Archives for June 2016

FreeCreditScore.com Review: Free Experian FICO Score, Credit Report, and Credit Monitoring

“The editorial content on this page is not provided by any of the companies mentioned, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author's alone.”

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The URL is suspiciously generic and raised my scam radar, but Experian-owned FreeCreditScore.com has been revamped to offer a pretty good package – a free FICO score, full credit report, and free credit monitoring based on your Experian credit report data. (Continue to be wary of other less-credible sites.) Like most of its competitors, “free” means that you agree to let them market products to you based on your personal information. This post provides additional details regarding this service.

FICO Score details.

  • FICO Score version: FICO Score 8, or FICO 08. This is the most widely used of the many FICO flavors. Score version is directly shown on the website.
  • Credit bureau: Experian
  • Update frequency: Every 30 days or when you log in, whichever is longer.
  • Limitations: Available to everyone. No specific credit card required.

How to get your score. Here’s a preview of the application and approval process:

  1. You must provide personal information, including Social Security Number. Name, address, etc. This is required for any service that checks your credit score.
  2. You must agree to their Privacy Policy and Ad Targeting Policy. Basically, they will give your free access to your credit score and other credit information, and they will also collect personal information to market products and other services to you. Your information may also be shared with their affiliates.
  3. Identity verification questions. They will ask you some multiple choice questions based on your Experian credit report data in order to verify your identity. If you don’t pass this quiz, I would go over to AnnualCreditReport.com and get a copy of your report to scan for errors.
  4. Set your personal security questions. At this point, you are approved. You just need to set up the standard security questions like “Who was your 2nd grade teacher?”

What kind of information do you get? The score model is FICO Score 8, based on your Experian credit report. This is the same score model and credit bureau offered by American Express and CreditScoreCard by Discover, and is within a few points for me (the check dates are slightly off). The other two major bureaus are TransUnion and Equifax.

The major difference is that FreeCreditScore.com offers your full Experian credit report and ongoing credit monitoring of your Experian credit data. This includes any new credit inquiries, new accounts, pubic records, fraud alerts, and other personal information updates to your Experian credit report.

How often is it updated? As often as every 30 days, but only if you log in to the website. Many sites operate this way, as it reduces their costs of grabbing your score if you are no longer interested. Also, they want you to log in so that they can show you advertisements.

Screenshots. Here’s a look at my sign-up process and account page:

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Bottom line. Experian owns FreeCreditScore.com and has jumped in fully into the “free score for showing you ads” business model. As they aren’t a credit card issuer, they can feel free to open it up to everyone. They offer the full Experian package of free FICO score, full credit report, and free credit monitoring based on your Experian credit report data. Most other Experian-based providers only offer one out of these three.

There are a lot of options out there now, but if you wanted to cover the other two bureaus efficiently, consider that CreditKarma.com offers free weekly updates of both your TransUnion and Equifax credit report factors in one site. You also get free weekly non-FICO credit scores and free automatic, daily TransUnion credit monitoring.

Related: Here are major credit card issuers with free FICO programs:

Fundrise Income eREIT Review

“The editorial content on this page is not provided by any of the companies mentioned, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author's alone.”

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Updated with Q2 2016 performance results. My second real estate crowdfunding investment is $2,000 into the Fundrise Income eREIT. (REIT = Real Estate Investment Trust.) Their investment claim is being the “first ever low-fee, diversified commercial real estate investment available directly online to anyone in the United States, no matter their net worth.”

Fundrise is one of the first real estate companies taking advantage of the recent JOBS Act that allow certain crowdfunding investments to be offered to everyone, as previously it was limited only to accredited investors. You must be a US resident and your investment cannot exceed the greater of 10% of your gross annual income or net worth.

Here’s a quick overview of the features:

  • Low investment minimum ($1,000)
  • Quarterly cash distributions
  • Quarterly liquidity (you can request to sell shares quarterly, but liquidity is not always guaranteed)
  • Low Fees (claimed to be roughly 1/10th the fees of similar non-traded REITs). Until Dec 31, 2017, you pay $0 in asset management fees unless you earn a 15% annualized return.
  • Transparency (you get to see exactly what properties are held)

Essentially, instead of investing in a single condo building, I am now putting my money into a pot of money that will invest in a basket of different commercial real estate properties.

