Open Enrollment Season

Health insurance open enrollment is here again, and once again, it looks like costs are going up – we’re currently with PPO, but facing a 10% increase in costs, I’m actually considering switching us over to a HMO.

Depending on your situation, you’ll need to carefully weigh your options and consider the following:

1. Don’t go on autopilot.  Assuming your plan and coverage will stay the same is a mistake (and I’m guilty!). It’s important to research and be informed of all new changes, possible price increases, and coverage. Oftentimes, monthly premiums, prescriptions, office visits, and co-pays will vary from year to year.

2. Any upcoming changes in the planned year?  While all plans do allow for changes to be made during life events, such as marriage, a new birth, death, etc, if you are aware of something upcoming, such as a pregnancy in the next year, you may want to consider upgrading your plan to a higher premium that covers more doctors visits or prescriptions, and combining that with a HSA.

Will you need a surgery next year? Many healthcare websites, such as UnitedHealthcare.com, have a online cost estimator for several hundred medical procedures. If you know that you will need hip replacement next year, you’ll be able to search and compare different prices for an idea of how different costs may total up. You can then plan how to contribute to your HSA, as well as working work your doctor and their hospital affiliation in advance to finalize a cost. You may even be able to negotiate costs in advance and ensure reimbursement prior to having the surgery done, making it a much smoother and painless process for everyone involved.

3. Is there a possibility of being laid off next year?  While most employees and employers agree that the economy is improving, there is still a chance for layoffs to take place if the economy does not continue improving at a faster pace. If you think there is a possibility that your position may be cut next year, look for the least costly plan. Since COBRA premiums are based on your current policy, having a lower cost policy will reduce the total premium due to keep you insured during unemployment.

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Dividend stock love

I’ve fallen in love with dividend stocks – I don’t know why, but I’ve never paid much attention to them and have always just focused on long-term gain. How short-sighted of me though! Several months ago, my co-worker was talking about his father living solely off of dividend income for the past ten years. He has only begun tapping into social security and 401k. It took me a few minutes to absorb, and my first reaction was “That’s crazy! How many millions does he have invested?!”

But upon second thought, it’s not that crazy. Assuming a 4% quarterly return (a reasonably conservative estimate), to bring in $5,000/mo ($15k/quarter), you would need to have $375,000 invested. Broken out over 20 years worth of saving, that would be slightly over $1500/month to save. Even if you could manage to put aside $500/month, after 20 years, your dividends would be bringing in a cool $1600/mo, not to mention what they would be earning you during this time! If you just reinvested those earnings, it would increase that much more. This is so motivating.

I have a work 401k which is pretty much on autopilot, but I plan on monitoring that much more closely in the future. We have a separate stock account that we purchased random stocks (read: trendy and overpriced). Throughout the past few years, I’ve managed to pick up a few dividend stocks, and while they haven’t done amazingly well in terms of growth, dividends have generated on average of 5-10% on average for the past few years.

What are your thoughts on dividend stocks?

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I’m back!

It’s been a while since I’ve been here, and boy, have I missed it!  Since the last post, we bought a house, remodeled, moved, started an MBA program, dropped out of an MBA program, hubs sold his business and is trying to start a new one, and I started a new job. Whew!

We stumbled upon the house unexpectedly… we both love real estate and cruise Redfin.com frequently – one Sunday while going through the real estate section of the paper, I saw a house in a great area that had been on and off the market for a while that had been relisted. Altogether, it had been on the market for nearly 6 months… and this time it was back on, but with a huge price drop. We weren’t ready to really begin looking, after all, we still had 7 months to go on the existing lease.  But for whatever reason, there was something in the air that Sunday, we were dizzy from not having had breakfast yet, etc, we spontaneously decided to call the realtor. He picked up on the 2nd ring, and we had an appointment to see the house in an hour. We went into the house, and the area was much nicer than we had expected – lovely mature trees, quiet, and great school district. We went back to the realtor’s office, made an offer, and went into escrow the next day.

The loan process was excruciating. I wanted to give up several times. We have 700+ credit scores, stable employment, tax returns, finances in order, etc. We didn’t have enough for 20% down, but we knew we were selling his business and would be able to refi at a later date, so we went with FHA. And with that, it still took 3 months to be approved. Luckily, our loan broker was great to work with and kept us informed during the entire process.

More a bit later – so glad to be back!

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Is an MBA worth it?

