Goals for GIVING: How to execute better in 2010
Many people DESIRE to give.
Many people PLAN to give.
But many folks, despite meeting other financial goals in their life come year end, FAIL to meet charitable giving goals purely because they do not know what organization to give to. As a result, they may simply scramble and write a check to the first charitable organization to call them the last week of December, or send a check to a national well-known organization that they trust.
Others without a giving plan may fail to give because they find themselves spending money they had initially intended to give to a charitable cause. Or, maybe they have not spent it and intend it to be for giving, but by not giving in the current year they lose the tax deduction benefit until the year in which they make the gift.
Uncertainty about what organization to give to should not prevent individuals from setting aside the dollars that they intend to direct to charitable causes. The use of a donor-advised fund is, I believe, an excellent solution to the problems discussed here.
A donor-advised fund is a type of account that allows you to donate money into the fund NOW, and let the money sit in the fund (and even grow with interest) until you decide where to “advise” the fund managers to “direct” the funds. Obviously, if you have a regular organization you are giving to then there’s no need to go through this process, just give directly to the organization. But for periods of time when you wish to budget and set aside funds that will be given to an organization of your choosing LATER, the donor-advised fund is an excellent option.
Think of a donor-advised charitable fund as something more structured than off-the-cuff immediate giving, and yet less structured and complex than a foundation. Many foundations, in fact, are beginning to transfer their assets into these charitable giving funds to reduce their administrative and record-keeping burden.
If you regularly give 100% of your planned charitable giving in the same year in which you set aside those funds, then a charitable gift fund may not be right for you. As always, you should consult a financial planner or other professional that you hire to advise you based on your particular circumstances. However, I hope this overview of donor-advised funds below provides a strong introduction to this financial tool.
There are several KEY ADVANTAGES of the use of donor-advised funds:
1. It gets the money out of your checking account – With a donor-advised fund, you can make periodic contributions if you wish. Make your regular contributions correspond with your paycheck frequency, for example, if you want an easy way to budget your charitable giving. By providing a way of getting the funds out of your checking account (despite not yet knowing where you will ultimately direct the funds), it helps you live up to your giving commitments and keeps you from spending the money before you realize it.
2. You realize a tax deduction in the current year – By “donating” the funds to the donor-advised fund in the current year, you are able to claim a charitable giving tax deduction, according to current IRS law, in the current year.
3. Give when, and to whom, as you feel is appropriate – By setting aside these funds and realizing the tax deductions on those donations now, you can be released from the pressure of deciding NOW how to give, and wait until you have identified the right organization, and timing, for your giving.
4. Most charitable funds allow you to invest your donor-advised funds until you are ready to recommend a grant – By investing the money inside your donor-advised fund, you should realize growth, exempt from taxes, of those funds until you are ready to instruct the charitable fund to issue a “grant” of funds. Not only does this help to offset any effects of inflation on those monies, but the growth you experience in the fund through investment returns will also help to offset the minimal fees associated with operating such an account.
5. Donate non-cash assets. Not only can you transfer cash into a donor-advised account, but you can also transfer real estate, business interests, restricted securities, and other non-cash assets.
Here is the BASIC PROCESS of setting up and using a donor-advised fund:
STEP 1: SELECTING A DONOR-ADVISED FUND PROVIDER
There a number of charitable fund organizations that allow you to set up a donor-advised fund, including most of the major brokerage houses. To illustrate differences between the features of various charitable fund organizations, I have created the chart below to demonstrate fee and minimums differences between three of the more popular charitable funds. As you peruse the chart, the following definitions may be of help:
Minimum Initial Contribution: This is the minimum amount you can donate to open a fund. If the amount is a bit steep for you, then one approach to take would be to, possibly in addition to your normal giving during this year, save up the amount over the course of this year that you plan to give NEXT year, but instead donate it to the fund at the very end of this year, thereby ensuring that you get the tax deduction in the current year.
Minimum Subsequent Contributions: This is the minimum amount of future donations to the fund. If you find it takes a few months to save up $500 or $1,000 towards giving, then a charitable fund may not be appropriate for you if you struggle to keep those funds set aside while saving up for the minimum.
Minimum Grant Amount: This is the minimum amount of money you can request the charitable fund to “grant” on your behalf to a qualified organization of your choosing.