Why not just invest in the Vanguard REIT index fund? Well, I happen to think most everyone should invest in VNQ if they want commercial real estate exposure. I own a lot more of VNQ than this Fundrise investment. VNQ invests in publicly-traded REITs, huge companies worth up to tens of billions of dollars. VNQ offers wide diversification and you have daily liquidity. But as publicly-traded REITs have grown in popularity (and price), their income yields have gone down.

As with other crowdfunding sites, Fundrise deals with specific, smaller deals with (hopefully) higher risk-adjusted returns. This eREIT diversifies your money across multiple properties, but we’re still talking examples like a $2 million townhouse complex, or a $2 million boutique hotel. An analogy might be made with “micro-cap” investing. From their FAQ:

Specifically, we believe the market for smaller real estate transactions (“small balance commercial market or SBC”) is underserved by conventional capital sources and that lending in the market is fragmented, reducing the availability and overall efficiency for real estate owners raising funds. This inefficiency and fragmentation of the SBC market has resulted in a relatively favorable pricing dynamic which the eREIT intends to capitalize on using efficiencies created through our technology platform.

A positive feature is the ability to request liquidity on a quarterly basis, but it is not guaranteed that you can withdraw all that you request (similar to some hedge funds). Here’s a comparison chart taken from the Fundrise site:

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Why Fundrise? It can be hard to differentiate between the various crowdfunding websites. One way that I feel that Fundrise differs is they are more picky about the deals they choose to fund. Talk about higher standards is one thing, but I’ve been tracking them for a while and Fundrise really does offer far fewer deals than the other competitor sites I have signed up with. For about a year now, every deal that I’d been interested in filled up within 24 hours. Even this eREIT had a waitlist. Will this selectivity last? I don’t know, I hope so. Will their selectivity produce higher, safer returns? I don’t know, I hope so.

Dividend income updates.

  • 1st Quarter 2016. 4.5% annualized dividend was announced. This is the first complete quarter of activity, so the dividend size is expected to increase once funds are fully invested. The portfolio included 13 commercial real estate assets from 8 different metropolitan areas, with approximately $31.5 million committed as of March 31, 2016.
  • 2nd Quarter 2016. 10% annualized dividend announced, to be paid mid-July. Portfolio now includes 15 assets totaling roughly $47.25M in committed capital.

Screenshot from my account:

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I think the Fundrise Income eREIT is an interesting concept. There may be a waitlist to join, but they do work through it. I am simply sharing my own results, not making an investment recommendation as I don’t know your situation. This is a higher-risk, speculative investment.

JetBlue Will Match Virgin America Points For Potential $1,000 Airfare Value

“The editorial content on this page is not provided by any of the companies mentioned, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author's alone.”

jetblueva0Earlier this year, JetBlue wanted to merge with Virgin America, but Alaska Airlines ended up winning the bidding war. Now they are just fighting over potential customers, which means some interesting things for us!

The newest promotion offers to match your Virgin America Elevate points subject to certain conditions:

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How good is this deal? If you have 50,001 Virgin America points and fly one roundtrip on JetBlue by 8/31, you can get 75,000 free JetBlue points. 75,000 JetBlue points will vary in value, but a reasonable estimate is $1,050 in airfare. This is based on 1.4 cents per JetBlue point as calculated in my JetBlue credit card review. Assuming you live near a JetBlue-served airport, a roundtrip will cost a minimum of $68 to $200. Therefore, there is a lot of room for “profit” on this deal.

Additional details:

  • Elevate® members must email a screenshot of their account dashboard to [email protected] by 7/4/2016. Screenshots must include first name, last name, and points balance. Please include your TrueBlue number in the email. If you are not a TrueBlue member yet, sign up now.
  • Once we assess your balance and eligibility, we’ll email you to let you know if you’re officially registered for the promotion.
  • Then book and fly one roundtrip JetBlue flight by 08/31/16.

How do I get Virgin America Elevate points?

  • You might already have some from being a Virgin America customer.
  • You can transfer Starwood Preferred Guest points on a 1:1 basis. If you transfer a minimum of 20,000 points, you’ll get 25,000 Virgin Elevate points. Thus, if transfer 40,001 SPG points, that would give you exactly 50,001 Virgin Points.
  • You can transfer Citi ThankYou points on a 2:1 basis. So 10,000 Citi ThankYou points would be 5,000 Virgin Elevate points.
  • You can transfer American Express Membership Rewards points on a 2:1 basis. So 10,000 AmEx MR points would be 5,000 Virgin Elevate points.

