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Replacing My Heat and AC: Is Now the Right Time?
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My house's furnace and air conditioning unit are a little over 20 years old. Since many other things in the house have gone bad since I bought it last year, I'm amazed neither of these two has died yet.
I have heard that now is a good time to the best prices from contractors on replacements, so I am in the process of getting quotes. I figure I could spend my tax refund on them to avoid problems in the future, since with this economy it looks like I will own this house for at least the next three years.
The first quote I received came in at $3600 for everything, which I thought was pretty good (research online had told me to expect a cost of between $4500 and $5500). The second quote came in at $7600, for equipment of the same specs but different manufacturer.
I did some research, and everything I've read states that the manufacturer of the $3600 quote is very reliable, if not the best in the industry. Assuming this first company checks out, was this second company looking to make around $4000 more in profit off of me?
It's unbelievable that a company can try that, but I guess they are used to working in situations where heat is in immediate need, and people go with the first company who answers their call.
This certainly is a lesson that one should be prepared for potential emergency situations like a broken furnace or AC unit. It's also important to have funds set aside for such emergencies or capital expenditures.
Even though I may be cutting short the lives of my existing units, I'd rather be safe (getting a good deal now) than sorry (being taken advantage of when it's January and the heat won't work).
Tom Valenti is a marketer and project manager who currently works for a financial institution in New Jersey. For more info, visit him at http://tomvalenti.com.
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Why Bill Gates Shouldn't Be Worried About Technology Grads
When Bill Gates testified before Congress on March 13, he had his usual requests: more money for math and science education, more funds for research, and more visas for foreigners to come and work in the United States.
He claims foreigners need to come here to "maintain a competitive edge in technology innovation."
The Bureau of Labor Statistics defines 7 different computer occupations that need at least BA degree skills, and one in computer and information science research that requires a doctorate. The Bureau of Labor Statistics reports these 8 occupations totaled 3.2 million jobs in 2006 and growing year by year.
However, computer programming jobs are down from over 500,000 in the late 1990s to fewer than 400,000 in 2006. The above mentioned research occupation has reported employment of 25,000 for 2006, but here the Bureau of Labor Statistics is forecasting annual growth under 1,000 per year.
When we look at the National Center for Education Statistics, we find 1,679 doctoral degrees in computer engineering and computer information sciences for the year ending June 2006.
The remaining 6 occupations needing at least BA degree skills include two specialty jobs in software engineering, and one each for systems analyst, database administrators, network computer systems administrator, and network systems and data communications analysts.
In our logical minds, recent graduates should compare to recent job growth for the United States to fill its computer jobs with graduates from American Universities. For the year ending June 2006, the National Center for Education Statistics reports 72,400 BA and MA degrees granted in computer and information science and degrees in computer engineering.
The average annual increase from 2004 to 2006 for the 6 computer occupations mentioned above was just over 75,000.
However, some of the nearly 20,000 MA degrees undoubtedly went to those who already have BA degrees in computing or computer engineering, so we doubt the 72,400 degrees represent new people available for computing jobs. Even so, jobs as computer programmers dropped an average of 10,000 per year from 2004 to 2006, which makes us doubt the need for 75,000 new graduates to fill those jobs.
The data for the recent years does not suggest large shortages of available degree candidates in computing from American Universities, despite Mr. Gates' worries. More ominous, though, is a decline in jobs as computer and information systems managers, down from just over 280,000 to just under 24,000 from 2004 to 2006, an average drop of 8,000 jobs a year.
We think Mr. Gates should tell us why!
Fred Siegmund covers America's jobs as part of work doing labor market analysis and projections for a client base of recruiters, trainers and counselors. Visit him at www.americanjobmarket.blogspot.com
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HSBC Drops OSA Rate to 3.05%
HSBC online savings account customers got a "personal message" from the company's executive vice president, Kevin Martin, announcing a rate cut in reaction to the Fed's continued action on key interest rates.
Dear JASON,
In these challenging times, having a savings plan is more important than ever. At HSBC Direct we are committed to helping you with your savings goals by providing the best rate we can.
As you are undoubtedly already aware, there has been a general trend of reducing interest rates in the U.S. market over recent months. These changes have been influenced by the Federal Reserve moving its target interest rate down in response to developments in the economy and financial markets. Last week the Federal Reserve again reduced this key rate, by 0.75% to 2.25%.
At HSBC Direct we review our rates regularly in the context of market conditions, the federal funds rate and the overall economic environment to ensure we are providing you a competitive rate at all times. Following a further review of all of these factors, we have reduced our Online Savings Account rate by 0.50% to 3.05% APY* effective 3/20/2008.
