In my opinion, such “cheapskate accessories” tend to conflict with the theory of cheapskates. A typical cheapskate would just use their fingers to get toothpaste out of a tube or would not open a can of pop if they knew they were not going to finish it. Generally, such products barely work as well as they are advertised and often are trying to fill a product gap that doesn’t even exist.

Here are a few of such of such gimmick items and what I foresee as their actual value:

• Bottle Top – Bottle tops are intended to turn your can of pop into a bottle, which is suppose to prevent spills and extend the life of pop. Will somebody who purchases this actually make the effort every time a can of pop is open to put on this plastic cap? Will it even be clean from the last time? Will they even know where they put it? Finally, if you’re in the habit of not finishing your pop, then consider buying less and purchasing something that already has a cap, like drinks in a bottle (brilliant!).
• Pasta Boat – The pasta boat is supposed to change the way we make pasta by allowing us to cook, strain, serve and steam pasta all in one plastic device. While this may sound appealing, let us first remember microwaving and eating out of plastic is not advised. Second, what is wrong with the strainer we have already purchased?
• Pedi Paws – For all of us with dogs, the Pedi Paw is supposed to be the pet nail trimming solution that we cannot live without. This device is designed to actually file your pet’s nails, which will save you trips to the groomer. While this product may work on the occasional (extremely chill) dog, most of us realize a motorized device to trip their nails is humorous. Again, use the clipper you already have or you will likely waste $20 on a filer that you try once and store.

If a device is intended to save you money, that alone doesn’t automatically justify it as a smart purchase.

Have you used any of these products that have actually turned out to be lifesaver products? Please share….

I am willing to bet that I have done the math right and if so, your cell phone company is completely gouging you.  Aside from minutes and the company telling who you can call and when, the text messaging is outrageous: but they are able to be discreet about it.  How much is too much?Let’s say that you have an average plan and you text moderately.  Moderately to me is about twice a day, but lets just say its 100 a month.  What would that be with out any modifications and you paid for each one at 20 cents a message.  That would put you up an extra $20 dollars a month.  Close to 50% of your original bill…Thats a lot!  But wait it gets worse.

The point of this exercise is to think about how much data you are transmitting.  A text message is limited to 160 bytes.   (Thats why Twitter has a limit at 140 characters.)  So what are you paying to transmit a measly megabyte?  About $1,250.  Amazing huh?  How much do you think it costs the cell phone company to transit a megabyte?  A few pennies perhaps?  I am not even going to bother calculating the percentage margin they get for that.  See how they are able to sneak that past us?  

I realize that many people have different plans and you might be paying 10 cents or maybe you pay $5 for unlimited text messages:  Psst – its still a rip off.

• Even at 10 cents, you are paying $625 per megabyte.
• Even if you have unlimited text messages at $5, its still $312.50 (at an average of 100 a month) per megabyte.

You have to basically send thousands a day and break records to get your money’s worth.  Now I have to ask: what are they doing with all that extra cash?  

As a side note, I would like to point out that Senator Khol is looking unlawful text message practices.  Also, take a look at these:  New record claimed for text message & Dynamic duo attempt to break text messag record.  

Check out this report as well.

The latest is still being done at Fry’s Electronic Store: where one TV had an HDMI connection going up against what looks like S-Video.  Tsk tsk Frys…

I would love to hear someone try and defend these cables as a worthy expense.  Keep in mind that I do believe in decent shielding over longer distances…

[Thanks Engadget]

The Bernie Madoff scandal has exposed gaps in our federal securities laws, in addition to the pocketbooks of wealthy investors, including fund managers.  The idea that rich investors have any more ability to avoid frauds than the everyday main street investor is ridiculous, and the Madoff case should end with strong regulation changes.

I have a hard time understanding the need or appropriateness of the accredited investor standard that has been written into our securities laws.  The law basically assumes that rich individuals are somehow more capable of investing their money, especially in complex investments, like hedge funds.  An Accredited investor must have a net worth of at least one million US dollars or have made at least $200,000 each year for the last two years ($300,000 with his or her spouse if married) and have the expectation to make the same amount this year.

This standard should be removed going forward.  The Madoff scandal has taught us that if anything, rich investors have more to lose and should be regulated as such.  All investors should enjoy the same protections against scammers like Madoff and a dollar amount of your net worth should not be the determining factor between federal protection or not.

Michael Jordan was an extremely talented basketball player, and thus has made a lot of money throughout his career.  This doesn’t make him a talent derivatives investor and exempt him from federal laws does it?  Warren Buffet is one of the best investor of all time, but this doesn’t mean he should receive less protection in other areas of his life like on the surgery table does it?  We don’t exempt the rich in any other regulated area in our society, so why is investing any different? $

In what appears to be the largest identity theft case in history, should put consumers on a full time statement watch.  Customers of nine major retailers including: DSW Inc, Forever 21, Barnes & Noble, Sports Authority, Dave and Busters, Boston Market, Office Max, BJ’s Wholesale Club, and TJX Cos could all be potential victims.

The 11 charged supposedly hacked into the wireless networks of the large retailers and used “sniffer” programs to help them steal credit and debit card numbers of previous customers.  They would then withdrawal thousands of dollars from ATMs.  They also sold some of the credit and debit cards numbers over the Internet, which could potentially result in more money out of our accounts.  Just because the fraudsters appear to be caught, doesn’t mean your safe.

How Can You Protect Yourself?
Unfortunately, this type of thing will continue to remain a threat against consumers because of the electronic nature of our spending habits.  In the near future we will release our tips for protecting your identity with insider insight from  Scott Mitic, CEO and Founder of Trusted ID, a company that provides consumers with the power and resources to manage and protect their credit and personal information, and who has access to that information.