Reality check. This is possibly a great deal for a net “profit” of $900+ of free JetBlue airfare, but there are a lot of moving parts:

  • You’ll need a plan to get 50,001 Virgin points. Are you willing to give up 40,001 SPG Starpoints to get there? This isn’t a big hurdle, considering that you can simply buy 30,000 Starpoints per account for $735 right now, and you can combine Starpoints from multiple accounts.
  • You’ll need to have a plan to redeem those Virgin America Elevate points, so hopefully you live next to an airport served by Virgin America or partner airline like Hawaiian and want to fly somewhere on their route map. If you’re patient, Alaska Airlines. Based on previous calculations, 50,000 Virgin America points can buy roughly $800 to $1,300 in airfare. Virgin America route map.
  • You’ll need a plan to redeem those JetBlue points, so you should also live near an airport served by JetBlue and want to fly somewhere on their route map. Again, 75,000 JetBlue points is worth roughly $1,050 in economy airfare. JetBlue route map.
  • You’ll need to buy a roundtrip ticket on JetBlue and complete your flight by August 31st. Fares start at a little under $100. Some people will just do a “mileage run” and effectively spend a day flying around in a circle to qualify. If you needed to fly anyway, that would be even better.

Brexit

“The editorial content on this page is not provided by any of the companies mentioned, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author's alone.”

ukflag2A few of you are waiting for me to talk about Brexit. Part of me is honored that you care about my opinion. The other part of me is appalled that you care about my opinion. Why would you listen to me?!? 😉 Here goes:

  • I don’t know what’s going to happen.
  • Nobody else knows what’s going to happen.
  • The media makes money when it speculates on what is going to happen and you pay attention to them. So they will continue to speculate.
  • Whatever does happen will takes years to unravel at the minimum. That means a lot of uncertainty for a long time. If you sell during times of uncertainty and buy during times of relative calm, you’ll likely be selling low and buying high. Not a very good recipe for investing success.
  • If you are truly a long-term investor, then you must know that some crazy things are bound to happen over long periods of time.
  • You could see this event as another “stress test” of your plan. The United States also has a big election coming up this year, so you should prepare for even more uncertainty.

Overall, I am not making any changes to my investment plan. Instead, I would try to maintain focus on what you can control. Financially, that means:

  • Investing in yourself, your skills, your network, your career.
  • Track and/or control your household spending.
  • Shore up your cash cushion, emergency fund, whatever you want to call it.
  • Managing your investment expenses, including trading costs, management fees, and taxes.

Costco Members: Free Sam’s Club Access Through July 4th

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samslogoSam’s Club must be tired of Costco getting all this free publicity from them switching from American Express to Visa. Their Twitter account just announced that showing your Costco Membership card will get you a free day pass to any Sam’s Club location through July 4th, 2016.

They really want you to know that Sam’s Club accepts all major credit cards including Visa, Mastercard, American Express, and Discover. (Of course, you know that Costco negotiated some really low credit card processing fees from Visa, so hopefully that results in lower prices.)

I’m a Costco regular myself, but Sam’s Club does offer a different selection and I like to visit them from time to time. For example, back in the Spring I bought a large amount of organic gardening soil at Sam’s for a good price, while the same weekend Costco had no soil of any type available at all.

Index Funds: The Movie

“The editorial content on this page is not provided by any of the companies mentioned, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author's alone.”

ifabookHave you been unsuccessfully searching Netflix for a 72-minute documentary about index funds? Well, your wait is finally over. Game of Thrones, watch your back! 🙂

Also adapted from a book of the same title, Index Funds: The 12-Step Recovery Program for Active Investors systematically attacks the various reasons that people approach individual stock-picking and/or paying for actively-managed mutual funds. For example, there is the idea of picking an all-star manager, the idea of market timing, and the idea of picking individual stocks.