Annual Fee: Most of the charitable fund organizations charge a fee on your fund balance, on a sliding scale basis that typically DECREASES as the size of your balance grows. Most charitable funds assess 1/12th of this fee on a monthly basis based on the average fund balance during the month. For example, if your fund charges 0.60% on the first $500,000 in your fund, and you have $25,000 in your fund throughout an entire month, the fee charged against your fund at the end of the month would be 0.05% of $25,000 (1/12th of 0.60%), or $12.50 for that month. Also, see Step #4 below for a further discussion on investing inside of your charitable fund. You may also wish to question the organization you are considering selecting to determine if there are other fees related to grant distributions, etc.
A COMPARISON CHART OF 3 CHARITABLE FUND ORGANIZATIONS
In our family we decided to select the Schwab Charitable Fund for a number of reasons – we liked the ability to invest the funds in our donor-advised account, their fee was comparable to other organizations in the market, and also for the fact that we had other IRA’s and brokerage accounts with Charles Schwab and so it made for an easier logistical setup for fund donation, etc.
STEP 2: SETTING UP YOUR DONOR-ADVISED ACCOUNT
Once you have selected the charitable fund organization you wish to use, simply download the application from their website, complete the application, and submit to the organization with your initial contribution. NOTE: It is important to get more information from your charitable fund about their process of approving charities before you commit to opening a fund; see Step #4 below.
Remember, any money you donate to the account is deductible in the year of the gift. Also, remember that once you have transferred money to the donor-advised account, you no longer have rights to the funds — you have given those funds away for all intents and purposes, even though you retain the ability to invest the funds and direct the funds to qualified organizations, as you wish.
Pretty straightforward, right?
STEP 3: MAKE SUBSEQUENT DONATIONS TO YOUR DONOR-ADVISED ACCOUNT AS YOU WISH
As you wish and have funds to do so, you can make subsequent donations to your donor-advised account any time you wish, as long as that additional gift meets the minimum required by the charitable fund organization you are using.
Your fund organization will very likely allow you to set up automated gifts through automatic transfers from your checking or brokerage account. You can also always send in individuals gifts however often you wish. However much and howevre often you contribute to this account, doing so is a key practice in reaching your long-time giving goals.
STEP 4: INVEST THE FUNDS INSIDE OF YOUR DONOR-ADVISED ACCOUNT AS YOU WISH
As described earlier, most charitable funds will let you invest the funds inside of the donor-advised account in various mutual funds.
Many charitable funds allow you to invest the donated dollars that are sitting in your donor-advised fund; these monies can be invested in mutual funds with varying levels of risk and expected return. These individual investments within the fund will carry fees with them, like mutual funds or investments in any brokerage account would, so make sure to keep that in mind.
As described earlier, investing these funds will help to offset any effects of inflation on those monies, and the growth you experience in the fund through investment returns will also help to offset the minimal fees associated with operating such an account.
If you do not anticipate holding the monies in the fund long and expect to give them quickly, then simply keep them in “cash” form inside the fund and avoid these investment fees. You will of course be also foregoing any investment returns that may have occurred during that time.
STEP 5: RECOMMEND “GRANTS” TO BE MADE OUT OF YOUR DONOR-ADVISED ACCOUNT
When you wish to give to an organization, you will simply notify your charitable fund either by completing a form online or submitting a hard copy form. Most national organizations will already be on the charitable funds “approved list of charities”. You should expect to be able to give funds to any 501(c)(3) non-profit organization. Additionally you can give to educational institutions and religious organizations, even though many religious organizations may have a “de facto” non-profit status though they are not all required to have filed for 501(c)(3) registration. It is important to get more information from your charitable fund about their process of approving charities before you commit to opening a fund.
Once you “recommend” that your charitable fund send a “grant” to a qualified organization, you can expect them to do so quickly, within a matter of days. Remember that even if the charitable organization that is given to erroneously claims your gift is tax-deductible and includes that grant in their statement of your giving that they provide you at the end of the year, that is not actually possible. You received a tax deduction once when you donated the funds to your donor-advised charitable fund; you cannot receive a second tax deduction when the charitable fund grants the charitable organization some of those dollars.
CONCLUSION
Giving, like so much else is life, is often simply a matter of developing a plan and executing on that plan.
Donor-advised accounts offer an easy, accessible way for individuals, families, and even corporations to budget their giving on an ongoing basis, ensuring that tax benefits are accelerated and most importantly ensuring the funds are directed out of one’s hands and into an account that can only be used to later give those funds in a charitable way.
The issue of “What Organization Should I Give To?” is ALSO an important question, but also very different from one person or family to another, and is too big of a question to be covered here in this blog post.
