Online savings accounts are earning WAY more than brick and mortar. American Express Savings and Goldman Sacs (Marcus) savings accounts are currently earning 1.6% and 1.55% APR currently. There is no minimum balance required to start or maintain the account, and the account holder can do up to 6 withdrawals per monthly statement. Really easy to transfer funds in and out, too.

Those are close to CD rates (1.78%) at my local bank, but with the benefit of a withdrawal option (vs. locked in for x-months).

Exactly.

* Examine your TV subscriptions... We eliminated all of our sports programming as there are no sports right now...
* We realized that we are hardly driving at all and only using one car. We took the other off the insurance.
* We evaluated our phone plans and are able to temporarily use a lot less data.
* No longer in a hurry go to anywhere, we brew that morning coffee at home and are eliminating that latte from the drive-thru.

Shop at Aldi.
Plant a garden. I use the Square Foot Gardening method.
Use GoodRx for prescriptions.
Slow down. A speeding ticket will cost more than any time you save.

Unfortunately it all too often costs more up front to save money in the long run.

In 1997, when I bought my current house, it needed a roof. I spent almost twice as much for a metal roof as I would have spent on an asphalt shingle. Asphalt shingle would have needed replacement in 10 to 12 years, which means that by now I would be needing to put my third roof on the house. The current cost of a replacement asphalt shingle roof would be more than the cost of the metal I put on 23 years ago. But my metal roof probably has another 25-40 years of usefulness.

In 2020 the government is allowing a 26% tax credit for a rooftop solar system. This year I am biting the bullet and have put on a rooftop solar system. With the tax credit and my usual usage and the historical increases in costs for electricity and service in my area, my system should pay for itself in savings over 7-10 years while the system is guaranteed to function at 80% or more still in 25 years.

For my younger years I bought used vehicles that were checked by a reliable mechanic to ascertain they were in good condition. I generally paid about half the price of the vehicle when it was new and I generally got 5 to 7 years of service out of them. My first new vehicle was a 1999 truck that we still have because its book value is too low to get rid of a well functioning vehicle whose only flaw is that the mpg are awful. It gets used around the property and is loaned out when friends or family need a truck to haul stuff. The household has a 12 year old hybrid bought new that is also performing well and a 2 year old bought new SUV that is doing well. We have had few repairs on any of our vehicles. They get their routine maintenance religiously and they seem to be lasting forever.

@Flash wrote:

They get their routine maintenance religiously and they seem to be lasting forever.

When I finally got rid of my 2000 Mercury Sable in 2018, it had 421,000+ miles on it. Routine basic oil changes are an up-front expense that will save you much more money down the road.

And oil change shops encourage us to do paid oil changes perhaps even a little sooner than the owner's manual would suggest, which seems to be critical to engine health. The potential danger of picking up a vehicle at the end of a 3 year lease was highlighted to me by a co-worker when I offered to pick her up and drop her off when she left her car for its routine oil change since she had done the same for me. She was two years into her three year lease and seemed surprised that anything might need to be done to a car that wasn't broken down--she had never done an oil change on any of her leased cars.

We have used AMEX Money Markets for quite a while to park some of our liquidity. I totally agree they are awesome. We love AMEX for credit as well. What great customer service all around. LOVE THEM!

@JASFLALMT wrote:

Online savings accounts are earning WAY more than brick and mortar. American Express Savings and Goldman Sacs (Marcus) savings accounts are currently earning 1.6% and 1.55% APR currently. There is no minimum balance required to start or maintain the account, and the account holder can do up to 6 withdrawals per monthly statement. Really easy to transfer funds in and out, too.

We still need our cars albeit very, very intermittently and have not cancelled any insurance. However, our insurance company is giving us a 15% refund against our policy for the next 2 months; was notified via email. I checked STARZ and HBO on FIOS and they also are now gratuitous for the time being. Thanks again Honny for the Showtime tip!

Never ever take a cash advance on a credit card. Call me captain obvious but some people just don't know that the interest rate is around 25% AND interest begins accumulating the very day you take that advance. Not like regular credit card usage where interest is added after a month or so.

You'd probably get a better deal with a neighborhood loan shark!

Edited 1 time(s). Last edit at 04/19/2020 07:41PM by sestrahelena.

My insurance agent left a message after I had called to ask about a discount on my auto insurance. He is an independent agent and stated that all of the insurance companies whose policies he sells are issuing rebates on the next renewal date for all auto policy holders, even those in the very lowest "pleasure mileage" rate class. My renewal date is 7/1 so I should see this soon. I have Erie Insurance.