I would warn that content is targeted more towards investors with some experience and less towards novices. They apparently also recognized that the material can be rather dense, and thus also broke it up into 12 parts. Here is Part 1:

Both the book and film were created by Mark Hebner of Index Fund Advisors (IFA), a fee-only wealth management firm that offers mutual funds from Dimensional Fund Advisors (DFA). Found via co-producer Robin Powell. As the book promotes the purchase of DFA funds, which can only be bought through affiliated advisors such as IFA, the material can be seen as self-promotional. However, having read the original book 10 years ago, I did not feel that the content was overly self-promotional. If you focus on the academic research by Nobel Laureates and historical data presented, there is a lot of useful knowledge to be gained.

If you’re interested in more detail, you can buy a physical copy for $8 at Amazon, a Kindle eBook version for $3, or you can navigate through all the content online at IFA.com for free.

Top 5 Retirement Savings Tips from John Oliver

“The editorial content on this page is not provided by any of the companies mentioned, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author's alone.”

John Oliver again tackled personal finance on his HBO show Last Week Tonight, this time exploring retirement savings. (He previously covered credit reports.) Here is the full video link, embedded below:

It is truly hard to present this stuff in an entertaining manner, so I was interested to see how they would approach things and who’d they pick on. It’s not bad considering it runs 20 minutes – quite long for an internet video. If you skip to roughly the 17:55 mark, you’ll get the best bits – a satirical reply to widely-promoted Prudential commercials (one, two) and his top 5 retirement savings tips:

  1. Start saving now.
  2. Invest in low-cost index funds.
  3. Ask if your adviser is a fiduciary.
  4. As you get older, gradually switch some of your stocks into bonds.
  5. Keep your fees under 1%.

Nothing new to most financially-savvy folks, but hopefully it helps steer some people in the right direction.

BankAmericard Cash Rewards™ Credit Card Review: $100 Bonus, Preferred Rewards Bonus

“The editorial content on this page is not provided by any of the companies mentioned, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author's alone.”

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Updated. As of April 1st, 2017, the 2% cash back includes both grocery stores and wholesale clubs (up to 3.5% with Platinum Honors Preferred Rewards), with the spending cap raised to $2,500 in combined gas, grocery, and wholesale club purchases per quarter. This is a permanent (non-rotating) category addition that includes Costco, Sam’s Club, and BJs wholesale clubs.

The BankAmericard Cash Rewards™ Credit Card is the mainstream “cash back rewards” credit card branded by Bank of America. In this review, I’ll cover the basic card features but also focus on a lesser-known opportunity – if you’re a Preferred Rewards client, you can increase that bonus to 25% – 75%. For such “relationship” customers, the bonus can change this card from good to great. Read on for details.

Here are the highlights of this card:

  • No annual fee
  • $100 online cash rewards bonus after you spend at least $500 on purchases in the first 90 days of account opening
  • Earn 1% cash back on every purchase, 2% at grocery stores and wholesale clubs, and 3% on gas up to the first $2,500 in combined grocery/wholesale club/gas purchases each quarter
  • No changing categories and no expiration on rewards
  • 0% Introductory APR for 12 billing cycles for purchases AND for any balance transfers made in the first 60 days, then, 13.74% – 23.74% Variable APR. 3% fee (min $10) applies to balance transfers
  • Get a 10% customer bonus every time you redeem your cash back into a Bank of America® checking or savings account
  • If you’re a Preferred Rewards client, you can increase that bonus to 25% – 75%
  • See additional BankAmericard Cash Rewards™ Credit Card details

The Preferred Rewards program is designed to rewards clients with multiple account and higher assets located at Bank of America banking, Merrill Edge® online brokerage, and Merrill Lynch® investment accounts. Here is a partial table taken from their comparison chart (click to enlarge):

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Let’s consider the options. Bank of America’s interest rates on cash accounts tend to be lower than highest-available outside banks, so moving cash over to qualify may reduce your interest earnings. Merrill Lynch advisory accounts also usually come with management fees. However, if you have brokerage assets like mutual funds and ETFs, moving them over to Merrill Edge may actually reduce your costs because at the Platinum and Platinum Plus levels they will actually give you 30 to 100 free online stock trades every month.

I recently moved a little over $100k of brokerage assets (Vanguard funds) over to Merrill Edge to qualify for Platinum Honors. I realize not everyone will have this level of assets to move around, but if you do then it is worth considering. Also, I later realized that it will take a while for my “3-month average combined balance” to actually reach the $100k level and officially qualify for Platinum Honors. After that the 25% – 75% rewards bonus on credit card rewards kick in.