It is my hope that readers of this post now have a better understanding of an innovative way of executing their giving plan through the use of donor-advised charitable funds.
Intriguing quote from Adam Smith
I’m reading Going Broke: Why Americans Can’t Hold on to Their Money by Stuart Vyse. I have just started the book but I suppose I will eventually write a summary/review of the book here on my blog, but in the second chapter today, I encountered Vyse’s quoting this famous passage from Adam Smith’s Wealth of Nations. Vyse provides some supplemental explanation with it — I thought it would be worth reproducing here:
“The man who borrows in order to spend will soon be ruined, and he who lends to him will generally have occasion to repent of his folly. To borrow or to lend for such a purpose, therefore, is in all cases, where gross usury is out of the question, contrary to the interest of both parties.”
Loans for the purchase of durable goods or investment in business or production, on the other hand, had the potential to produce wealth, so these forms of lending were acceptable.
As Vyse goes on to explain, in Smith’s view of a healthy economy lending was permitted, but was only considered ideal in cases where the lending was done for the purposes of enabling production.
It is fairly ironic the Adam Smith’s thoughts and economic theories are widely referenced and his advice followed by many free market capitalists in the United States and elsewhere, and yet clearly business leaders nor the general population has taken his advice in this matter. He calls the habit of lending for the purpose of spending “contrary to the interest of both parties”. BOTH parties! The recent economic meltdown, featuring headlines chronicling past years of mortgages gone bad and credit card debt handed out flippantly shows us what happens when both parties ignore this advice. Not only are consumers’ finances ruined, but ultimately the lenders are affected as well.
Barnes & Noble’s nook device – proposals for better lending
Barnes & Noble’s highly anticipated ebook reader, the nook, boasts a variety of features that B&N says makes it superior to the Kindle device made by Amazon.
I received one as a gift for Christmas, and while I am still awaiting its arrival, I’ve done a good bit of reading about the device. Overall, it sounds like a great device but like any 1st/2nd generation product, the nook should be expected to have its share of imperfections and unfinished features.
One of these unfinished features is the nook’s ability to lend out books, but only temporarily, to other Nook users. According to the clarification from B&N as stated on the nook blog nookTalk (on Twitter as @nookTalk, “the books you buy for your nook can only be loaned out ONCE for fourteen days.” This “one-lend-only-and-just-for-14-days” feature, in my mind, makes this feature more hype than substance. How often do you borrow a book from a friend and return it 14 days later? And how often have you lent out a book multiple times to various friends you have who you think should read the book, or read enough of it to be interested in purchasing it themselves? How frustrating would it be to only have the ability to lend the book out one time, and never again?
Admittedly, the nook’s ability to lend books at all is better than the Amazon Kindle’s lack of a lending feature. And I imagine there’s plenty of business, partner/copyright, and technology issues at play here that prevented a more relaxed lending feature at this time, but here is my question: why not allow the process of lending an e-book to occur in essentially the same way as the lending of physical books works?
Here are my specific suggestions on how to loosen up the technology to better emulate real-life book lending, while also (somewhat) protecting content creators’ copyrights, their royalties, and the publisher’s/distributors’ revenues. These suggestions could be implemented by any of the e-book / e-reader companies:
- Extend the time limit of lending. This is an obvious problem; I would propose they extend the time limit at least to 60 or 90 days, but preferably to something closer to 6 months. This only makes sense, as a physical book lent out can sometimes stay gone for a while.
- Do not allow the owner of the e-book to read it while it is “lent out”. This may be disappointing to e-book users, but it does accurately match what happens with physical books and thereby provides some protection to content providers’ copyright and distribution concerns.
- Implement automatic reversion of the reading rights. As a way of preventing the scenario we have all experienced where you lend a book to someone, but it turns out to be a gift to them (because they never return it!), the devices would ideally revoke reading rights to the book on the lender’s device/account after the lending time limit is up, and return those reading rights to the e-book owner. Update: I heard from @nookTalk shortly after publishing this post that this feature “should work” currently. Thanks for the info!
- Allow for upgrades / “full license” purchase of ebooks to remove or relax restrictions – Apple has already done a similar thing with their music, often offering a non-protected version of songs on iTunes for $1.29 instead of the standard $0.99 per song price, for example. So, an e-book that normally sells for $9.99 could sell for, say, $14.99 in an unprotected format that might have relaxed lending restrictions (even longer lending, lending to more than 2 or 3 people and simultaneous access to the book yourself, etc.) This would calm the critics and ensure that people could have more flexibility if they paid more for the e-book– probably something closer to the cost of what the physical book would cost in the store.