I’ve been kicking around this question for myself, which is ironic, because if someone asked me if I thought it was worth it, my typical immediate response is “depends.” But as I’ve become more and more involved in hiring the past few years, I’ve realized a couple things:

  1. Your experience, personality, and attitude will take you way farther than a MBA will

–         MBA may get you in the door but won’t keep you safe unless you can perform

2. Unless you have an MBA from a top school, no one cares

3. We don’t want high level MBAs unless we’re hiring for the “wow” factor (to impress the client, for an executive level position that we’re going to use to market with, etc)

A full-time MBA program can easily cost you $80 – 100k and 2 years of precious earning power.  Assuming an average salary for those entering a graduate program of $70k, that is $140k over 2 years, plus benefits, 401k matches, etc.   Medical and other fringe benefits run approximately 30-40% of your base salary, and companies typically offer about 4-6% match on 401ks. Assuming an 8% 401k deduction with 4% company match on a $70k salary, comes to $8,400 per annum.

Benefits (though not included in the salary you receive, are still benefits to you and should be considered as such) add another $24,500 on top of that – so add those together for the 2 years and the costs for attending a full-time MBA program roughly $205k.

Then there’s the time it takes to actually pay off and earn a return on your investment. This article from Newsweek states that MBA grads average about $75k, with only 4% exceeding the $150k mark. PoetsandQuants is now reporting that elite MBA’ers from schools such as Stanford and Harvard take about 10 years or so to recoup the costs of their MBA, with Columbia coming in last of the top 10 at 12.8 years.  If those aren’t dire stats, then I don’t know what is.

So my final determination?  I’m still clueless.  We’ll see.

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My version of extreme couponing

My latest scheme to save money has to do with one of my favorite things, shopping! I realized that I could buy a gift certificate for less than face value from a site like PlasticJungle.com or Giftcardrescue.com, and use it on a site that also gives me cashback!

So my latest deal was:

1. I went onto PlasticJungle.com and found a giftcard for Ann Taylor worth $300 for $255, 15% off

2. Then I log onto Fatwallet.com for the 3% cashback on all purchases

Every quarter or so, they will have a 40% off sitewide sale, which is pretty great – combining all the coupons means I can actually save 58% on all purchases, and they offer free shipping on any purchases over $150!

I feel like this opens up a whole new world of savings, and it’s so exciting!

Of Another Fashion, Another Era

I’ve always loved vintage photos, and I stumbled upon this amazing blog, Of Another Fashion, that has vintage photos of “not-quite-hidden but too often ignored fashion histories of U.S. women of color”, along with personal stories. There’s an interesting and subtle message in the trends of their clothes and updos, and I love looking at this – it always leaves me feeling bittersweet and nostalgic, and like I am gaining a better understanding (or realizing just how much I don’t know!) about history and our past.

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In Southern California real estate, 4 is a negative number

From the LA Times:

Did you know that in Southern California (and I am sure this holds true for any asian buyers out there), that having a number “4”in your address is bad, terrible, horrible luck?  “4” sounds like death in Mandarin, Cantonese, Taiwanese, Japanese, and several other languages.

Having an address with 4’s in it can cause your house to sit on the market for months, even if it’s in a hot area, like Arcadia or San Marino, many buyers will not even consider viewing your property. Numbers like “8”, and “168” are good luck, and those houses often sell for asking, if not over.  Asian culture is very superstitious, and if you are in any sort of sales, it’s always a good tip to know in case you deal with them.

This story cites an example of where a house was appraised at $1.4 million, and because there were two 4’s in the address, it could potentially knock $300,000 to $400,000 off the property.  And it’s true – having been in real estate for a short stint, I knew hot to even bother showing the houses with too many bad numbers to my clients, unless they were more Americanized or specifically told me they didn’t care.

So, if your home has the poor fortune of having one too many “4s” in its address, the city of Arcadia now proposes a solution for you – you can pay to have the house number changed, which would hopefully lead to better luck and later, resale value.  I think it’s a smart way to close the budget gap, if there is one, and if it creates multiple offers, why not?

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Extreme Couponing…too extreme?

I’ve been watching this show religiously since its premiere, and while I happily admit I’m obsessed and daydream about getting deals like these people do, (I told hubby that for my bday, I wanted to do one shopping trip and save what they do), I don’t know realistic their purchases really are.