Cash Back Rewards Tiers for Preferred Rewards

Recall that the basic structure is “1/2/3”; you get 1% cash back on every purchase, 2% at grocery stores and wholesale clubs and 3% on gas for the first $2,500 in combined grocery/wholesale club/gas purchases each quarter (1/2/3). Here’s how the bonuses work out:

  • Platinum Honors 1.75/3.5/5.25: 1.75% cash back on every purchase, 3.5% at grocery stores and wholesale clubs, and 5.25% on gas for the first $2,500 in combined grocery/wholesale club/gas purchases each quarter.
  • Platinum 1.5/3/4.5: 1.5% cash back on every purchase, 3% at grocery stores and wholesale clubs, and 4.5% on gas for the first $2,500 in combined grocery/wholesale club/gas purchases each quarter.
  • Gold 1.25/2.5/3.75: 1.25% cash back on every purchase, 2.5% at grocery stores and wholesale clubs, and 3.75% on gas for the first $2,500 in combined grocery/wholesale club/gas purchases each quarter.

Note that the terms state “The Preferred Rewards bonus will replace the customer bonus you may already receive with the card.”, which I interpret to mean that you will lose the 10% bonus for redeeming your cash back into a Bank of America® checking or savings account.

Well, I wish my cable company would offer such nice “bundling” incentives, as now Bank of America has managed to convince me to go from only having a checking account with them to now also having a Merrill Edge brokerage account with 100 free trades per month and a new Bank of America credit card.

(Side note: Stack this offer with the separate Merrill Edge brokerage sign-up bonus.)

Not all Bank of America consumer credit cards qualify for Preferred Rewards. Another card that does qualify is the BankAmericard Travel Rewards® credit card. I initially picked the BankAmericard Travel Rewards credit card myself, but will probably add this card now for the potential to get 3.5% cash back on all my Costco wholesale club purchases. Also, this card gives you cash while the Travel Rewards card rewards must be redeemed against travel purchases.

“Disclaimer: This content is not provided or commissioned by the issuer. Opinions expressed here are author’s alone, not those of the issuer, and have not been reviewed, approved or otherwise endorsed by the issuer. This site may be compensated through the issuer’s Affiliate Program.”

“The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.”

Free Amazon Credits from Apple eBooks Antitrust Settlement

“The editorial content on this page is not provided by any of the companies mentioned, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author's alone.”

kindlebooksThe short version: Apple settled an e-Book antitrust lawsuit for $400 million. Click here and log in to instantly check if you were awarded any credit automatically to your Amazon account. Note the purchases that count would have been made sometime 2010-2012, so if you used a different account back then, log in with that one. The credit will expire on June 24, 2017.

The long version:

In November 2014, a federal court approved a Settlement of antitrust lawsuits brought against Apple, Inc. (“Apple”) by State Attorneys General and Class Plaintiffs about the price of electronic books (“eBooks”). Those settlements resulted in credits for qualifying Kindle books purchased between April 1, 2010 and May 21, 2012. These credits are funded by Apple.

Eligible customers do not need to do anything to receive these credits. If you are eligible, we have already calculated your credit for you and added it to your Amazon account. As long as you have credit remaining we will automatically apply it to your purchase of qualifying items through Amazon.com, an Amazon device or an Amazon app. The credit applied to your purchase will appear in your order summary as a gift card during checkout and in your account history. Eligible customers should have received a notification email from Amazon on June 21, 2016. This credit will expire at 11:59pm PDT on June 24, 2017. You can learn more about the settlements at www.amazon.com/help/ApplebooksettlementFAQs.

I didn’t receive anything myself, but I usually only pay for physical books and just pick up Kindle books when they are free.

New Costco Anywhere Visa Card by Citi Review

“The editorial content on this page is not provided by any of the companies mentioned, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author's alone.”

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Citi and Costco have released the details of their new co-branded credit cards, the Costco Anywhere Visa® Card by Citi and the Costco Anywhere Visa® Business Card by Citi. Here’s a quick overview of the details for each card.