Re: cancelling auto insurance. DH reminded me that a registered car in our state must be insured with at least liability coverage. If you cancel, you must surrender your plates.

@sestrahelena wrote:

Never ever take a cash advance on a credit card. Call me captain obvious but some people just don't know that the interest rate is around 25% AND interest begins accumulating the very day you take that advance. Not like regular credit card usage where interest is added after a month or so.

You'd probably get a better deal with a neighborhood loan shark!

I'll throw in basically the ONLY exception, Discover.

Discover has an option called "Cash Over."

[www.discover.com]

Basically, like you would with a debit card at a grocery store. When you have a purchase, you actually have an option to pull cash out (up to $60 daily at my local grocery stores, but Discover has a $120 daily limit). The benefit here is that it is treated like a regular credit card purchase, as opposed to a cash advance, which is HUGE. Saves runs to ATM's and sometimes the individual grocery store doesn't properly code the purchases correctly, so on occasion, I can benefit from a 5% kickback (5% of $60 is an extra $3 for doing nothing!) from just pulling cash out and depositing it back to my bank account and paying my credit card balance at the end of the billing cycle)/

If you are growing a garden, you can use a lot of the greens that you might not normally use. Such as beet leaves, broccoli leaves, Etc. I have a bunch of broccoli plants that never get actual broccoli but I eat the leaves. Prepare the leaves just like you would prepare spinach. Just cook them a little longer because they tend to be tough.

Where do you find Amazon cards for 10% off? I never see that with any of the card discounters.

@Tarantado wrote:

6. Hack Your Way to Drop Cost with Coupons, Card Offers, etc.: In my case, I've been stocking up on a LOT of Amazon gift cards, as I'm able to easily purchase them for 10% off. For every $1,000 I frontload, where I can purchase other gift cards to other outlets as needed, I pocket a tax-free $100 on the backend. This adds up quite quickly.

pamama,
If you have an Amazon gift card, they will offer specials on topping that up when you order something. Apparently they do that with other vendors' cards as well. At least, that is how I read the last post.

@panama18 wrote:

Where do you find Amazon cards for 10% off? I never see that with any of the card discounters.

AMEX Offers, CashApp, etc.

Right now, I've been stocking up on Amazon gift cards using 10% off of up to $7.50 offers at Walgreens, grocery stores, etc. So any time this 10% offer pops up at stores, I use it on gift cards for later use. Hope that clarifies.

@walesmaven wrote:

pamama,
If you have an Amazon gift card, they will offer specials on topping that up when you order something. Apparently they do that with other vendors' cards as well. At least, that is how I read the last post.

Close. For example, one offer I maxed out already is:



5% for up to $10 = up to $200 worth of gift cards. For my AMEX Blue Cash Everyday Preferred, that's 6% off grocery stores + 5% = 11% off of $200 worth of gift cards. Not a bad deal and a good way to offset my expenses to mitigate against my recent 20% salary cut.

Similar offers pop up for Chase, CashApp, etc. I look at the bottomline "after rewards, cash back, back-end offers via Rakuten, etc." to see how I can minimize my overall expenses.

Oh, ok. I don't have any of those apps. Guess I should get them, plus start paying attention to all that stuff I see on the sites of my cc issuers. I've been ignoring it, not wanting to wade through it all.

Thanks for the responses. I have been enlightened.

@shoptastic wrote:

@sestrahelena wrote:

Stop buying lottery tickets. Powerball, scratch offs, whatever they are. Chances are, will never win enough to exceed or even meet your lifetime expenditure on these. I will never understand how people on a low/fixed income spend $20-50 on this crap as soon as their, "Check comes in." I have heard so much of this at gas stations over the years.

If I could get those low-income folks to spend $20-50/month on gold or silver ETFs...they'd be making money.

GLD (although, I prefer SGOL and PHYS now for higher security)
$118 in December 2018
$162 today
30% return

Better than a bank CD for sure! Better than their lottery ticket gambling most likely. With so much money printing right now throughout the world and a global recession, gold is set to rise for many years.

Looks like the ultra-wealthy are being advised to buy gold:


[www.reuters.com]

@ wrote:

Before the COVID-19 pandemic, most private banks recommended their clients hold none or just a tiny amount of gold.

Now some are channelling up to 10% of their clients’ portfolios into the yellow metal as the massive central bank stimulus reduces bond yields - making non-yielding gold more attractive - and raises the risk of inflation that would devalue other assets and currencies.

