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Credit Score Differences

September 7, 2016 by Finance Gourmet

It’s hard to get real, hard data on various finance things sometimes. After all, for “real world” data, I can only go on what I have most of the time. That’s hardly definitive for everyone. There is always data “out there,” of course, but it’s hard to know what to trust. Even when people are honest, they aren’t necessarily accurate. That’s why scientists hate research that depends upon participants self-reporting data. Even when you have real data, there is often fine print that renders it moot. For example, I have a credit score that gives me my credit score for free each month, but it says right there in small letters that this is not the score they use for making lending decisions. That hardly makes it my “real credit score” then. Credit Karma has free credit scores that are not FICO scores. Credit Sesame offers similar non-FICO based credit scores, also for free. Which Credit Score Is Real, Really? However, recently, I had a friend, who I trust and know well enough that he let me see some interesting data regarding his credit score. (Mostly, he wondered, what was going on.) It turns out that he has a credit …

ITT Tech Shuts Down

September 6, 2016 by Finance Gourmet

ITT Technical Institutes is one of those colleges that you seem to see more on TV commercials than anywhere else. It announced that it is shutting down immediately, blaming the government. Unfortunately, the reality is that this was a long time coming. For years, many of the so-called, “for profit” colleges have been accused to providing their students little more than a big balance of student loans and degrees that weren’t worth the paper they were printed on. Somewhere along the line, enough powerful politicians switched from protecting these colleges to protecting their students, and the die was cast. As soon as ITT’s accrediting agency raised questions, the Feds acted. How ITT Shut Down Despite what you may read, the government did not shut down ITT. That would be an overstep over government power. Instead, it did the one thing it is allowed to do. It removed the eligibility of students to use federally backed student loans, which, are most student loans, at ITT schools. Lower income students make up a lot of the student body at schools like ITT Technical Institute. Without loans they wouldn’t be able to pay tuition, and without federal backing, they aren’t going to qualify …

IRS Phone Call Lawsuit Scam

September 1, 2016 by Finance Gourmet

I used to be a Certified Financial Planner. My wife is an attorney. I’ve dealt with finance, and business, and courts, and the legal system, as both a professional and as a writer. And still, when I get a call and the voicemail says, “This is the IRS…” I still can’t help but tense up. Phone Calls From the IRS Of course, then I remember that these phone calls from the IRS are a scam. Look, the IRS making phone calls is expensive. You have to put someone in a room with a desk, and a computer and a phone. This is confidential government data we’re talking about, plus there are rules, laws and regulations that govern how the IRS is allowed to interact with taxpayers. In other words, we aren’t talking about room full of $10 an hour temps dialing for dollars. It’s way cheaper and more efficient to have a computer crank out thousands of letters than to have people cold calling taxpayers on their home phone numbers. Besides, by law, the IRS must notify you, BY MAIL, IN WRITING, of just about anything that could vaguely be interpreted as negative happens to you. So, why did I …

Free Annual Credit Report

February 16, 2017August 28, 2016 by Finance Gourmet

You are probably aware that all three credit bureaus are required by federal law to provide you with a free credit report annually. Each year you can request a free credit report from Transunion, Equifax, and Experian. You may think that the best way to get your free credit report is to call the major credit bureaus directly, but actually the best way is to use the FTC approved free annual credit report website. Free Credit Report Website Unfortunately, as with everything, there are a lot of free credit report scams out there hoping to trick unsuspecting users with official looking websites purporting to offer “free” credit reports. If you look closely, you’ll find some find print saying that these are not the officially, federally endorsed, websites to offer free annual credit reports, but if you just start clicking the big, inviting buttons, you’ll end up on the hook for some expensive services to go along with your “free” services. Free Credit Report Scams First of all, do NOT go to freeannualcreditreport.com or anything with the word FREE in it. The free government mandated credit report website does NOT have the word FREE in it’s name. If you go to …

myRA IRA Review – Safe and Legit

August 25, 2016 by Finance Gourmet

No matter how helpful the government could potentially be to its citizens, it typically won’t/can’t get involved in finance because there are huge lobbying dollars behind financial services companies. For example, it would be relatively trivial for the IRS to create a free, online, auto-filing system that would work for most taxpayers, increase tax collections, and be a win-win for everyone involved. Everyone, that is, except for TurboTax, who, obviously, spend millions of dollars each year keeping such a system away from its lucrative tax software business. This is why I was surprised to find out about myRA, a no-cost government Roth IRA program aimed at people who might otherwise have a hard time getting started saving for retirement. What Is myRA and Is It Safe and Legitimate? The myRA account is a government run Roth IRA. As such, it follows all of the same rules as a regular IRA. There is a maximum Roth IRA contribution amount allowed each year. This year, it’s $5500, with an additional $1,000 “catch-up” contribution allowed for people 50 or older. So, what’s the benefit of using the myRA program? The myRA IRA has no start up cost, no IRA annual fees, and just …

