Sunday, April 11, 2010

Recommended Personal Finance Articles From: MoneyNing, FreeMoneyFinance, No-SpendZone, FundMyMutualFund, FinancialArmageddon, MyGoodCents, Etc.

Here's several recommended articles from those sites that share links with Plugged in Finance. I hope they are of use to you.

MoneyNing. "Focus on Something New to Stop Spending Money."

Free Money Finance. "Where You Should Hide Money and Valuables at Home."

Free Money Finance. "$1 Million Not Enough for Retirement."

The No-Spend Zone. "Can the Magic Jack really make your phone bill disappear?"

Fund My Mutual Fund. "1.2 Million American Households Lost in Great Recession - Through 2008."

Financial Armageddon. "Not Your Father's America."

My Good Cents. "Free Chick-Fil-A Food All Week!"

Dividends 4 Life. "Dividend Stocks' Tax Rate Could Increase to 39.6%."

Now Cash Only - Closed Three Credit Cards in Last 50 Days Due to Fraudulent Activity (Two Citibank Cards and One Discover Card)

Regrettably, I have become a PRO at handling fraudulent activity on my Citibank and Discover cards.  I have two rebate cards between these companies giving 2% and 5% cash back, respectively.  Nowadays, our household has transitioned to cash only at three stores.

Starting in February, I had to close and reissue a credit card due to fraudulent activity for the first time in my life.  It was my Citibank card which had some unusual activity out of Paris, France.  I was out about $400.  I called Citibank and learned that I had to fill out an affidavit confirming that the cards were in my possession and that the activity was not mine.  I also included a transaction history printout with all fraudulent activity clearly marked.  The fraudulent activity was credited back to my account four days later.

I learned that the affidavit form is mailed to you in a non-descript envelope.  Make sure you sift through all of your junk mail during a fraudulent claim period so that you don't experience any unnecessary delays.  Also, you can get the affidavit form even faster if you contact Citibank's Security department directly.  The Citibank Security department can email you the affidavit form.  Once complete, the affidavit form can be either faxed or mailed back.  I faxed my affidavit back and enjoyed a quicker processing time.

If you move around as much as me, you may not give serious consideration to keeping your contact information current on all your accounts.  I could have caught the fraudulent activity about 24-48 hrs sooner had the Credit Card company been able to contact me directly with their concerns.

I started using my Discover Card while waiting for a new Citibank Card to be issued.  I didn't change of my credit card usage.  Then, my Discover Card was hit with fraudulent activity about 35 days later.  This fraudulent activity was in the amount of $180 at a Wal-Mart in Nashville, TN.  This time, I caught the fraudulent activity within the first 24 hrs.  Discover Card didn't require an affidavit and credited the fraudulent charge with just a phone call.

While it was disconcerting, I wasn't about to go to cash only just yet... Unfortunately, 15 days later I was hit for about $160 in fraudulent activity out of Spain on my new Citibank Card.  With all of this fraudulent activity, I was able to discern a common thread across all three accounts.  Each account had been used at facilities co-located withing a shopping center.  I initially thought that one location was skimming and cloning my credit card information.  It turns out that it wasn't a single store.  It was in fact the credit card clearing house.  So, next time you get hit for fraudulent activity on a credit card, understand that the problem can be bigger than credit card skimming at just one store.

Saturday, April 03, 2010

A Recommended Strategy to Those Who Are New to Dividend Reinvestment Plans (DRIPs)

I entered 2010 with 21 DRIPs. I bought many of my DRIPs in late 2007 and early 2008 because I was getting a discount on the broker fees due to a one time annual subscription to Direct Investing's "Money Paper." I originally felt that it was smart to get a large number of DRIPs because it would give me something to do (following the many stocks) and establishing more DRIPs would allow me to max out the broker fee discount I was getting.

I ended up buying stocks that included Manitowoc and Alcoa. Since buying these stocks, I have had little interest in carrying some of them and have recently sold Manitowoc (article that convinced me to sell) and downsized to 20 DRIPs.

Nowadays, I believe that DRIP portfolios are best suited to a small number of holdings that can be easily followed and are somewhat predictable. So, what is predictable? Very little. But, one may consider stocks with long standing track records as somewhat predictable. A good group of stocks matching this are the "Dividend Aristocrats." Dividend Aristocrats are those stocks that have established track records of increasing dividends every year for at least 25 years.

My current mood on DRIPs is to restrict any subsequent purchases to those companies that meet the following starting criteria.

* No or low fee for dividend reinvestment / ongoing monthly purchases.

Then, and only then will I start my subsequent analysis. You might say, this is pretty arbitrary. You leave out a lot of great possible investments. My answer is why buy and hold a stock for 10+ years unless it is well admired? Why buy a DRIP if it's not cheap for ongoing periodic investments? Why hold something indefinitely for the sake of future dividend income if the company doesn't hold long-term dividend growth as a principle goal?

Companies that meet these criteria:

3M Co (MMM)
Exxon Mobil (XOM)
Johnson & Johnson (JNJ)
Lowe's (LOW)
PepsiCo (PEP)
Wal-Mart (WMT)

* The six stock hyperlinks above send you to the "Transfer Agent" that manages each company's DRIP. Common transfer agents are Computershare, BNYMellon, Wells Fargo.

I own DRIPs in MMM, XOM, JNJ, LOW and WMT plus too many others that I wasted my time buying. I'd be happier had I restricted my DRIP portfolio to something smaller and more closely resembling this list of six.

Prior Plugged in Finance articles on DRIPs.