- Implement a “lending friends” list – Thankfully, my understanding is that the nook does allow multiple accounts (I’m not sure of how many, but I am sure it’s comparable to the Kindle’s 6 account limit) to have access to the same books. This should assuage any concerns about members of the same household being able to access each other’s books. But my LENDING friends list that I suggest essentially works the same way, except that the list of accounts can be larger and is used for the lending feature only, not for unlimited normal access to your library. This again would somewhat of a limiting feature to users, but would be a mitigating protection for B&N and publishers. If you, for example, can only lend any of your books to someone on a list of 10 different for example, this will limit the odds that lending will be so easy as for some to avoid purchasing books altogether.
I am hopeful — and confident — that as the e-book technology improves and technology creators, authors, and publishers come to grips with the radical changes that will be coming to their industry with the rise of e-books, there will also be an eventual improvement and standardization of features such as e-book lending across all devices. Hopefully these suggestions here will help to kick-start the discussion.
Why isn’t faxing dead yet?
My original title for this post was “Is faxing dead?” But upon typing out those words, the answer was obvious: yes and no, and so I changed the title to “Why isn’t faxing dead yet?”. If the ancient 20-something-year-old art of placing a paper in a machine that will send the image across phone lines to a fax machine or server elsewhere in the world was entirely dead, then people would disconnect all fax machines, stop purchase fax software, and most importantly they would stop placing the numbers on their business cards. But those things haven’t happened across the board as of yet (in fact, the idea for this post came to me as I was entering an attorney’s contact info off of her business card, fax number included, into my computer the other day). Nonetheless, many DID turn their back on fax machines long ago and so as far as they’re concerned the answer is “yes”. But for the reasons I will detail momentarily, one cannot claim the total death of faxing quite yet.
THE OBVIOUS ALTERNATIVE TO FAXING
With Internet access and Internet use now more ubiquitous than a nearby fax machine, one would think the simple act of scanning and emailing a document would have replaced faxing years ago. The idea of emailing a scanned image, and more importantly the idea of receiving a scanned image attached to your email (as opposed to pages falling off of a fax machine in the next room) is extremely attractive. The electronic, scan/email approach is so much easier (in my opinion) that at one point when I worked at an office without a scanner but that had a fax machine down the hall, I would fax a document to my e-fax number on my computer, walk back to my computer and then forward the email I received from that fax machine on to the intended recipient via e-mail. I did both myself AND the eventual recipient of my fax a big favor by keeping our correspondence digital by converting the hardcopy document into digital format. This would allow us both to access and view the document then and in the future from anywhere and at any time.
REASONS WHY FAXING ISN’T DEAD
All this having been said, why is it then that fax numbers still exist, and fax transmissions continue? I would propose that the jump has not yet happened for 3 reasons:
Reason #1: Scanner manufacturers (i.e. Brother, Canon, HP, etc.) and computer manufacturers (Dell, HP, Apple, etc.) have not done a good enough job of simplifying the act of sending an image to someone else, thus making it as easy for everyone to throw out the fax machine for good.
Despite my obvious preference for scanning as described above, even I must admit that sitting down at a computer, finding the scanning software, and making it all happen together with the device at hand is not as easy as it should be, with different processes, software, and things to consider. Less-comfortable computer users will often find it easier and quicker to use a dedicated device – a fax machine – to send several pages of images.
Even if the Windows and Apple operating systems got their act together, you still have the issue of the scanning device itself. Until the recent popping up of The Neat Company kiosks in airports all over the country, I haven’t seen one vendor get the device small enough, simple enough, and integrated with scanning/filing software well enough to really push scanning into the mainstream. Again, The Neat Company has done a pretty good job with this, although my impression is that their filing system is still proprietary, but their flagship desktop scanning device and system is listed at $399 on the first page of their website — a price too step for most people to consider a dedicated device. Instead most people will stick with a Brother multi-function device or similar (great machines, by the way) and that would be fine, except many of them will never figure out the scanning technology and system well enough to use it smoothly and productively.
Reason #2: Services rose up to fill in the fax -> technology gap, thus prolonging the total death of faxing technology. Efax.com, a leading online fax service provider, gives people free fax numbers and lets them receive a limited number of faxed pages per month at no cost (I use this service, in fact, as some people still want to fax me documents from time to time). For a monthly fee, Efax.com provides outbound faxing, a local phone number of your choice, etc. etc. Within corporations, IT departments have long been acquainted with fax server software made by companies such as GFI which allows for the routing of incoming faxes straight into employee e-mail boxes.