In the Sunday papers, the coupons I get are mostly for non-perishable items – drugstore items, personal care/hygiene, makeup, canned goods, etc.  Those, potentially stacked with a sale, store coupon, and manufacturer’s coupon, I understand.  Easy to figure out how to save 30-60% or more on the item.  I was wandering around Vons last week with a ton of coupons in hand, when I suddenly remembered that I needed to pick up some carrots, and realized that not only had I never seen any coupons for produce, but I hardly see the Extreme Couponing people buy fresh food.

It seems strange, but it does make sense.  You don’t need to offer coupons and other incentives to purchase fresh food, it’s a necessity. How often have you seen milk go on sale or a huge coupon offered? And they’re all so proud of their stockpile, but I don’t think that at this point in my life (or ever), would I need to have 100 tubes of toothpaste or bags of cat food treats (when they don’t even have a cat).  And what is their ultimate intention for their stockpile?  There was a set of twins from Chicago, one of whom had a huge stockpile of babywipes or diapers.  Absolutely huge pile.  But she doesn’t have any kids yet.

I admire that they are saving so much money and are genius at finding these deals, but I don’t like being wasteful about buying items I don’t need or unhealthy foods, even if they’re free. I did like the one where the guy purchased everything and donated it though, that would be fun to try. Overall, I think I’m going to shoot for 40-50% off items we actually use, purchased on an as-needed basis or maybe stocked up only a little bit if a great deal, and go from there.

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Bethenny Frankel taking on the world

I’ve been watching Bethenny Frankel ever since I first saw her on Real Housewives of New York – she was spunky, ambitious, and most important of all, real, unlike so many of the other housewives on these shows.  In the beginning, she was a organic food chef marketing her brand, “Skinnygirl”, and she’s since expanded upon that, into her own show, books, and started her own line of margaritas.

Whether you love her or hate her, you have to admit, she has built herself into a successful brand, outranking even J. Lo in just a few short years, and should be applauded for it.  She’s started several businesses and failed (BethennyBakes, event planning, scarves), but it hasn’t stopped her from picking herself up and marching on.  I’m not as big a fan of Kim Kardashian, but I have to hand it to her as well, she’s done the same thing.

Up next for her is skincare, shotglasses, shapewear, diet pills, and who knows what else. Given that her margarita line was just sold for $100 M last week, it’s definitely inspiring me to get a move on!

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Why “Daily Deal” sites are not always really deals

I’m not a big fan of trying to save money using daily deal sites – they advertise their services to be 40% – 60% off, but are they really such great deals? Below are some reasons why they may not be so awesome:

1. Not really the % discount they claim. Keep in mind that even though it might say 50% off, it may have been marked up to make it appear that there is a higher discount.

2.  Will the business still be around for you to use the coupon? Many companies that offer daily deals are “mom and pop” (which was originally Groupon’s intention to promote).  Having owned a small business myself, I can attest to how desperate things can become, and to what lengths we will go when offering deals or coupons, even when/if on the brink of shutting down. What options would you have if the business were to go under?  Can you go back to the daily deal site and ask for your money back?  Will they just issue you a credit and you have to buy something you didn’t really want?

3.  Will you actually use the coupon?  How many times have you had a great coupon and had every intention of using it, only to have things come up here and there, until you finally realized that the coupon was expired, or just didn’t have the energy to go use it?  Businesses count on a certain percentage of buyers to not use the pre-purchased coupon. Same economics goes for giftcards.

4. Pre-payment required.  I hate the idea of parting with my money before enjoying whatever it is I’m purchasing. I know that it doesn’t matter, I’ll still have to cough up the funds after, but something about paying for it beforehand doesn’t sit well with me. I have always been “anti” businesses that float cash as part of their business model.

5.  It may end up hurting the business more than helping.  I’m all for supporting small businesses over large corporations. One of my friends used one for his business – it turns out that the daily deal site not only takes 50%, but charges service fees on top of it, leaving my friend with only about 35%, which didn’t even cover the costs. On top of that, the phone was ringing off the hook, the customers were cheap and trying to lowball him on everything, and it turned out to be a bad experience, for him at least.  He said he will never do it again.

If you’re using them for a one-time experience or for a place your frequent, it’s not a bad idea. Just make sure you’re really going to go and use it before purchasing. Also, there’s such market saturation now, I think even Facebook is trying to get in on the action – I wonder if Groupon doesn’t regret, even a teeny, tiny bit, not selling to Google for $6 billion just a few short months ago.