Costco Anywhere Visa® Card by Citi highlights: (For Personal Use)

  • 4% cash back on eligible gas worldwide, including gas at Costco, for the first $7,000 per year and then 1% thereafter. You will not get 4% cash back for gas purchased at superstores, supermarkets, convenience stores and warehouse clubs other than Costco.
  • 3% cash back on restaurant and eligible travel purchases worldwide
  • 2% cash back on all other purchases from Costco and Costco.com
  • 1% cash back on all other purchases
  • No annual fee (with paid Costco membership).
  • Will also serve as your Costco membership card.

Costco Anywhere Visa® Business Card by Citi highlights:

  • 4% cash back on eligible gas worldwide, including gas at Costco, for the first $7,000 per year and then 1% thereafter. You will not get 4% cash back for gas purchased at superstores, supermarkets, convenience stores and warehouse clubs other than Costco.
  • 3% cash back on restaurant and eligible travel purchases worldwide
  • 2% cash back on all other purchases from Costco and Costco.com
  • 1% cash back on all other purchases
  • No annual fee (with paid Costco membership).
  • Will also serve as your Costco membership card.
  • Visa SavingsEdge eligibility. Receive automatic savings after enrollment on qualifying purchases at participating merchants.

Had the Costco American Express? You did not need to apply for a new card. You should have already received the new card in the mail to your registered address. After June 20, 2016, you can start using it. At that time, any cash rewards and/or debt balance will be transferred over to the new card, and your Costco American Express will be closed automatically. You should not have closed your Costco American Express on your own, or you wouldn’t have received the benefits of this automatic transfer.

The rewards will accrue in the form of “Costco Cash Rewards”. This means you’ll get a paper coupon snail-mailed to you once every year in February based on your previous year’s spending, which you can either (1) use as payment for goods directly at the Costco cash register or (2) convert to cash or check at a Costco customer service desk. You may also do a partial redemption at a cash register and they’ll give you the remaining balance in cash. Coupon must be redeemed in person on or prior to its expiration date of December 31 in the year in which it is issued.

Commentary. Here is an overview of the competition:

  • The new Fidelity Rewards Credit Card is another Visa card that should get you 2% back on your Costco purchases.
  • The Citi Double Cash Card exists both a Visa and Mastercard, but reports are you cannot switch to a Visa if you have a Mastercard.
  • The BankAmericard Travel Rewards Credit Card is a Visa and has the potential to earn you up to 2.625% back at Costco in the form of statement credits towards travel (see review; additional requirements apply).
  • The BankAmericard Cash Rewards Credit Card is a Visa and has the potential to earn you at least 2% and up to 3.5% cash back at Costco on up to $2,500 in purchases per quarter (see review; additional requirements apply).
  • Through the end of 2016, the Chase Freedom Card will earn you 5% cash back on up to $1,500 in purchases per quarter. You can even stock up on Costco gift cards bought at Costco.com if you want to max out this limited-time promotion.

This card maintains the overall simplicity of the old consumer card, while slightly improving the rewards percentages. The bonus category percentages went up (new Visa is 4/3/1, old AmEx was 3/2/1). The improved 2% cash back at Costco and Costco.com (formerly only 1%) is significant, as it means that you finally won’t be as tempted to use a non-Costco-branded card at Costco! I was hoping for 5% back on gas to match the Sam’s Club card, but I suppose we’ll have to settle for 4%. I would also note that both the personal and business cards now have the same rewards percentages.

Fidelity Portfolio Advisory Service (PAS) Fee Schedule

“The editorial content on this page is not provided by any of the companies mentioned, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author's alone.”

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From time to time, people ask to send me details of their current portfolio for some advice. I usually decline respectfully as I don’t feel qualified to provide specific investment advice, but I did accept a copy of the general fee schedule for Fidelity Portfolio Advisory Services (PAS) as of March 30, 2016. Here is a scan of the Annual Advisory Fee Schedule:

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Note that the Net Advisory Fee = Gross Advisory Fee – Credit Amount. From the client agreement:

Your Gross Advisory Fee does not include underlying fund expenses charged at the individual fund level for any funds in your Account. These fund expenses, which vary by fund and class, are expenses all fund shareholders pay. Some of these underlying fund expenses may be paid to Strategic Advisers or its affiliates and will be included in a Credit Amount, described below.