These services have kept people tolerant of the old fax-to-a-phone number approach, largely because people often send and/or receive faxes through these systems without ever touching a fax machine. The tragedy here is that money is spent on fax server software and phone lines are tied up in the transmission and receiving of faxes with this technology. Despite the obvious benefits to these services, over the long haul they will become unnecessary.
Reason #3: The move from transmitting hardcopy documents over the phone lines via faxing to the outright irrelevance of paper documents in many of our homes and companies has created something of a “leap frog” affect. Ironically, I believe one reason few companies have ever gotten serious about giving the average personal/home user an easy, consistent, and inexpensive way to scan, email, and organize paper documents on their computer is that very few things even come to us in hard copy form any more. Bank statements, newsletters, daily news, and correspondence all come to us and are available for later retrieval by us in a web browser. As a result, there almost wasn’t enough time and profit incentive for hardware and software companies to kick out fax machines for good by creating an inexpensive, easy-to-use device that could be successfully sold and marketed to millions.
CONCLUSION
In conclusion, this is what I believe: faxing will “die” once and for all when desktop scanners become cheap, small, and easy to use– AND when paper document flow slows to such a crawl that an email address will be more than sufficient on a business card for all professionals — even attorneys.
A good article about Roth IRA conversion
I have recently been asked to address Roth IRA conversion considerations in my blog. However, I read an excellent article on this issue in The New York Times the other day that takes into account all of the most relevant, current issues on this topic, and really provides a good treatment of the issue.
Several items of importance are covered and taken into consideration in the article, including:
- The upcoming lift of the income limit that previously prevented many individuals from contributing to a Roth IRA
- The impact of current (and future anticipated) estate tax law on your decision to convert a standard Roth to a Roth IRA
- Use of the annual gift tax exclusion to accomplish some of what you might have otherwise done with some retirement savings later in life.
Click here for the NY Times article, “Thinking Hard About Retirement and Death”.
A look at CD to digital music conversion services
I recently looked up several different companies which allow you to mail your physical compact discs to them, and then in turn deliver the music back to you in digital form. After my wife’s hard drive crashed yet again a few months ago, erasing her digital audio collection which she manually converted on her computer, CD by CD. And so I knew we had to come up with a quicker way to convert all that music, this time, instead of manually ripping each CD ourselves. Sure, various utilities out there make the copying faster, but you still have to deal with swapping hundreds of CDs (in our case) in and out of your computer as they are copied. Additionally, we had never converted all of my CD’s, instead opting to convert a CD here or there as I wanted.
I looked at three services in detail. Each of these services consistently showed up at the top of search results for me when I searched Google using a number of phrases such as “cd to mp3 conversion” and “cd to digital audio conversion”.
Musicshifter.com boasted “as low as 69 cents per cd”, but after visiting their site one learns that the 69 cents price only applies to archive, “lossless” quality cd backups. As helpful as that service is, most people will want their cd’s converted into formats that result in file sizes small enough to load onto portable music devices, such as the Apple/iTunes proprietary AAC format, or the popular MP3 format. To get that type of STANDARD conversion done, their pricing starts at 99 cents per CD and goes up from there, depending on how quickly you want the digital files back in your hands.
RipDigital.com, another top site in Google search results, also prices their standard service at 99 cents per CD. A big negative, however, is that their 99 cent service only provides you with 192 bit audio quality, and in order to get your converted digital audio files created at a higher bit rate, you will have to pay a total of $1.19 per CD. Sadly, their “lossless” quality backup service is very pricey at $1.39 a CD. This makes it fairly expensive to order a standard digital version AND a lossless, archive version of each CD for those that might wish to do that.
PickledProductions.com was the third site that I closely evaluated. Their product offering is excellent. Although all of the services make it easy to ship your CDs to them with containers they send you, and although all of them offer insurance for the CDs you ship to them, Pickled Productions actually does all of this at the lowest price of all of them — only a 89 cents per CD conversion price, and for that price you can get the songs recorded digitally at a quality level as high as bit rate of 320! Additionally, you can have them also create a second digital copy of each CD with a second format for only 15 to 25 cents, depending on the format. This is perfect for those wanting to also secure a digital “lossless format” copy of each CD without spending twice the conversion cost as the other sites would appear to require.