Don’t become one of the 40 million:

• Read all you statements carefully.  This includes cards you do not use very often.
• Look for suspicious purchases you do not recognize.
• Dispute your charges.  If there is a purchase or withdrawal you did not make, call the 800 number on the back of your credit card and report it.  More than likely, you will not be charged for the purchase and this will alert them to future purchases. $

For a copy of our letter sent to the Federal banking regulators, click here.  Or click on the image to the left.

Overall, we feel that the proposed rules are long overdue and in general are legitimate in their intentions. While we generally feel the proposals do not go far enough, we applaud the Agencies for taking the first and necessary steps to curb these abusive practices related specifically to credit cards.  MYM proposed amendments to the proposals in the following areas: Allocation of Payments, Applying Rate Increases to Existing Balances, and Firm Offers of Credit.

In addition to the suggested amendments, MYM also suggested that reform be addressed in the following areas that are not currently incorporated into the Fed’s proposal:

• The number of overlimit fees that may be applied in a single billing cycle should be fairly determined to properly put responsibility on the account holder to stay within their limit, but not overly punish them into unaffordable debt.

• Finance charges are often applied at the transaction date and not at the posting date when the money is actually financed. Finance charges should not be charged before the money is actually lent to the consumer.

• Fees charged to a consumers account for non-use of a card should be banned. Credit is something consumers earn and being charged for not using available credit is cruel and irresponsible.

• Penalty interest rates should be capped at a reasonable rate to both interested parties.

• A disclosure should be added to each monthly bill that clearly states the amount of time it will take and the cost to the consumer to completely pay off an account when only making the required minimum monthly payments. $

When you get a home loan, you have to pay interest.  That’s the deal from the start and there’s no way around it unless you have a rich uncle who just gives you a large sum of money, or you win the lottery.  Either way even that takes a hit; it gets taxed and believe me, statistically you won’t win the lottery.  Or even know someone who does.  If I am proven wrong on that one, you can send me $1,000 to prove it. 

So here is the question:

There seems to be a new system of making a mortgage payment out there and I am wondering if it is worth looking into.  I’ve heard a little about it here and there and have done a little reading about it, but I don’t have enough of a background to make a lot of sense of it or to be able to tell if it’s a legit concept.  Basically what I understand is that it uses the money you already have (sitting in a checking account – they call it idle money) to pay down the average daily balance of the principle which I guess then reduces interest.  They say it can help you pay off your mortgage in about 7-12 years without increasing your payments at all.  Apparently the idea is coming from some math geniuses in Australia.  They wrote a software package that does the stuff for you, but I’ve read that it’s possible without the software if you know what you’re doing.  Any thoughts?

Here is a link to one of the sites where I have read about it – http://www.amazines.com/article_detail.cfm/318683?articleid=318683

Thanks,
Ted

The system from Australia he is talking about is call Mortgage Interest Buster and I would like to recommend anyone reading this to try and find more information about this and send it in so that we can have a more clear idea about its legitimacy.

I would love to write back to Ted and tell him that it seems like an awesome idea and that he should go for it and he will end up making a killing just flipping houses.  But I really can’t.  On paper it seems like it could work but there are about a dozen alarm bells and their respective red flags going off left and right for me.  I made a list:

1. There is almost nothing out there on the internet about this system.  The systems website has a fair amount of information, albeit they state the obvious and have very little proven fact.
2. Why isn’t it being used absolutely every where?  If it were easy, wouldn’t it be called “The Way?”  MY friend Danielle says that from time to time.
3. Is it standard to use a home equity line of credit to make payments on your mortgage?  Or convert it into a mortgage checking account?
4. Where is the glowing testimony of this software that simulates the Australian banking system?
5. And how much is the system that does all this?  $3,500.  Seems like a lot of dough for payment software.
6. If this is so selective, why is it not an option?  And don’t say its because the banks will lose money.  There could be someone reputable that would benefit from this and they would push it.  But they aren’t.  Why?
7. You must have a second mortgage.  What if thats not an option?

A quick note, I would like to show everyone the website that houses two “instructional” videos for this, straight from their website: a short 12-13 minute video and a longer more in-depth 25 minute video.  Please, let me know your thoughts.

So lets say this works.  Is this something you should do?  My gut reaction is full of skepticism.  I don’t like the idea of taking out a HELOC in order to live.  There is way too much hocus and pocus here to illicit any kind of positive recommendation.  Sure you can pay bi-monthly or even daily I am sure, if you wanted to deal with the paper work.  It is possible but not like this.  Unless you are making headway against your principal, you are just making more frequent payments on smaller interest payments.  Lets look at some truths about home finance:

1. There are no good mortgages below 3.5% for 5 years.  If there are then they are called ARMs and you will end up paying even more when the ARM resets.  This a big factor as to why this country is in such trouble to begin with.  It used to be that money was cheap to get a hold of from one bank to the next and they could make those offers.  Policy will and has been passed so that requirements are stricter.  Check this link out for more information.
2. The only way to safely diminish the life of any loan, be it house car or other, is to increase your payment towards your principle.
3. There is a way to take advantage of a pre-payment plan for your mortgage in order to pay it off sooner, but there is no way you should have to pay $3,500 for it.  They have you take a second mortgage (the first mortgage is conveniently a prerequisite to joining in the program), and you leverage that to make payments.  What they don’t tell you is that the little amount you do end up reducing your interest through this forced increased payment system does not really come from any elaborate system.

