I am not kidding, the title doesn’t lie.  That is absolutely what happened to me a few weeks back.

I have been trying to get rid of superfluous items in my life and that includes clothing.  I don’t know if i could ever give up as much as Colin has over at Exile Lifestyle and have such a small wardrobe, but i think a good purge every once in a while is a satisfying experience.  Most recently, i was cleaning out my closet and stuffing items into a garbage bag for when i would eventually bring them to Goodwill.  I am not sure why, but for some reason i felt the urge to check the pockets in one of my old pairs of jeans.  What did i find, 2 slightly laundered Andrew Jackson’s!  I was giving away clothes for free, and all of a sudden i was $40 bucks richer.  There was no better story i told to friends for the next few weeks.

It may seem like a waste of time, but think about it; if you are giving these clothes away, odds are you haven’t worn them in ages.  Do you really remember if those pockets are empty from the night you went out clubbing 8 months ago?

Be smart, check your pockets, then donate those items.

What a week this has been.  Since the blogger happy hour last Thursday, my life has gone in all sorts of weird directions.  Lots to tell and it all ties into personal finance.  Things get better as you scroll down, so I hope you pick up on my excitement.

Plutus Awards

First, and most importantly, I want to tell you that I have been honored with probably the coolest thing since I have started blogging.  I was nominated for two Plutus Awards (twice for one award!)

The Plutus Awards were put together by Flexo of Consumerism Commentary and are going to be awarded to the best of the finance world.  There was an entire section and several categories devoted to blogs and bloggers.  A lot of my favorites received several nominations.  Congrats to each of them.  Voting begins today, so take a look below at the categories that I was nominated for along with some really amazing competiton.  I am truly humbled to be associated with these great writers.

Plutus Award Category: Best Multi-Part Series

• Blogger Showdown (Budgets Are Sexy)
• Core Tenets of Get Rich Slowly (Get Rich Slowly)
• Friday Financial Foul Ups (My Next Buck)
• Myths (Financial Highway)
• The Spectrum of Personal Finance (My Next Buck)

Plutus Award Category: Best Kept Secret Personal Finance Blog

• Carrie… On the Cheap
• Eliminate the Muda
• My Next Buck
• Out of Your Rut
• Frugal Zeitgeist

Best of luck to all of those nominated in these categories.  I am super excited to be in such amazing company.

Becoming a One Trick Pony

This past weekend, I quit a job for the first time (delivering  pizzas doesn’t count… my car got totaled).  Effective Monday, I am no longer a concierge at the apartment building.  Its kind of a shame, but I have made some great friends there and surely have some memories.  After 20 months of 7 days a week without a day off, I am happy to try and reclaim some of my mid-twenties back.

Unfortunately, I am reminded of a Henry Rollins spoken word bit where he rants about people saying they want to “catch up” on sleeping or “catch up” on reading.  He went on to say something to the effect of you, “You can’t take each day for granted.  You either sleep or don’t.  You either read or you fuckin’ don’t.  You can’t ‘catch up’.”  Makes me feel a bit like “reclaiming” my mid-twenties is an impossibility. At least I have no debt and a lot of mutual funds to show for it.

Taking That One Trick and Hoping to Improve It

As of this morning, I have given my notice to my actual 9-5 employer that I am no longer going to be working for them after two weeks.  I am moving to a marketing agency to work in their marketing intelligence department!  I am really excited about this opportunity as it will give me a whole new skill set and allow me to use my brain in a way I haven’t since late in college and grad school.

One thing to note is that I will be a contractor for the time being at this position.  Which means I am self employed.  I want to give a big shout out to Cash Money Life and Money Blue Book as I used their information about estimated taxes and self employment taxes when making my decision to take my career in this direction.  You will see a lot more writing about how to truly live as a self employed individual.  I will talk about my quest for health care and dental coverage, filing estimated taxes, writing things off, etc.

As you can see, its been an exciting couple of days.  Forgive this being a week with only this post and a Foul Up on Friday.   Things are just a bit hectic and show no signs of calming down.

I won’t call them goals. They will be achieved, somehow, someway.  The journey for implementing most of this plan will not be all that interesting.  Here are the big components for the 2010 plan.