So, we are moving forward with using the PickledProductions.com service as its service appears as good as the others, and its pricing clearly the lowest! (10 to 20 cents per CD savings adds up when you have several hundred CDs).
I will let you know how it turns out!
NOTE: I have found a great online converter app that shows you how many CD’s you can convert, given a certain amount of hard drive space. Click here for the link.
UPDATE, 1/5/2010: Today I placed an order on the PickledProductions.com website after briefly speaking with a sales rep on the phone. I also found out they are offering 10% off orders right now with the promo code NEW YEAR.
UPDATE, 3/4/2010: After receiving the Pickled Productions “welcome packet” about a week after my phone order, I put off organizing my cd collection for a few weeks, then finally decided to get things in order and place them on the spindles that Pickled Productions sent to me. Before sending them back, I called them and asked if I could add a second format (for only 15 cents more per cd) on my collection conversion, and they said “of course!”. After mailing them in, it took about 3-4 weeks before receiving a confirmation e-mail that the conversion was done; within a week of receiving that email the whole package– my cd’s along with the data dvd’s filled with the music, returned. I was happy to find the data dvd’s excellently organized, labeled with the artist name range on the label of each dvd, and on the dvd itself I found separate folders for each artist, and within them subfolders for each album. The song files themselves were named by the name of the song, with the artist in parentheses at the end of the song name. A very clean, organized, format to be sure. To top it all off, I received a printed, bound, printed music catalog detailing my collection, complete with color-printed cd covers along with track lists beside each one. Because I sent in my collection in alphabetical order, I am not sure whether the music data dvd’s and the printed music catalog also came alphabetical because of how I had organized them, or if Pickled Productions would have re-sorted them alphabetically anyhow. All in all, I was VERY pleased with the service and the price!
Extended warranties: If you must buy them, then at least shop them too!
I recently wrote a blog post discussing the high cost of “extended warranties” or “replacement insurance” on small items. The basic premise of my post was that (generally speaking) the lower the the value of an item you are purchasing, the higher the extended warranty cost will be for that item (as a percentage of the item’s value). I generally warned people against such plans but did provide a framework of how to assess whether it would be worth purchasing such a warranty, as there could be rare times when it makes sense (if it had taken a while to save for the item and you would intend to replace it if ever lost– or if like me, you have a penchant for consistently misplacing certain items regularly, like your cell phone).
Just the other day, I saw a great article in The Dallas Morning News entitled “Shop Around before buying an extended electronics warranty” that reinforces much of what I wrote pertaining to extended warranties on merchandise purchases, and also provides more information about these extended warranty products.
I agree with the article’s title, because if you feel like you must buy an extended warranty, then you should treat the purchase of the warranty just like you often treat the purchase of the device: shop around first! The article also provides some helpful guidance along those lines from Consumer Reports, which “says 20 percent of the purchase price of the covered item is the max that anyone should pay for an extended warranty.”
Here is an excerpt from the Dallas Morning News article:
Shoppers are predicted to spend $1.3 billion on extended warranties for electronics and appliances this holiday season, according to industry journal Warranty Week.
Many of those sales will occur at the cash registers of retail stores where otherwise well-educated shoppers unthinkingly agree to inflated warranties.
“Consumers will spend months and months looking for the best deal [on an electronic gadget], waiting for it to go on sale,” said Geoff Green, president and chief executive at Dallas-based Extended Warranty Group.
“And then that same person will spend double what they should on the warranty.”
The gentleman quoted in the article’s excerpt above, Geoff Green, leads the company behind www.electronicwarranty.com, an alternative source to the extended warranties that are often pushed heavily on consumers at the checkout in stores. This to me seems like a very good business idea, and one that pays off for consumers– Mr. Green clearly recognizes that stores are pricing these warranties far too high and has provided another way for consumers to get coverage on such items at a more reasonable cost.
The lesson is this: put some energy not only into shopping for the best price for the item, but also shopping for the best available warranty by looking at sources of warranty coverage beyond the retailer itself — sources such as www.electronicwarranty.com
Happy shopping!
Own a credit card for that favorite store of yours in the mall? Be careful…
There’s a great story in the NY Times today about the potential pitfalls of store-branded cards, exposing the unsavory terms attached to their cards.
All of us have been asked when checking out at Dillards, the Gap, Lowes Hardware, or any number of other stores if we would “like to sign up for a store credit card and save 15% on today’s purchase??”