While gold prices have already risen 14% since the start of the year to $1,730 an ounce, many private bankers bet that gold - a hedge for both inflation and deflation - has further to run.

“Our view is that the weight of monetary supply, expansion, is going to ultimately be debasing to the dollar, and the Fed commitments, which (are) anchoring real rates, make the case for gold pretty sturdy,” said Lisa Shalett, Chief Investment Officer, Wealth Management at Morgan Stanley (MS.N).

For people wanting to own it in a stock or ETF, I'd recommend the safest route, which is:

PHYS (Sprott Physical Gold Trust)

There isn't options/futures contracts used to buy/hold it like in the super popular GLD fund.

Gold and Silver exploding.

European Union has agreed on $2 trillion stimulus. U.S. will be forced to print money to keep up stimulus and enhanced unemployment (in some form or another). Otherwise, we get riots as "benefits cliff" ends this month with 51 million unemployed (traditional unemployment + PUA combined).

U.S. dollar debasing = your money in banks losing value. The dollar will be mush in the future. Just look at food inflation at the grocery store already.

Up over 50% on both my gold and silver investments. Yay!

Edited 2 time(s). Last edit at 07/22/2020 01:23PM by shoptastic.

Poor savings accounts:
[www.cnbc.com]

@ wrote:

As recently as last year, online high-yield savings accounts offered interest rates of 2% or higher. But now, you’ll be lucky to find half that rate, as some of the most popular accounts have dropped interest rates below 1% to “all-time lows,” according to Ken Tumin at DepositAccounts.com, a website that tracks savings rates.

Barclays and Marcus by Goldman Sachs cut savings rates to 0.8%, while Synchrony Bank’s new rate is 0.75%, the lowest all three banks have ever offered, Tumin says. Capital One’s savings account rate also fell from 1% to 0.8% this week.

Meanwhile commodities have exploded. Gold through the roof, as people want to preserve their wealth from inflation.

OMG! Warren Buffett bought gold!: [ca.finance.yahoo.com]

@ wrote:

Warren Buffett’s Berkshire Hathaway (BRK-A, BRK-B ) stock moves for the second-quarter are out, revealing a new position in Barrick Gold.

According to a 13-F regulatory filing, Berkshire Hathway snapped up approximately 20.9 million shares of Barrick Gold (GOLD), a position valued at $563.5 million at the end of the quarter.

Edited 2 time(s). Last edit at 08/14/2020 08:40PM by shoptastic.

Eh. Still not budging on buying gold over just contusion investing in index funds. My ETF’s are basically back up to pre-COVID numbers and never sold a cent of my shares and only dollar cost averaged throughout this entire time.

@Tarantado wrote:

Eh. Still not budging on buying gold over just contusion investing in index funds. My ETF’s are basically back up to pre-COVID numbers and never sold a cent of my shares and only dollar cost averaged throughout this entire time.

I think the case for commodities - including gold and silver - outperforming U.S. stocks over the next decade or so is very strong. In terms of wealth preservation and growth, I would definitely recommend people hold some gold/silver and/or other commodities.

Stocks will protect against inflation and preserve wealth to a degree, but a lot depends on what valuation levels you hold and buy them at.*** Commodities, which are hard assets that will reprice to currency devaluations, are better at preserving (and even growing) wealth in high stock valuation and inflationary scenarios. Cash would generally be the worst asset to hold in those situations. If you look at Warren Buffett's Berkshire Hathway 13F filings and quarterly statements recently, he's bought two major hard assets: Dominion Energy (gas pipeline) and Barrick Gold (miner).

If the dollar devalues and we get moderate to major inflation (which most signs point to), then U.S. stocks should go up nominally (while maybe staying relatively flat in real/effective value) and preserve wealth to a degree (again, also greatly depending on what levels you bought them), but commodities would go up higher and faster in their repricing ratios. That's basically what's happened this year ALREADY. Gold and silver have outperformed U.S. stocks in aggregate. Whenever stocks have gone up, you'll see gold, silver and other commodities rise even more shortly afterwards or concurrently.

***The problem with owning/buying U.S. stocks at the moment is their bubble valuation territory. We were at pre-1929 Great Depression and 2000-2001 dot com bubble levels right before COVID (in February) and remain there even now. Historically, that bodes ill for stock gains going forward (in real terms - even if they do well nominally, which may happen going forward, due to all the money printing) as it took two decades for stocks to recover after the Great Depression and 10 years (7 years before a brief recovery and then the 2007-8 financial crisis happened) essentially for stocks to recover nominally post-2000 dot com bubble crash. In inflation-adjusted terms, it took 15 years for stocks to recover from the 2000-2001 bubble.