• Max out my 401(K) with my employer
• Max out my Roth IRA
• Build enough extra income that I can still survive

Building that income will be things that you hear me blog more about this year.  If i can make extra income, that means you can as well.

Additionally, I will be working on becoming a better blogger, which sounds vague and broad, but i have a map written out on how i plan to achieve this.  If it works, the results will be noticeable and i will write one of those “How to be a successful blogger” articles.

I hope everyone had a happy and safe new year.

Friday’s discussion was about making your money work for you with high-yield savings accounts.  Today, I will go through all of my own personal accounts and the benefits that each offer their customers (I will even touch on what funds I have invested in).  You can use my accounts as a guide for making your own banking decisions.  If, after reading, you have any questions about my accounts or similar accounts at other institutions, feel free to leave a comment or get in touch with me at bscheur@gmail.com.  Here goes!

Checking Accounts:

I have two checking accounts.  My first account is with a brick and mortar bank (M&T Bank), it’s a no frills, no minimum balance, no-fee account.  You should never pay a fee for a standard checking account.  If you are unsure if you are paying a fee, call your bank and find out.  I keep almost no balance in this account.  Its sole purpose is to be a convenient place for depositing cash and checks, and to transfer money to my “real” checking account.

My “real” checking account is an Electric Orange Checking Account through ING.  This account links seamlessly with my savings accounts (discussed below) and offers a .25% interest rate. Considering there aren’t many checking accounts that offer interest, this is a great deal.  Also, there are no ATM fees at over 30,000 ATMS throughout the country (only catch is you need to know which ATMS waive the fees, but if you don’t deal much with cash, this isn’t a big deal), electronic checks that can be sent via e-mail, or paper checks that can be mailed at your request.

Savings Accounts:

I love my ING Direct Savings Accounts.  I say accounts, because I technically I have more than one.  ING Direct Savings has a feature that has yet to be matched by other institutions as of yet.  This feature is the ability to open up “sub accounts”, giving each a specific name so you can keep track of separate savings goals.  For example, I have a primary savings account, and additional savings accounts for the following goals: a trip to Rome, a new car, a down payment for a house, and next year’s taxes.  Each of these accounts earns 1.5% in annual interest.  This rate is not the highest out there, but it is competitive compared to all the other online banks.  The “sub account” feature keeps me focused on specific goals, and for me, that’s worth a little less interest per year.

Credit Cards:

I have three credit cards, the first being my Chase Visa that I opened when I started college.  There is a $1,500 limit on the card.  This card doesn’t get used other than a $10 subscription each month, but I keep it open to increase my credit score as this is the card that I have the longest history with.

My next credit card is my American Express Blue.  This card has a $25,000, however, I have stopped using this card as I was only earning Amex reward points.  When I was looking to optimize my credit cards a few months back, I decided that the reward points weren’t as valuable to me as cash-back, hence this card also has only a $10 subscription being charged to it each month.  With such a large credit limit, this card helps my credit utilization score on my credit report, therefore will remain with me for some time.

Lastly, my new credit card, and now the only card I carry in my wallet, is my Schwab Invest First Visa Card.  This card has a $7,500 limit and offers me 2% cash-back on all purchases, with no international fees.  The 2% gets deposited into my Schwab Brokerage account (discussed below) and automatically invested into which ever fund I choose.  I am excited that I have this card, and it will be the only one I use on a regular basis moving forward.

Brokerage Account:

As mentioned above, my brokerage account is with Schwab.  Schwab’s low cost portfolios were perfect for a novice investor such as me.  I was able to open up the brokerage account with no minimum deposit because I opened up a Schwab Investor Checking Account at the same time, even though this account doesn’t get used.  I am currently only investing in one index fund, Schwab’s S&P 500 Index Fund that closely mirrors the S&P 500’s performance.