In conclusion, I don’t believe there are any short cuts.  If there is a way to make this work, and if you did successfully take a second mortgage that had a lower rate than your first, you should not need a $3,500 piece of software to manage it for you by mucking around in your accounts like a rabid kangaroo.  (It is from Australia after all.)  My recommedation to anyone who wants to decrease the life of a loan is to dedicate an extra 10% of your income to the principal.  It is possible but don’t waste a mortgage payment, or two, of $3,500 to do it.  Do your homework and incorporate due diligence into your research.  Let us know what your experiences are as well!

So go ahead!  What would you like to learn about?  Anything from site SEO to the stock market…now is your chance.  If we don’t know or the question is inappropriate, we will let you know.  Be sure to subscribe so that you can keep up with everyone’s queries.

Now hold on, before you flood my inbox about how an author for a large personal finance site like this gets off going to Vegas, let me explain…There is quite a bit of valuable information I can pass along that you might find interesting.

On the way to our hotel, the cab driver asked us (in one of the raspiest voices you could imagine, “What are your plans during your stay?”  We had been a few times before, mostly in college for the annual Spring Break Trip so we kind of new what was around here to do but we feigned carelessness and said Not much, just going to hang around.  He immediately began telling us all about the restaurants both on and off the strip and explained at great length the difference in cost for each.  It was somewhat enlightening that were being given such valuable information from a man who was looking for tips.  He was a nice guy though so, we tipped him.  What he said though was important and you should take note.  If you are on a strict budget, one block away from the main drag will get you to the same places to eat at half the cost.  Having said that, lets start with food:

Food
One of the largest expenses on a trip like this, is the meals.  Every hotel is packed to the gills with amazing restaurants that you have never even heard of, food made by glamorous chefs that make more in a month cooking food, than you spend on food in a year.  With all the richness of this food comes a high price.  What I would recommend would be to go to one nice restaurant and fully enjoy it, and bring the remainder back to the hotel room.  Make another meal out of it and it as cheap;y as you can for the rest of the trip.  Commit to one great meal and then refrain.  Every expensive place is going to be the best, but be warned that food can seriously add up quick.  Visit places off the strip a little ways, try a cheap buffet, stretch your meals in your room.  Have the experience but leave some of your budget for some other adventures as well.

Drinks
Here is a tricky one.  We spent a fair amount of time at our pool, from very early in the  morning until the heat caused nausea.  At the hotel where we stayed, in the blistering heat your were offered two sizes, one that was $9 and another that was $15.  For only $6 more dollars you could double your drink size!  Bargains galore!  Then, to make things even better, you didn’t have to pay!  At least …. not for a while, they would gladly just put it on your room and you can sort it out later.  How nice!  I tell you what, these places are experts at what they do.  Buying drinks anywhere and “charging it” is epitome of “out-of-sight, out-of-mind.”  To save some money: Consider how much you might drink in an average day, factor in a 15-20% tip on that amount and bring it in cash.  Once you run out, that’s it.  The drinks are paid for and there are no surprises later.  Go to an ABC store and have your own drinks in your room.  (You will end up paying for one bottle when you buy one drink elsewhere: See Clubs below.)

Hotel
We got lucky this trip and found a great deal at the Mirage for 4 people, 3 nights at $400 for the group.  I am not sure where we got that deal but once I find out I will put an update here.  There are tons of websites that have great deals and most of the larger online airline ticket arenas also have great deals when you bundle your tickets together.  One more thing: Do not touch the mini bar.  Even if you move stuff around, its weight sensitive and you will be charged unless you put everything back and ask they your fridge be reset.  Check hotels off the strip for even better savings if you can’t get something reasonable at a mega resort.

Airline tickets
We have discussed this before and have shown that Mobissimo.com is pretty competitive as is CheapOAir.com.  For this trip we ended up with CheapOAir.com.  One pair of tickets ran about $670 while another pair a few weeks later ran about $860.  Plan in advance and you can save money here, that was a lesson I learned.  For the most part however, you really just have to dig and make a few sacrifices as far as direct flights and times in order to make it somewhat affordable.  The airlines are grasping for air (or fuel, I guess) and have a nasty tendency to take it out on the consumer.  Take your time and plan ahead and you will get a great deal.

Entertainment
Similar to plane tickets, if you spend time price comparing, you can usually find a good deal.  If you want to go to a huge show, buy them early, as prices will rise as the date gets near.  For smaller shows, see if you can get a ticket later closer to the start time as they might be anxious to get rid of some seats.  Either way, with the right amount of time you can get a good deal here.

Gambling
My advice to anyone who goes to Vegas, be very, very cautious about gambling.  You can have great fun even if you don’t gamble at all.  If you do, be sure that you know as much about whatever game you are playing like the back of your hand.  Every game in a casino is design to take your money.   And ATM’s charge at least $5 to get money out.  The very decor, sounds and smells are all engineered specifically to part you with your money.  Check this list out:

• There are no clocks.  It is very easy to lose track of time.  The longer you stay hooked up to a table, or slot machine, the more you spend and if you stay longer than intended, well that’s OK right?  Wear a watch.

• Everything around the casino floor adds excitement.  Live music, interesting dancers, prize giveaways, cars waiting to be won with just one quarter…

• Its incredibly easy to stay alert.  The room is chilly staving off any sort of sleepiness, the drinks are quick and refreshing (and free if you are betting, another enticement), and some have even rumored that they pump oxygen into the vents to keep people awake.  I don’t believe this but who can really say for sure?