Calling a Market Top

August 17, 2016 by Finance Gourmet

As a financial planner a few years back, I noticed that my clients’ attitudes about stock market investing changed along with the tenor of media reports. That isn’t surprising. Many of our ideas are influenced by various media. But, if you look closer, you can see that it isn’t really the media, it’s the same mindset that occurs in the general population about any phenomenon in live. Trendy Stock Market Opinions Think about a recent trend. Not some edge trend that never was mainstream, but some big trend that “everyone” got into at one point in time. It doesn’t really matter what the trend was, whether it was a new band, a fashion trend, or something else. How about we use Pokemon Go as an example? These trends follow a familiar pattern. First, the initial wave of popularity gets going. These people love whatever it is, and tell everyone they know about it: friends, family, co-workers, you name it. Your friends ask you to download the app. The news is all about how there is this great new thing. Their motivation is just that they like something and want to spread the word. The next phase are the people who …

Walmart Buys Jet.com

August 8, 2016 by Finance Gourmet

A couple years ago, when Yahoo bought Tumblr for $1 billion, I wasn’t the only one who wondered what value Yahoo saw in the acquisition. It takes a special kind of Silicon Valley mind to think that a money losing internet business plus a money losing internet business somehow adds up to profit. It turns out that even the modest goal of $100 million in annual REVENUE, not profit, set by Yahoo, was too much for the internet property supposedly worth so much that Yahoo shelled out $1.1 billion for it. It seems that the great lesson of the internet bubble years earlier, that eyeballs and name recognition, do not equal money, still isn’t something tech companies are ready to learn. Which brings us to today’s multi-billion dollar buyout of Jet.com, a money-losing online retailer that goes head to head with Amazon. It’s just over a year old now, and it crossed the $1 billion in revenue line earlier this year. Revenue, not profit. The company, by all accounts, hemorrhages cash and funds its operations by taking on more investors. But, somewhere in there, Wal-Mart sees something worth $3 billion, plus an additional $300 million in Wal-Mart stock. I guess tech companies …

Sell In May and Go Away 2016

August 5, 2016 by Finance Gourmet

There are all manner of investing sayings and “wisdom” out there. One of the most common is a little rhyme that goes: Sell in May and go away. Don’t come back ’til Labor Day. This saying comes from older days when traders actually needed to be in New York City. So, when they ran for the cooler pastures of their summer homes, the volume of trading would decrease, and the volatility would ramp up. Of course, these days, you can trade from anywhere at any time, and a great deal of the market’s volume is actually made up of computers that don’t care how hot it is outside. Does Sell in May and Go Away Actually Work? Pretty much everything works sometimes if it is a Yes/No question. If you go to Vegas and bet on black, you’ll win eventually. Same thing with betting whether it will or will not rain. For 2016, the sell in May and go away strategy isn’t officially over, so it might still end up being correct. But, today, the S&P 500 hit an all time hight, making the strategy a loser, so far at least. In fact, very little of this summer has been …

Elections and Investing

July 24, 2016 by Finance Gourmet

Here it comes (actually, we’ve been seeing it for a while), the pontification about which U.S. Presidential candidate will help or hurt the American Economy, and by extension, the U.S. Stock market. As you might expect, in the world we currently live in, these articles are tinged, if not rife with, political bias. If you are a Republican, then obviously, the Democratic candidate will destroy the economy and ruin your investments, and vice versa. However, some “neutral” economists and financial journalists will write similar articles. So, how do you know the difference? The reality is that it doesn’t matter as much as everyone likes to pretend. Presidential Reality People love to forget that the U.S. President is not a king. No matter who is elected this November, the reality they inhabit involves a grid locked Congress, among other things. While there is a great deal of power invested in the American President, much of that is policy based. While these decisions will eventually influence the course of American business, such changes will not immediately effect either the economy or the U.S. stock market, both of which are enormous in size and scope. Just like spinning the wheel on a super tanker slowly makes …

How To Start Saving for Retirement

July 20, 2016 by Finance Gourmet

If you’ve done some research on retirement savings, you know that there are a lot of options out there and a lot of various factors to worry about and navigate correctly. But, the reality is that if you haven’t really started saving for retirement yet, then every one of those ifs, ands, buts, and maybes apply to people with a lot more retirement savings than you have. Stop reading. Get started now. When To Start Saving for Retirement There is an old saying that the best time to plant a tree was 20 years ago. The second best time is now. Retirement savings works the same way. The best time to start saving for retirement is the day you started earning a paycheck. The next best time is now. If you read up on retirement planning strategies and investing for retirement, you may develop paralysis about your retirement savings plan. This delay is way more costly than any “retirement planning mistake” you might make. So, stop researching. Start Saving for Retirement Now Plan If your employer offers a 401(k) plan, then we are done talking. Walk down to human resources, or better yet, go on the company website and fill …