In other words, the credit amount is the fees and compensation that your advisors get paid in exchange for picking those investments over the other investments that may not pay such fees. It doesn’t make much difference, as these fees are usually passed onto the retail customers anyway, just indirectly through the mutual fund annual expense ratios. As a result, the gross advisory fee is still the minimum amount that the end customer will pay.

Let’s take a look at what this means:

  • For a $1 million portfolio invested in a Fidelity Model asset allocation, you’d be paying 1.27% of your assets to Fidelity on an annual basis in exchange for them managing your portfolio. That’s $12,700 a year automatically deducted from your account.
  • For a $1 million portfolio invested in a Fidelity “Index-Focuced” asset allocation, you’d be paying 0.85% of your assets to Fidelity on an annual basis in exchange for them managing your portfolio. That’s $8,500 a year automatically deducted from your account.
  • The annual fee above does not include underlying fund expenses. The brochure did not include any specific asset allocations, but this will add another layer of expenses. For example, their Fidelity Strategic Advisers® Core Fund (FCSAX) has an expense ratio of 0.67%.

Consider that many institutions believe that for the next 10-20 years, you’d be somewhat lucky to get a 4% return on balanced portfolio after adjusting for inflation. Put another way, let’s say your $1,000,000 portfolio might provide 4% in inflation-adjusted annual income, or $40,000 a year. With Fidelity PAS, your annual advisory fee of 1.2% would equal $12,700. That would already eat up over 30% of that theoretical income and is before fund expenses. All-in, you’re looking at close to 40% of your potential pre-tax return eaten up by management fees.

Now for my personal thoughts. Briefly, in my opinion, the Fidelity PAS marketing materials (sample brochure) promote their high number of sub-advisors and complexity to suggest that they offer something worth paying a lot of money for. In my opinion, I do not see any evidence that one will receive enough additional return to offset the relatively high fees. While I am a Fidelity self-directed brokerage client and use some of their other products and services, I would not invest my own money in this Portfolio Advisory Service. There are many managed portfolio services like Betterment, Wealthfront, Schwab Intelligent Portfolios, and even all-in-one funds like Vanguard Target Retirement funds which I would recommend my own family members first if they chose not to learn how to do-it-yourself.

I Tried Harry’s Free Razor Trial and This Is What Happened…

“The editorial content on this page is not provided by any of the companies mentioned, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author's alone.”

harrysad
…that’s the ad text that they used to target me, apparently someone who may be interested in bright-orange, modern-looking razor blades. I couldn’t find the exact ad again, but a similar one is to the right. (Alternate title: Harry’s Free Trial Review: Bendy Razor Blades, Easy Cancel)

Well, they were right. I decided to try the Harry’s “Free” Trial which includes a razor and some gel for $3 including shipping. If you don’t like it, just remove the subscription plan in your online account and you get to keep everything else.

Okay, so what happened? The primary reason that I will not be buying any more Harry’s Razors doesn’t involve cost at all. I simply don’t like their design. The blades are proprietary and have a unique “bendy” hinge that I describe as like having a tongue lick you. A tongue that makes it impossible to get the firm shave that I prefer.

I created an animated gif to help illustrate:


via GIPHY

After doing this trial, I found that the Wirecutter review site had a similar opinion:

Rather than clipping to a pivoting axis, the way most modern razors do, Harry’s cartridge attaches with a flexy rubber pseudo-hinge that bends when you press it into your skin. Harry’s claims that this design yields an effect that, like “a paintbrush on a wet canvas … flexes to the contours of your face for precise control.” In fact, the opposite is true: The cartridge yields too much, resulting in a sloppy shave.

I don’t consider myself a picky razor user, for a while I’ve been using a basic Gillette Mach 3 bought from Costco for $1 or under each. (I was surprised to see The Wirecutter also chose a Mach3 blade cousin as its winner.) As I can last more than a month with each razor (dry after each use), I am already spending less than a dollar month on razors. I have not tried the Dollar Shave Club. For me, buying a bulk pack of razors once every two years requires less mental bandwidth than having to manage an online subscription.

I’ll keep the rest of this review short and simple:

  • Ordering was easy, site design is nice, and the trial shipped promptly.
  • Canceling the trial was also easy with no hard sell.
  • I did not like the razor design, and for that reason will not be ordering any more Harry’s razors.

Shaving preferences are very subjective. I would still recommend the Harry’s trial itself.

Взять кредит www.lkredit.com.ua
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