• The casino floor is a maze of multicolored carpet that and tables and machines and anywhere you want to go has to be on the other side of the games and tables.  From the moment you step away from the check in desk to start heading towards the elevator, you are haunted and teased by the most interesting games you can imagine, all of which take cash in any form.

Clubs
All I can really say about this is, stay away from them.  Girls get in free, but guys pay a small car payment just to get in.  Then you get drinks and you can forget it.  Its an incredible amount of money that you will think about for quite a long time.  They are full of awesome lights and every song you have ever heard and another half that you will never hear again.  Its like the movies.  Its insane and the people are nuts.  That’s all I can really say right now.

Most of this seems pretty obvious I am sure, but when you are there, money takes on a completely different meaning.  You feel as though you will never run out and you are just going to get this one last thing and that’s it.  Don’t get me wrong, there is definitely a time and place for Vegas and taking vacations and letting loose.  We have to do that, its in our nature.  But in moderation, of course. Plan and budget and show discipline, and you will regret far, far less.  Remember that Vegas is designed from the beginning to take your money and convince you that you need to do it.

The cab driver on the way back to the airport had less physical advice and more philisophical ideas.  He said that there were two sides, one where people visited and one where people lived.  Strange how they rarely mix.  The visited side is not meant to last, its designed almost too well.  All that opluence and glamour is being paid for constantly.  Vegas makes about $500 billion (with a “B”) a year.  Thats net, not gross.  The plane ride out there is full of energy and excitement, but the trip home is somehow so much quieter.  You will find a new appreciation for it when you get home and see your $8 six pack of beer in the fridge.  You will think about all the lights, and sounds and you realize that sometimes there are things just as good, at a regular price, under a little 40 watt bulb, in your own fridge.  $

In light of the fact that this site is predicting its imminent demise (due to factors not yet discussed), we found a Yahoo-er who has some interesting things to say, complete with spelling errors and all. (Read original here.)

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I have been a lender on Prosper.com since March 2007, with about $2,400 invested. Although my projected ROI is currently about 10%, I stopped lending in October for a variety of reasons all linked to Prosper’s management. Basically, the best way to summarize Prosper is that it is a wonderful concept, executed horribly due to the incompetence and arrogance of management.

There are too many serious problems with Prosper to list here, but brief review of www.prospers.org, which is the largest Prosper forums, will provide anyone interested with a long list. Here are a few:

1) The default rate on Prosper is MUCH higher than advertised. Chris Larsen, Prosper’s CEO has been quoted in news articles saying the default rate is 2.7%. While perhaps technically accurate using Prosper’s narrow definition of “default,” this is utter balderdash from any real perspective. Prosper only counts a loan as defaulted when it sells it to a junk debt buyer for pennies on the dollar. However, Prosper currently has such sales only quarterly, so it is not uncommon for there to be many loans that are 5, 6, 7, or more months late. Historically, loans almost never come back from being even 3 months late, so all of these loans are defaults in everything but name. Moreover, Prosper calculates its official default rate as the number of defaults divided by the number of loans, but because many loans are too new to have defaulted even if the borrower never made even the first payment (which happens far more often than you might think), this also tends to understate the default rate. So far as can be seen, the real default rate appears likely to be about 20% (or more).

2) Another problem with Prosper’s handling of defaulted loans, is that the process completely lacks transparency. Prosper flatly refuses to disclose the identity of any of the junk debt buyers that have purchased defaulted Prosper loans, the identity of (or even the number of) any junk debt buyers that have sought or been solicited to participate in the junk debt sales, the process Prosper uses to advertise the junk debt sales to possible buyers, or the method used to calculate the sale prices of the various defaulted loans. Prosper lenders – who, after all, actually OWN the defaulted loans being sold by Prosper for pennies on the dollar – have no idea whether Prosper diligently and/or successfully obtains as high a price as possible for the defaulted loans, or simply sells them off to the first buyer it can find, regardless of price. For that matter, without transparency there is no way to be sure that Prosper doesn’t simply sell the defaulted loans at a favorable price to a company controlled by a Prosper insider. Given Prosper’s many other shortcomings, there is no good reason to believe that Prosper handles the junk debt sales in an appropriate and competent manner. Moreover, there is at least one piece of evidence that it doesn’t. Long before the last junk debt sale, a lender and forum member made a firm offer to purchase a particular loan that was headed to default. He made this offer by sending it certified mail, return receipt requested, to Prosper’s VP of collections and to its General Counsel. Prosper completely ignored this offer for almost two months, and then sent a rejection letter at the same time it sold the loan (along with others) to a junk debt buyer for considerably less than what had been offered to Prosper. This unjustified rejection by Prosper collectively cost the almost three-dozen lenders on that loan $500, which was the difference between the rejected offer and the actual sales price to the junk debt buyer Prosper chose to sell the loan to instead.

3) One of the contributing factors to issue #1, is that Prosper’s collections are anemic. When a loan turns 1 month late it is turned over to Prosper’s collection agency, but historically, only around 15% of loans in collections are brought current. There have been many anecdotal stories by late or defaulted borrowers on Prosper’s old forums that they either were never contacted by the collection agency, or the contact consisted of an email or 2 and maybe a phone call or two. Prosper’s own newly-hired VP of Collections admitted that the call logs from the collection agency showed that they were repeatedly trying to contact borrowers at the same time of day, such as between 3-5 pm, so if the borrower worked during the day, no contact was made.