If you are in the store to purchase a large item, such a proposition may be tempting, but it appears that the unimpressive terms of the typical store credit card makes the chances of such a discount later being wiped away with just one missed or late payment.
Tara Siegel Bernard’s article yesterday in the NY Times has a lot of good factual and wise nuggets, including this:
…if you strip away the store discounts and brand names that come with these cards, many are essentially the same products marketed to subprime borrowers, or individuals with tarnished or fairly new credit histories. Would you really chose a card with an interest rate of say, 25 percent, or about 9 percentage points higher on average than many other credit cards? …you should also be considering the card’s terms along with the possible effect on your credit score.
She goes on to quote a consumer debt specialist who discusses the negative impact on your credit score that often occurs with the addition of a credit card, and what the reduction of your credit score below certain critical limits can do to you.
We would be wise to heed her warning.
Confused 10k runners accidentally complete full marathon
THIS JUST IN:
Reports are coming in of a bewildered trio of runners who, early Saturday morning, accidentally ran an entire marathon-length race, which is just over 26 miles, instead of the 10k race (about 6.2 miles) that they had actually trained for and planned to run.
The event was held at the Spicewood Vineyard just outside of the small town of Spicewood, TX. At the three runners’ request, we have changed their names in this article to Alisa, Christie, and Bill.
According to Alisa, the group of three friends had started running regularly in their neighborhood and area running paths to prepare for the race, going as much as 5 miles in recent practice runs. “I fully expected to arrive here and run a fairly challenging 6.2 mile race, having run almost that distance in recent practice runs… but I never would have imagined we would run over 26 miles in one stretch today, and accidentally at that!”, she said. Christie, on the other hand, denies that the group ran any further than the original distance of 6.2 miles, or 10 kilometers, that they planned to run. When presented with several facts about the morning’s incidents, including the time of their run, various eye-witness accounts of the distance, and the distance meter on her own ankle, Christie became defensive: “Yes, I know the run took us over 6 hours, but we also knew that our pace was slightly slower than the average runner, and our running companion Bill was keeping track of where we were at and how much further we had to go at all times. We fully expected this run would take us more than an hour; what’s an extra 5 hours or so really matter?”
After being alerted by concerned citizens living on Burnet County Road 409 near the vineyard, reporters arrived on-scene about 1 hour after completion of the incredible, accidental 26+ mile run. Despite the time elapsing since they stopped running, one of the runners (Bill), was still short of breath. However, between breaths, he confirmed they had indeed run a full 26 miles, by accident. “What happened, you ask? Well, all I know is that my contacts were itching, and so for the first mile or so I did a lot of rubbing of my eyes. At that point, it all became a blur. The two girls with me were busy talking about the runners dressed in Santa or Elf outfits as well as new racing ‘gear’ they wanted to buy, and so I was left with the task of tracking the path and progress of our run. At one point, I thought for sure I saw a sign that read something like the 10k midpoint, but it apparently was about the 10 mile mark of the half-marathon that was going on this morning.” Bill went on to describe hours of running with no one else in sight, hallucinations experienced by various members of the group (“we just thought it was the effect on us of rotten, fermenting grapes in the fields beside us”, he says), people in the distance, far so as to be barely perceptible and yet clearly waving at them as they crested various hills on the sprawling vineyard property, and even a long period of time just past the midpoint of their run when dozens of cars were passing them on the road, clearly leaving the area “as if everyone had somehow finished before us. Now I know, of course, what happened… apparently, the half marathon on-site had apparently finished a while before we saw those cars passing, and as I know now we were only halfway done with our ‘accidental’ marathon”.
Race officials were flabbergasted by the incident, and confirmed that there was both an organized 10k and half-marathon race held that morning at the Spicewood Vineyards, but said there was not even a marathon section of the race organized or a course of that length laid out on the premises. Commenting on the the unlikely run by the three confused runners, race organizer Johnny Chase said “I’m completely dumbfounded by the whole thing. The only scenario I can imagine is that they missed the 10k turnaround point, and then must have run the half-marathon route twice, mistaking the finish line of the half-marathon as their race’s midpoint–because at one point we saw the group of three jogging very slow towards the finish line much later than anticipated for their 10k finish, probably because they ran the half marathon route instead. My staff ran from the finish line towards them, hollering words of encouragement, but the three runners apparently misunderstood them as fellow runners just having reached the midpoint and turning back around, and so they followed suit and turned around and started running back away from the finish line again. We didn’t see them again for about 3 more hours, and so my guess is they had just completed the half marathon route on our property at that point and in their confusion turned back to do it all over again. Still, they must have turned off the path at some point on their second trip around, because the search effort we launched yielded nothing, when to our surprise they eventually crossed the finish line, coming from the back of the property out of the grass and woods”.