Roth IRA Account:

My Roth IRA is set up through Vanguard.  Vanguard is known for the lowest fees around, and since I will be putting $5,000 a year into this account for as long as I am eligible, the small fees are very attractive.  Furthermore, Vanguard has target date retirement index funds, allowing me to pick a fund (Target Retirement 2050) and let the fund diversify itself according to what is best for my current age in relation to my retirement.  For example, since I am only 24, the fund is stock heavy (90% ) because I can afford to be riskier with my investments.  However, when I am 50, it will look drastically different and may only be 65% stocks and 30% bonds and 5% cash reserves.  This rebalancing happens automatically, making this a stress free investment that will follow the market through its ups and downs (hopefully more of the former than the latter).

401(K) Account

My 401(K) is not officially active yet.  I become vested with my current employer on July 1^st, so look for a 401(K) article around that time.  I do know that I will be working with Fidelity come the 1^st, and I am excited to learn about the specific funds they offer (target retirement date funds – I hope!)

My accounts are very straightforward and simple.  However, they offer me all the flexibility I need to change my savings strategies and my investment strategies if the situation should arise.  My credit cards are focused on returning me the maximum possible rewards.  Another significant aspect of my accounts is the ease of the web-interface for each bank.   Each one is very easy to use and offers great customer service.  Prior to setting up an account, I do a trial run to see how long it takes to get a representative on the phone in the middle of the day.  I have never had to wait an exorbitantly long time for any of these institutions.  Because of their customer service, rates, and rewards, I felt it was important to share how my finances are set up.  Are there other institutions that I should look into or institutions that other readers are happy with?  If so, leave a comment or contact me here.

How much interest is your money in your bank account earning?  Do you know the percentage?  Odds are its some fraction of a percent that isn’t worth recognizing or remembering.  This is where economists freak out, because many of us aren’t acting as rational entities and aren’t maximizing our wealth/earning potential via the resources that are abundently avaialable to us.

For example, about a year ago, I opened up my first savings account since I was in middle school.  I called up my bank, which I had been with for years and told them I wanted to open a savings account.  They said they had a great account for me, called a “relationship savings account”, because I had a checking account with the bank.  They ran through all the benefits and the Annual Percentage Yield of .05% .  I said, “umm, ok” and opened the account.  This is how traditional banking is done.  However, why be traditional when we are in the age of computers, the internet and online banking!

When I started to get serious about my money, I started to read all sorts of articles discussing high-yield savings accounts (accounts that were earning as much as 2.5% at the time).  2.5% ! That is a 50 times higher return than the “great account” my local bank set me up with.  I started to shop for a new bank that day.  The catch here is that the majority of banks with high-yield accounts are online banks.  There is some trepidation towards putting money into an online bank.  Many people feel their money is disappearing because it has become “digital”.  Well, for the people that are concerned about such things, they should know that over 90% of the american money supply is digital money.  Also, the big online banks are FDIC insured, which means your money is insured by the government up to $250,000.  These online banks can offer such great rates because they don’t have the large overhead that comes with having local branches, allowing them to give extra benefits to their customers.

So, it would seem rational to make a transition from your brick and mortar bank to an online bank for your savings account.  The next question is, which one or where do I find the right bank for me?  Well, I have an assignment for you over the weekend.  Go and take a look at this fantastic post written at Get Rich Slowly this week.  JD has done all the grunt work for you, all that is left is to take your pick and open an account.

Moving money into a high-yield account is a great start to having your money work for you.  If you don’t have much money in your savings account at the moment, don’t worry.  Even a few extra dollars a year is likely better than what you would have been getting at your brick and mortar bank.  The idea is to build wealth, and once you have enough capital, you will see that the returns from these accounts can be substantial.

Check back here on Monday to see which accounts I have set up and why.

Have a great weekend.

Last night I had the pleasure of listening to the Personal Finance Hour live for the first time.  This show, hosted by JD Roth of Get Rich Slowly and Jim Wang of Bargaineering, offers an excellent weekly discussion on all topics personal finance.  This week’s show topic was about making extra money.  The enthusiasm of JD, Jim and the live listeners was palpable with lots of activity in the chat room throughout the show.  Additionally, there were plenty of callers to chime in about how they make extra money.