4) Very little information about the borrowers is verified by Prosper. Prosper selects a subset of fully-funded listings to verify employment and income, but many listings become loans without such verification. Prosper has already had to repurchase about $400,000 of loans under its ID-theft guarantee, meaning that Prosper let many fraudulent loans through its systems. Indeed, there is one case (identified by a diligent forum member) where one person obtained a dozen loans from Prosper under different identities. After the forum member outed this on the old forum, Prosper repurchased the loans and sued the borrower in Los Angeles Superior Court to get its own money back. However, there is substantial doubt among the lending community that Prosper tries very hard to identify ID-theft loans, because when it does, it has to repurchase them from lenders.

5) Although Prosper has funded a number of fraudulent loans, it has also cancelled a number of legitimate loans, apparently through incompetence. One such loan involved the brother of a well-respected Prosper lender and very active forum participant. After claiming that faxed documents were illegible and then that Prosper couldn’t open a .pdf file, it cancelled the fully-funded listing with no opportunity for the borrower to resubmit the documents. There have been many other Keystone Kops situations involving Prosper’s verification.

6) Related to issue #5, Prosper’s customer service is terrible. Often, they let the phone just ring and ring without answering it. When you send an email, the response is often irrelevant boilerplate. Lenders used to provide a lot of Prosper’s customer service for free on their old forums.

7) Prosper’s advertising is highly misleading in many ways, if not downright fraudulent. They overstate interest rates in ads directed to lenders, and understate them in ads directed to borrowers. Prosper was caught once apparently having photoshopped a screen shot of an actual listing in an advertisement about the rate (changing the actual rate to something more beneficial). Also, Prosper has repeatedly sent out mass email ads featuring borrower and lender testimonials that were quickly proven to be false. After the first time, Prosper admitted that it hadn’t verified the facts claimed by the person, and said it would do so in the future. But whoops, they promptly did it again (in a different testimonial) in the next ad.

8 ) Prosper used to have a vibrant community on its official forums, with about 400,000 posts. These forums were an amazing learning experience for lenders, so that new lenders could avoid the mistakes of their predecessors. Prosper banned me from the forums and from lending (although I had already publicly announced that I had stopped lending due to Prosper’s mismanagement) because I sent a bunch of PM’s to new lenders alerting them to the existence of Prosper’s own official forums. Then, the day before Thanksgiving, Prosper deleted its entire forum with no notice, in an effort to hide the truth from new lenders. It then replaced the old forums with a super-moderated version that is completely useless (every post must be approved before being posted, which often takes days even when the moderator lets it through).

9) When another forum member made an archive of the old forums available on www.prosperreport.com, Prosper had its lawyers send a threatening letter seeking to take the domain away on baseless trademark, unfair competition and cybersquatting grounds. Undoubtedly, Prosper figured this person would cave in and take down the site. Instead, he retained a lawyer from Public Citizen, who responded to Prosper’s letter by explaining how Prosper’s claims are entirely without merit. Both letters are posted on the site. Prosper has yet to respond.

(10) Prosper also misappropriated thousands of dollars of lenders’ money by charging its servicing fee on loans that were more than a month late, contrary to Prosper’s own legal agreements. This too was discovered by yet another forum member. Prosper admitted that its action was “in error,” but only recently returned this money to lenders despite having promised to do so months ago.

(11) Another significant issue is whether Prosper will even survive as a company for the three-year term of its loans. As can be seen on www.Lendingstats.com, loan originations have been essentially flat for the last nine months, and Prosper’s CEO has admitted that loan originations need to increase 400%-500% in order for Prosper to turn a profit. Given that, clearly the outlook is troubling. Although the Prosper Lending Agreement specifies that if Prosper goes out of business the loan servicing will be taken over by another servicing company, there is no guarantee that any such company can and will be found, or that the transition will go smoothly, or that the new company won’t require higher fees in order to do the servicing.

(12) Recently, a new potential legal problem has emerged — there is a question as to whether Prosper has been illegally selling lenders unregistered securities. This issue recently caused Lending Club (a newer Prosper competitor) to stop signing up new lenders and to stop selling loans to lenders while it obtains regulatory clearance. This issue has also resulted in Canadian P2P loan operations being shuttered. While Prosper has stated that it believes it is in compliance.

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Lend and borrow at your own risk!

Within everyone’s budget, there is a place for entertainment and usually the first place we go is Ticket Master to get the latest tickets for shows, sports and other fun things. Thats the good news, there’s something fun to do. The bad news is that Ticket Master is a borderline monopoly (anti-trust) and is completely pillaging our wallets with complete disregard. Smart Money has an indepth article about all of this but we wanted to show you the most important. and relevant notes about how to go about getting the best for your money (as well as things to watch out for):

1. Your confusion is their benefit. Go to the box-office, then try the biggest web reseller, then the second largest, Stub Hub, and then if that doesn’t work try Onlineseats.com. What an awful experience because as you move further and further away from the tickets themselves you pay more and more in charges. Buy a $10 baseball ticket and that puppy will come out to close $30 bucks. Stick with the box office.
2. What about Broadway? Theater tickets are a strange bird on their own due to the fact that they range from a few hundred seats to a couple thousand. Far less than an NFL or hockey game. This attributes to the sensitivity that is seen when a large number of tickets are snapped up to be resold. Again, you are better off looking for a box office or try Broadwaytickets.com. If you don’t mind waiting in line, there are TKTS discount booths in New York.
3. Sold out? Probably not. The more this idea is floated around the more people are willing to pay more. Regardless of what you read online, check with the source of the venue, and check back when outstanding tickets might come up for sale.
4. Careful of scammers. This is their bread and butter, they have something you want and are using tried and true methods to separate you and your money. Use a secure platform at least (PayPal might be one) and protect yourself.
5. Be ready. Scarf tickets as fast as you can from a known reputable vendor. Do the research ahead of time so you know that you are protected and that you aren’t going to get taken. And always be on the look out for counterfeit.