Other runners and various bystanders who witnessed various segments of this so-called accidental marathon described the scene as “painful”, “a joke”, and “a disgrace to the vineyard”.
Still, the biggest mystery of all is how the three runners had the stamina to run a marathon, even in 6 hours at that, when none of them had run more than 5 miles in recent months. Christie, still not willing to admit the group had indeed run a marathon-length distance, instead bragged to our reporter about her extremely lightweight Spira shoes, and Alisa emphasized the “slow, steady pace we were running”. When we attempted to question Bill further on this issue of the group’s incredible stamina, he responded with some mumbling about the “below-freezing, disorienting early morning temperatures” and “getting my vision checked and tweaking my brand of contacts”.
One thing is certain: race organizers and nearby rancher/farmer neighbors are absolutely adamant about preventing a repeat of this type of episode in the future, or at least limit the fallout from such incidents. Late this afternoon, an especially concerned neighbor called a community meeting to be held at the vineyard in the coming days. According to the organizer’s urgent email, the agenda will include, among other things, talk of how to better accommodate police on their next search and rescue attempt in the area as well as a vote on the erecting of several no trespassing signs along the boundaries of the typical route of the annual race. Various local officials and businesspeople have also been invited to speak, including a local game and wildlife official who will coach residents on how to construct fences properly to prevent runners from entering heavily-hunted wooded areas on their property, as well as a local insurance broker who will give a presentation on liability insurance available to the property owners to protect them from claims filed by wayward runners in the future.
And if you believe this story, my friends, well then clearly you weren’t there…or it’s just too late (or too early) for you to be up reading my blog 
Mint.com’s Aaron Patzer: wisdom beyond his 29 years
One of the more fascinating technology stories of the year, which transcended both the software and SaaS communities, was the sale of Mint.com to Intuit (the makers of Quicken).
Mint.com was the brainchild of a 20-something named Aaron Patzer who was frustrated with the lack of a good online money management solution. The company took off, and two years and 1.7 million users later was purchased by Intuit in early November 2009.
Intuit purchased Mint.com for $170 million, which is an incredible sum — and yet, it was probably worth it for Intuit to stay the top-dog in personal financial management for the indefinite future, particularly given Microsoft’s recent announcement that they were ceasing development and future sales of MS Money. Mint.com’s momentum in the online money management space was simply too quick for Intuit’s new Quicken Online offering to compete with.
In the future, I will blog more extensively about some of the strengths and weaknesses of Mint.com’s product, as well as review the other players in the online personal money management world.
But as I have followed these recent developments with the sale of Mint.com in a variety of news sources and technology blogs, I must say that one of the most impressive aspects of the story has been the level-headedness maintained by 29-year old Aaron Patzer after selling his business for a huge amount of money–Patzer now heads up the personal finance division at Intuit. A good example of his attitude is found in his response to a question posed by a reporter in a recent NY Times article about any changes that may have occurred in his life since the sale of Mint.com and the resulting financial windfall:
Q. Have you relaxed it any since the sale?
A. My personal rule is I’m not touching anything I got from the acquisition. I’m just going to continue to live off of my income. I’ve relaxed my budget on travel and hotels just so I can do a little more exotic travel. I’m going to New Zealand this Christmas and I’m very excited about that. I relaxed my grocery budget so I can shop at Whole Foods instead of Safeway.
His maturity and humility are no doubt the same characteristics that led to the growth of Mint.com to start with.
Popular technology blog TechCrunch published Aaron’s account of the building of Mint.com, and the article included this description, by Aaron, of the early days:
Mint was built in the Silicon Valley way. It started in my apartment, with Matt Snider and Poornima Vijayashanker. We interviewed the first real “professional,” our VP of Engineering, David Michaels in our kitchen.
Most astounding of all is the fact that this was only 2 short years ago! Surely these humble beginnings, and the quick and rapid rise of his company with little time for him to get comfortable and relax, has aided in the preservation of his humility today.
Instead, in his new role now at Intuit he “wants to keep pushing online, as well as mobile, desktop apps, and international (which is hard to do in finance with a 38-person startup)”, according to another TechCrunch article.
ALL of us can learn from the lack of emphasis he is putting on his new-found wealth and his focus instead on continued excellence and leadership in his work.
leave a comment