Ashton Kutcher sporting his John Deere hat

The show started with Jim discussing how he took advantage of the John Deere hat fad in the early 2000’s made popular by Ashton Kutcher.  While Jim was in college he went and purchased these hats for $12 or so and then turned around and sold them on eBay for $30-$50.  Jim stated this was the first time he caught a trend as it was coming into its own and he made a significant profit from the reselling of these hats.

The calls started and Adam from Man vs. Debt, called in from his new home in Australia.  He discussed if he and his family moved again to another location, they would look into teaching English as a second language.  This is a great idea if you want to travel and live in another country for an extended period of time.   In some areas teachers are treated so well that the schools will even pay room and board while you are working for them.   What makes this an intriguing opportunity is that teaching English in a foreign country may not require you to know the native language.   Overseas, we Americans have a marketable skill in our ability to speak English.   Taking advantage of your marketable skills is the best and easiest way to make extra income.   (Best of luck to Adam and his family if they make another move.)

Next Martha, Jim’s wife, called in and discussed the benefits of finding a hobby that you can make money with.  Specifically, Jim’s sister makes jewelry on the side of her teaching career and sells them on Etsy (allthatglistens.etsy.com) as a way of making some extra money.  Martha further mentioned the idea of selling items at a flea market if you have a good that may have a niche market that people are willing to pay for (canned goods, dog biscuits, etc.).  JD mentioned later in the show another hobby that could become profitable, photography.  Selling your photos to friends, at a flea market, or to magazines could be a way to subsidize your photography hobby.

Fortunately, I had the opportunity to get on the show and discuss the methods I have found to make extra cash.  I detailed all of my side jobs from delivering pizzas, working as a concierge at an apartment building, and working for credit towards my hockey league fees as a scorekeeper for the league.  JD and Jim agreed that working so many jobs can be stressful, but when you are goal driven (paying down debt, building an emergency fund, maxing out your Roth IRA) working so much may be an easier pill to swallow.

The next caller called in and discussed sales jobs, or commission based jobs, that can provide extra income on the side.  Neal, the caller, closed with an interesting example and a very smart point.  He says his skills lay within the framework of sales and salesmanship, however he is not someone to come up with ideas the way Jim did earlier with the John Deere hats.  I believe that what Neal said is very profound, as I don’t consider myself to be an “idea” person either, but I feel I am the “go get it done” kind of guy.  Neal is someone that is a “sales” guy and Jim (in this example) is an “idea” guy.  It pays to know your strengths and then to try utilize those strengths to better position yourself for future opportunities.

Jim and JD spent a moment after Neal’s call to mention that one should be weary of multi-level marketing sales jobs that may require you to purchase the items prior to selling them.  Furthermore there are networks that require you to pay up front for the opportunity to sell their goods or take part in their money making schemes.  All of these types of opportunities should be entered into cautiously and with deliberation.

The next caller discussed a website called JustAnswer.com.  JD’s wife actually wrote a post about this site a few weeks ago.  The service works by having people ask a question and then bid for an expert to answer their question (usually $7-$15 per question).  Becoming an expert in a specific area requires an aptitude test, but according to the caller, an expert can make around $50 a day by just answering questions in an area in which you are proficient.

The final caller asked Jim and JD for ideas on how to make his passion of television and video into a money making hobby.   They offered great advice by saying that he could try and become a wedding videographer, or better yet, to try and find someone that would allow him to take up an apprenticeship.   This would allow him an opportunity to learn while not having to pay the large overhead of equipment, etc.   Additionally, he would have the chance to build a portfolio to better market himself in the future.

The Personal Finance Hour is a fantastic show, but this episode was firing on all cylinders.   Surely JD, Jim and the listeners could have continued for another full hour without missing a beat.   If you haven’t been following the show prior to last night’s episode, here is the list of topics that have been discussed to date:

• Emergency Funds
• Finding Balance
• Coupled Finance
• Buying a Car
• Travel Tips
• Gardening
• Pets (Cats, Dogs, Bears, oh My!)
• Starting and Entertaining a Family
• Finding a Financial Planner
• Frugal Weekend Ideas

This podcast has real value for those that are just starting to become interested in personal finance, or for those that are always looking to build upon their wealth of knowledge.   Jim and JD are entertaining and offer advice based on experience and sound financial strategies.