Milk Your Money is going to have exciting news in the coming days, be sure to stay tuned!

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In my seemingly endless travels in doing research for competitive prices of audio/visual equipment, I came across an interesting little revelation. It is a waste of money to pay the inflated prices of name brand HDMI cables. (HDMI stands for High-Definition Multimedia Interface and is used for almost all HD signals these days. See picture at right.) There is absolutely no good reason the average person should pay some of the insane prices that vendors like Monster Cable are proposing. Let me tell you my story…

I was at Myer Emco browsing around at different TV’s that my buddy was interested in and saw a rack of HDMI cables. Knowing that was going to be needed down the road regardless of whether we bought one there or another store like Best Buy, I was curious to know what they might go for. The first one I picked up was for 4 meters (don’t ask me why they are in metrics) and had a price tag of (ready?) … $175 dollars. For an approximate 13 feet of cable, it was $175. One hundred and seventy-five dollars. Plus tax.

Needless to say, I slowly put it back on the rack and backed away. Then I thought, well maybe it was a special cable or a typo. I walked around and saw the other prices were just like it. Outrageous. But what was even more mind boggling was the fact that there was a market out there for them. There was some sector or demographic of people that are getting suckered into buying these things.

I knew that I needed one, but I would have had to completely delete this blog due to the amount of shame I would have from making such a ridiculous purchase. So I went on Amazon and did a quick search for an HDMI cable. Guess how much it was for an off brand HDMI cable? 4 meters for $8 bucks, plus shipping. Now lets get into why it doesn’t matter what brand you buy…

To begin with, we need to understand the difference between analog and digital. Analog is like a radio signal, it is subject to interference and can be manipulated by varying degrees of tuning. A digital signal is made by 1s and 0s (known as binary) and works because of the concept that it is either on or off. Now I know, what about when we hear something that we know is analog (like speech, music etc) coming through a digital medium? Well a signal can be generated initially in analog, then converted to digital, and after it has arrived at its destination, it is converted back to analog. In fact, most things work that way.

So now we have a digital source (like a cable box or VCR DVR) that is outputting something (movie, TV etc) and we have a choice: transmit these signals to our TV by an analog cable or a digital cable. Remember the analog one is subject to any electromagnetic interference. You know how your listening to the radio and you drive by some one and its gets static until you pass? Thats interference. Would you want that going to your TV? Of course not. By using digital, we are able to have a (near) lossless signal. All those 1s and 0s start at one end of the cable, and for the picture (or whatever) to work you must have all those 1s and 0s arrive intact at the other end. THAT is why it does not matter what brand of cable you are using. Its a weird concept to be sure, but believe me, its true. If you were to take both the expensive cable and the cheaper one, you would not be able to tell the difference.

The one caveat that you could argue that this digital scenario might come to fault would be if you were running the digital signal through a cable that was so long that the power driving it ran out due to the inherent resistance in the metal inside the cable itself.

Don’t buy an expensive cable, get a cheaper one. I did it and can tell you that it looks just as good as any other. Check this out for more information from another perspective. $

It is becoming more and more common to use our computers to manage our money. There are now dozens of online services that pool all our accounts and present them in a fashion that is easy to read and that foster enthusiasm for saving, investing and having an over all feeling of well-financial being. (See #2, but the whole article is pretty good )

While these sites are wonderful, there is an inherent level of risk that must be taken into account. Its hard to imagine that there are people out there that want to get into your account and divert your funds into the fog of the internet cloud but they do. You are probably thinking “Well, thats some other person, not me. How could they find me out of all the people out there?” Its not hard. In fact its actually pretty easy.

With the internet connecting people everyday, all it takes for one person to figure out one little loophole, or little crack in some encryption. They might not do anything with it, but they will probably post it in order to show how good they are and bask in some sort of leet black-hat light. But there will be someone else who snags this script and just happens to know of a coffee shop that has an open connection (so that regular users can get online as fast and easy as possible) and boom, this new person is browsing your computer like the Sunday paper. Hope your passwords aren’t on there because they are getting copied.

Now this all might be a little extreme, but if you multiply by the number of people that don’t pay attention to what they are connecting to and the number of scam artists that are willing to try it, you get a pretty significant amount.

I am not saying that this will happen to everyone, just that it can happen to anyone. There are few things to protect yourself:

• Don’t check your accounts on a public computer. You don’t know where that computer has been and you don’t want your account displayed on a computer that has been with so many other computers. Gross.
• Be extremely wary of public internet access. Airports are very popular for hackers to sit and anonymously cruise just about any laptop connected. It literally takes seconds on an unsecured network.
• Only use encrypted sites. 128-bit encryption is the most widely used industry standard, look for a padlock on your browser or a change in color in your url bar. This can still be hacked with enough time and CPU horsepower. I have heard of servers that have 16 Xenon cores just sitting in the corner for this very purpose. Take the time to use complicated passwords with symbols and cApS!#$%
• Keep your spyware and anti-virus up to date. Its a little expensive but consider the alternative. One of the most common and easy to use is keystroke capture app. These are legitimate programs that can be stripped down and covertly loaded onto almost any machine. Then the keys are dumped into a small, simple text file and sent to the originator. That’s it.
• Don’t click links that come in your email. These will be asking you to log in and “update your information” and the site looks completely real. Technically, they almost are. They are linking to the real images and using CSS and HTML right from the real site but have changed the domain name a tiny bit. Hover over any links to see where they really go. The best thing you can do is go to the site manually and check with the fraud department. It takes about 4 seconds and they will be happy to tell you that you are looking at a scam and could you please forward it. Along with all the other billions that get sent. Just be one of those billions that hasn’t had they entire accounts drained.
• >>HALLO DEER SIRE. I AM FROM A COUNTRY YOU HAVE NEVER HEARD OF AND ITS A STATISTICAL MIRACLE THAT I FOUND YOU. I AM OF INSANELY RICH ROYALTY AND WOULD LIKE TO USE YOUR ACCOUNT TO TRANSFER SUM FUNS IN THE AMOUNT OF $324,543,654,232,987,234.00 (SAME AMOUNT IN WORDS OR VICE VERSA) TO YOUR ACCOUNT FOR TAX PURPOSES. YOU WILL GET 20% FOR THESE SERVICES, PLEASE SEND ME YOUR INFO AS SOON AS POSSIBLE. BLESSINGS UNTO YOU AND YOUR FAMILY.<< Honestly. Really? This is still working? How?