I would rather hold foreign stocks of good companies or countries of low-debt, high growth, and good demographics (e.g., lots of young working age people, such as India) countries with low valuations right now than U.S. stocks. Although, I'd never be entirely in one region only, as that can be diversification suicide. From late-2019 through early 2020, emerging markets had outperformed U.S. stocks and I think they likely will going forward.

In economics and life, there is the saying: "There is no free lunch." That applies to general investing and personal finances in many ways. If you overpay for something, you cannot expect a good long-term return. AT SOME POINT, things balance out and you have mean reversions.

Edited 4 time(s). Last edit at 08/24/2020 12:03AM by shoptastic.

One quick, important thing to recognize about gold is that it doesn't necessarily compete against stocks, but rather primarily cash and bonds. When those asset classes have negative real yields, such as most do now (you'd have to reach into the 20 and 30 year U.S. Treasuries*** to even have a shot at a less than 1% real yield or the risky corporate or muni bond markets, where default risks are high), gold is seen as a much better alternative. When there are negative real yields, gold rises and the opportunity cost to hold it (vs. bonds) no longer exists.

Add inflation risk to negative real yields (or simply puny ones of less than 1%) and the conditions for gold are optimal.

We've seen this play out historically. Gold always goes up in those scenarios.

Sometimes, it can be dramatic: $38 ounce in 1970 to $600 in the early 1980's.

We could see gold go up shockingly high in the next five years (or the 2020's decade). By then, people will be paying very high prices to try to hold it/get in. At that time, I'd want to start selling mine.

***And that is under current conditions. Throw in higher future inflation and those real yields will be negative on the 20/30 year Treasuries.

Edited 2 time(s). Last edit at 08/23/2020 10:55PM by shoptastic.

[www.imf.org]
"The Liquidation of Government Debt" (Reinhart and Sbrancia) - 2015
[www.lynalden.com]
"A Century of Fiscal and Monetary Policy: Inflation vs Deflation" (Alden) - 2020


For people wondering how our national debt and fiscal deficits will play out and what it may mean for your money over the next 10 years, I recommend memorizing these articles (even if just the gist) and images. The first is from Harvard economist, Carmen Reinhart (w/ fellow IMF economist, M. Sbrancia) and the second from "rising rockstar" macro and value investment strategist, Lyn Alden.

Once government debts approach a certain level of GDP, historically, the only way out has been to officially default (or restructure) or unofficially default by inflation (super power countries almost always take this path, as it's less embarrassing and avoids very deep, short-term pain). In a study, 51 of 52 countries with debt-to-GDP of 130%, had to go down these paths. The U.S. coming out of WW2 had debt-to-GDP of 119%. Coming out of COVID and into 2021, we will have similar levels (CBO projects 115%). To manage that debt, historically, the Fed has had to suppress interest rates below inflation, in order to inflate away the debt. U.S. Treasury holders will get their money back nominally, but have it be worth less in real terms. Per Reinhart and Sbrancia, from 1945-1980, interest rates were purposely suppressed below inflation and 50% of the time they were negative in real terms. This allowed us to shrink our debt-to-GDP down to about 25%. However, real interest rates (i.e., adjusted for inflation) averaged -.3% during that time. In the 1940's, alone, people holding U.S. Treasury bonds lost 1/3rd of their purchasing power (cash was even worse with no yield at all). The other major inflationary period was the 1970's.

The 2020's look to be similar to the 1940's. During that time, protecting one's purchasing power meant owning assets (stocks, commodities - including precious metals, real estate, art, fine wine, etc.). Holding cash or U.S. Treasuries meant losing 1/3rd or more of your money in real terms. Food for thought and something to be careful of in the coming decade.

This is not for economists, the faint of heart, or the government. It is just a wee thing for anyone who wants a little kick in the pants (or the wallet).


Who remembers Judith Levine and Not Buying It: My Year of Not Spending? The book has been around for a number of years, and I recently found additional reports from different people who tried variations on the not spending theme and learned how they varied the theme. Once, I did well with the general concept. That was years ago. I want to make another attempt next year. This time, there are new considerations: a pandemic, different revenue streams, and no reason to aim at a year. For one month at a time, I am going to see how many expenditures I literally can live without and then... decide about the next month.

@Shop-et-al wrote:

Who remembers Judith Levine and Not Buying It: My Year of Not Spending?

I've cord cut and just watch YouTube (free version) nowadays. I do not own Disney+, nor Netflix either.

I have a pre-paid cell phone plan. Those help.