. Winmill’s own market cap is $3.045m, meaning they are trading for less than the value of their subsidiary stakes alone. The market is valuing their investment management business at less than zero. Winmill also historically had some cash and securities on their balance sheet, let’s call it $2m. Their historic liabilities were close to zero.

Read the whole analysis here.

THIS IS WHY WE HAVE BANKS: In a word, termites.

CHINA — A Chinese woman almost lost her life savings recently when termites invaded a wooden drawer in which she kept a plastic bag containing 400,000 yuan: the equivalent of $65,000 U.S. dollars.
It was only after the woman decided to redecorate her house in Guandong Province that she noticed the termites had dined on her nest egg. According to the Guangzhou Daily, the money was given to the woman by her children.
A local bank generously scanned the remaining cash and was able to identity 340,000 yuan which means the termite’s meal ultimately cost the woman roughly $9,786.

Mmmmm… cash.

I’ve got you covered for National Doughnut Day! Plus zero taxes and rising mortgage rates.

June 7, 2013 By pfdigest

Friday, June 7, is National Doughnut Day, which I’m pretty sure is just something concocted by the Doughnut Lobby to get us to buy more doughnuts, but whatever. I love doughnuts. Here are three free doughnut options for you on this most sacred of days:

Dunkin Donuts will give you a free doughnut with the purchase of a beverage.
If you don’t want to shell out for a beverage, no problem. Krispy Kreme will give you a doughnut absolutely free of charge, no purchase necessary.
You can also search here to see if any local bakeries are participating in National Doughnut Day.

Enjoy!

HOW TO PAY ZERO TAXES: I mentioned the Puerto Rico tax haven recently, but Forbes has some more great ideas:

– Look for companies paying dividends that qualify for the reduced tax rate. The category includes most U.S. corporations (but not real estate investment trusts) and a surprising number of foreign corporations.
– Claim the foreign tax credit. Example: The dividend yield on Total, the French oil company, is over 4% even after French withholding, which offsets your U.S. tax.
– Sell losers from your stock portfolio and let winners ride. Losses of up to $3,000 a year can shelter ordinary income.
–Defer Social Security and IRA distributions until age 70. Live off non-IRA assets.
– Once you pass 65, consider buying energy partnerships like Kinder Morgan and Enterprise Products. Their taxable income, low or nil in early years, rises sharply after a decade or two. But the deferred taxes are erased on inherited shares.

THE RATES THEY ARE A-RISIN’: 30-year fixed mortgage rates are the highest they’ve been in over a year, says Bloomberg:

Rates for a 30-year home loan rose to 3.91 percent in the week ended today, from 3.81 percent, McLean, Virginia-based Freddie Mac said in a statement. That’s up from 3.35 percent at the start of May as the Federal Reserve signaled to bond investors it may scale back the stimulus that had driven borrowing costs to record lows, amid signs of continuing improvement in housing and the U.S. economy. The 15-year rate has increased to 3.03 percent from 2.56 percent at the start of last month.
Bankrate Inc., an interest-rate aggregator, said today that the benchmark 30-year fixed mortgage rate has climbed to 4.1 percent, according to its weekly national survey.

The article suggests you might want to hurry up and conduct whatever real estate transaction you’re considering before rates go even higher:

“Have we seen the rock bottom for interest rates go past?” said Keith Gumbinger, vice president of HSH.com, a Riverdale, New Jersey-based mortgage information website. “That’s a pretty reasonable certainty. We are off the record lows. To get back to those record lows, we’d need to see a considerable slowdown in the economy.”

Maybe, though I’d stop short of calling it a reasonable certainty. After the turmoil of the past few weeks, it’s not hard to envision a scenario where the Japanese investment markets go to hell, likewise for Europe, and there’s a flight to (relative) safety as the dollar strengthens and interest rates get ridiculously low… for a short time, anyway. I’m not saying that’s going to happen, but it’s certainly possible. We shall see.

On a related note, John Mauldin thinks this is the year everything falls apart for Japan, and I’m inclined to agree. Take a look at his article and decide for yourself.

PAY-WHAT-YOU-CAN AT PANERA: I began today’s letter with doughnuts, and I’m ending with pastries. That’s the magic of National Doughnut Day. Panera’s been testing a pay-what-you-can model on certain menu items in certain markets, and here’s an interesting snipped from the WSJ’s interview with CEO Ron Shaich:

WSJ: You operate five pay-what-you-can stores. How do they work?
Mr. Shaich: Opening the first Panera Cares store was a roller coaster of an experience. People came up to me and began talking about the fact that they had been customers for 5-10 years and had lost their jobs. And how appreciated it was. There were occasionally people who tried to beat it, or game it. So ultimately it was a test of human nature.
This year we’ll service over 1 million people in these cafes. And 20% of customers leave more than the suggested donation, 60% leave the suggested donation, and 20% leave what they can, but often significantly less.

Good for them, and good for you guys for not abusing this! Let’s just hope this doesn’t get posted on Flyertalk or Slickdeals…

Investing in fine wine and fine art

Microsoft Office for $10, the 1% savings boost, and Barclays tightens up

Travel hacking vs extreme couponing, a stock for 78% off, and a creative way to lose your life savings

I’ve got you covered for National Doughnut Day! Plus zero taxes and rising mortgage rates.

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