These banks and brokerage firms are not required to reimburse you, so be careful out there. Use caution, common sense and a little due diligence and you will be better off as well as better financially protected. Let me know what you think. $

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Today I would like to reflect on one of my most infamous purchases. This was a long time ago and has since drilled some nice principles into my spending habits and the way I spend money. I still make mistakes now and again but this was one of the first that really hit home that I needed to change my financial life style. There have been other milestones but this was by far the dumbest thing I have ever paid money for. I feel as though I am far enough past it in order to not only talk openly about it but to try and provide some insight to others who might inadvertently make the same mistake I did. Being that it is also for DebtKid’s (Dumbest Purchase) Contest, it seemed like an appropriate time to bring such a painful memory.

I was a sophomore in college and was receiving financial aid out the wazoo. I had the advantage of not having lucrative income from my parents and that caused my FAFSA to tell the government that I was in a bad way and needed as much as the tax payers could swing. Naturally this left me with a fair amount of “extra” disbursement to afford books, food and rent.

The day after I got a whopping check for $2,011.76 I felt that I needed to spend it as soon as possible. (Of course, if I had said this to myself now I would think differently, but I digress…) What does a young male in a college town need more than anything?? Why a vehicle of course! And not just any vehicle, but something cool.

My college town was surrounded by two things; farms and “mom-and-pop” used car lots. At first I thought that I would simply go with the run of the mill pick up truck like a good majority of my friends and then I saw it.

A silver 1985 Fleetwood Cadillac. Complete with velor bench seats, all electronic controls and enough trunk space to smuggle the population of Mexico, if only my politics would allow. That car was absolutely beautiful. I quickly asked if I could take it for a test spin. It was like driving a cloud. So quiet it was eerie. There were seemingly no bumps in the road and it had a nice old school feel that made it seem like I had been driving it for years. I got about 3 miles down the road and made a silky smooth U-turn with the thin steering wheel turning loosely like it knew what I was doing and drive it right back to the car lot.

“How much?” I asked as I got out. The car salesman said “Well I’d say about $2,000.” I knew that I was going to need a bit for the tax and title so I said, “I’ll write you a check right now if we can do $1,700.” “Yea I think we can do that.” This boat was mine!

I drove it for about 2 weeks and had no trouble justifying to myself that 3 miles per gallon was not a bad deal and the strange lights flashing on the dash board were a throw back from the paranoia of the Reagan Administration due to the Cold War. I saw past any scratch that seemed to slowly appear and couldn’t help but drive it even when completely unnecessary to do so.

November came and I needed to drive down to Raleigh to fly home for Thanksgiving. I was excited because I was going to cruise in the Fat Caddy, and listen to the old tapes I had no other use for. I can only look back on this time in my life and shake my head.

Upon returning back from visiting family, I began the 2 hour drive back to my apartment. About 20 minutes after being on the freeway, one of the mysterious lights on the dash board began to need more and more attention. Lights were beeping and lights were flashing like some sort of bad emergency situation on the space shuttle. What in the world could be the issue? Then the beeping stopped. Whew what a relief! This miraculous car had some how healed itself! Not even five minutes later a beeping ensued like I had never heard before. It was urgent, pained and very unhappy. Then that beeping stopped. Not because of some deity-like intervention.

The car had shut off.

So there I was cruising down the interstate slowly going from about 70 to zero with no power steering at about 8:30 at night in a state where I knew no one.

Luckily I still had a working battery and some genius had put a bulb under the hood so I could take a gander at what started all the ruckus. Billowing sweet smelling steam was filling the roadside and I thought perhaps that a hose had just come off. A little further inspection showed that a hose had split. I walked to a gas station about a mile away and bought some duct tape and bottle of cheap conditioner and went in to MacGyver mode. I emptied out the conditioner, wrapped it around the house after cutting it, and duct taped the day lights out of it and got back on the road.

The plastic on the bottle and duct tape quickly melted from the insanely high temperature and I repeated this process trying different things over and over. I got home about 8 hours later, at about 4 AM.

The car was still drivable to me. I couldn’t drive it for more than 10 minutes before it over heated and the mechanic said that it was going to cost more than $500 to fix. But it was a small town and as long as I didn’t go far, and no one complained about the incredible amount of smoke it was producing, I would be fine. The mechanics diagnosis was a cracked cylinder head from over heating and he said that it would eventually seize and ruin the block. What did he know? It still drive fine in short spurts!

A week later it “seized.”

So now I had a car that I couldn’t drive, couldn’t fix and had a hard time looking at due to the betrayal I felt. So I parked it in front of my apartment and left it there for the better part of a year. Eventually the registration tags ran out and the tires rotted and it became an even worse sinking ship. That’s not even the end of this story.

I woke one day and happened to look out and saw that the car was gone. I called the tow company and they said they had towed it due to “complaints and that it had obviously been deemed abandoned.” I could hardly blame them, it was in sorry shape and had seen fairer days, but honestly they could have just asked.

Of course I had no money to get it out car jail, and had just gotten a Jeep Cherokee that my mom handed down, so what did I do? I signed over my title to the car towing company. It was a $70 towing fee that I traded that Cadillac for. I spent just under $2,000 and then paid to have it given away.

Please keep your comments gentle as I still look upon other Caddys as something special, and this is a bit of a sore subject for me. It was also an incredibly valuable lesson. I drove that Jeep for over 10 years, across the country and back, twice, and had every maintenance check done to it that I could. I plan on driving my current vehicle for even longer. $

MoneyCrashers.com has an article a list about a few principles regarding money and we would like to address them.  Over all, its a great list.  Feel free to comment!

1.  Always spend less than you make.
Naturally, this is in first place as it keeps the saver moving in the right direction, regardless of how fast or slow.  By setting up a budget and keeping to it, your options down the road are far more substantial and lucrative.  Lets face it, if you even want to stand a chance of reaching your financial goals, spending more than you make will never get you there, so stop it! 

2.  Do not believe in money myths.
Research, research, research.  Take everything with a grain of salt and don’t believe anything until you have read or heard from either the source or someone equally reputable.  There are a great deal of myths out there dealing with money and of course if a deal sounds too good to be true, you can bet that’s the case.

3.  Get out of debt and stay out of debt.
This is most important in the early stages of getting on the right track with your finances.  Always keep this in mind when contemplating purchases.  The best thing to consider, I feel, is to explore the long term effects:
     a) Is there an interest rate?  If so, for how long?
     b) Will this put me into debt or overdraw my account?
     c) Can I live without this item for two weeks or is it an impulse buy?

4.  Save money for the unexpected
Murphy’s Law states that if something can go wrong, then it will.  Life pops up sometimes and really gives it to us and we have a responsibility to be prepared.  There’s no reason not to prioritize an emergency fund.  You will be glad you did and you will then have ample time to rebound from it successfully.  Remember, it is probably better to make payments on a debt and keep a couple thousand in the bank, than it is to withdrawl the money to pay down the debt. 

5.  Pay for education with cash.
We could probably write a whole other site on student loans, or at least a few posts.  Student loans are normally taken when a student is excited and has a ”fake money” approach to borrowing because payments are deferred and its one of those “out-of-site-out-of mind” type things.  Well, those loan companies are going to come looking for all that money about 6 months after you graduate.  One of the worst things for your credit is to default on these loans.  Be diligent about it and take any extra disbursements and give what you can right back.  You will actually save yourself quite a bit of money in the long run and have a huge leg up on your net worth.

6.  Find creative ways to boost your income.
Another quote I like is “What you do on Saturdays is what puts you ahead of the competition.”  Is there anything you can think of that you do really well?  Write about it!  Even the tiny trickle you can get from Adsense will pay for it and you will learn a great deal?  What about eBay?  Is there anything you can sell?  You might even buy certain things and resell them for a profit.  There are about 40 trillion sites out there dedicated to this very topic.  The idea is that we are all given time but it comes down to what we devote our time into.  Preferably, it turns out to be lucrative. 

7.  Invest for the long-term and keep it simple.
Automatic investing will be your best friend for this.  Find out what monies you might be able to live without and get it deposited into something.  Even if your parking it at first, as long as you eventually get that money working for you, you will be far, far better off than if you hadn’t.  The important thing to remember is to NOT touch it.  No matter what.  Even if its in the stock market and the value drops:  Don’t be emotional about it, have faith.  Remember that for long-term investing, a drop in price is actually good: Its on sale!  We also recommend heavy research in stocks unless its an index or ETF.  Google Finance is a great free tool.  Consider reading an early post on the subject titled, “When the Market Falls, Don’t Panic.”

8.  Educate yourself about real estate, cars, and financial products.
A little redundant since we already talked about doing tons of research, but this also refers to investing in yourself some.  With knowledge.  Being an informed user of real estate, cars and other financial products can only benefit you.

9.  Avoid scams and financial predators.
Your bank has not lost your account information.  There is absolutely no one in Nigeria that needs your help moving millions.  Any email that inquires for you to log in right away is trying to spoof your identity and walk off with all your hard earned money.  Be wary of links that don’t match when you hover over them.  Its very easy to have a link say one thing and go somewhere else and pull the images from the real site.  When you suspect something, close the email or browser and go to the actual sites: if its for real they will put a message on the main page of the site.  But for the most part, be skeptical and educate yourself.  Getting your identity stolen is an awful violation that you need not be a part of.

10.  Give, Give, and Give more.
I would say that this applies when you have some extra money and are aggressively maintaining assets that have no place to go.  When would this happen?  Well keep in mind that there are those that are not as fortunate and it feels good to give.  Just be sure that you won’t be hurt financially by it, in the sense that it can cause debt or missed payments.  Giving when appropriate will also be your friend during tax time.

11.  You and your spouse are a team!
One of the leading causes of divorce is due to money.  You have to be united to be successful; not just in money but in most things.  It can strain a relationship where you are working hard toward a goal and your significant other removes all your progress with what seems like carelessness.  Communication is key here.

 Any thoughts on this?  $