We will continue to evaluate and respond to market changes so we can provide you with the very best rate possible over the coming weeks and months. At HSBC Direct we are committed to a direct and open relationship with you, even if we have to pass on news about reductions in our rates. We think this is fair to our customers and simply the right thing to do.
The good news is, you’re still getting a competitive rate — 7x the national savings average.** And you can feel confident knowing your savings are with HSBC Direct. We’re part of HSBC Group, one of the largest and best capitalized financial institutions in the world, with over 10,000 offices around the world and 140 years of experience helping our customers achieve their financial goals.
We sincerely appreciate your support and your saving with HSBC Direct.
Sincerely,
Kevin Martin
Executive Vice President
Head of HSBC Direct U.S.I've still got my money in HSBC (in fact, my nearly year-old automatic housing savings transfer is just about up) and I don't plan on moving it anytime soon. The rate cuts are affecting everyone, so even though there might be a few teaser rates available, I've stopped rate chasing.
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Are You On a Fixed Income?
The other day, I was watching a news report on how the stock market's up and downs are affecting senior citizens — specifically, those on a fixed income.
It got me thinking — am I on a fixed income? What does it mean to be on a fixed income?
Here's what Wikipedia has to say:
Fixed income refers to any type of investment that yields a regular (or fixed) return.
For example, if you borrow money and have to pay interest once a month, you have issued a fixed-income security. When a company does this, it is often called a bond or corporate bank debt (although 'preferred stock' is also sometimes considered to be fixed income). Sometimes people misspeak when they talk about fixed income, bonds actually have higher risk, while notes and bills have less risk because these are issued by Government agencies.
The term fixed income is also applied to a person's income that does not vary with each period. This can include income derived from fixed-income investments such as bonds and preferred stocks or pensions that guarantee a fixed income. When pensioners or retirees are dependent on their pension as their dominant source of income, the term "fixed income" can also carry the implication that they have relatively limited discretionary income or have little financial freedom to make large expenditures.
So, if your investments are paying out a certain amount of income over a given time period, you're on a fixed income.
But what if you're on a salaried paycheck? Aren't you getting a fixed amount of income every paycheck?
For the most part, I know how much money will be coming in to our bank account every month because our paychecks are consistent. Isn't that being on a fixed income?
For hourly workers, salespeople who work on commission and 9-5ers with inconsistent part time work, each month, your budget's "intake" column probably looks different. You don't necessarily know how much money you are earning until the month is over.
So if you're a salaried, non-commissioned worker, you're probably on a fixed income. Live like it.
It might seem a bit counterintuitive, like when I say I live paycheck-to-paycheck (even though technically this isn't true). Knowing how much money you have to spend, save and invest each month puts you on a fixed income — and helps you prepare to achieve your goals.
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Money Saving Links: 3/21/08
Being Frugal hosted this week's Carnival of Personal Finance — here are some money saving links for you from it:
Banks are Tightening Credit - What it Means for You - BankerGirl
From the perspective of a casual observer, what’s going on in our economy is really interesting - we’re seeing unprecedented lending standards result in unprecedented charge-offs. No one knows how bad it’s going to get, but everyone I visited with over the course event agreed that the economy is going to get worse before it gets better.
So, how is this going to impact the average bank customer? Here are my best guesses on how the next couple of years are going to shape up for bank customers.
Pros vs Joes: Are Professional Athletes Better Than You With Money? - My Family's Money
An eighteen year old good at hitting a baseball can see more money come his way for signing a piece of paper than most Americans can make in their entire lifetime (source). But are athletes good at managing money of that magnitude? Can they cope with copious amounts of capital? Should they shutter when success sends them seductive spoils?
You Can't Time The Market So Try Dollar Cost Averaging Instead - Plan Your Escape
"Buy low, sell high" is often one of the first things you'll hear when you're learning about investing. The problem with this is that it's tough to know what "low" and "high" actually are even when they are staring you in the face. When markets seem like they are down, like they are today, it can seem risky to make a large investment in case the markets keep going down. One way you can help limit your risk while entering into a falling market is through Dollar Cost Averaging.
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How Labor Productivity Affects Your Savings
We tend to think of savings in personal terms as income set aside in personal accounts.
But improvements in labor productivity are also saving because new and better ways to produce products and provide services save resources.
Take the customer service representative, a job with potential savings. Customer service representatives serve as a point of contact for customers in nearly every sector of the economy, although they have more jobs in the financial services sector than anywhere else.
There are now almost 2.2 million jobs as customer services representatives, making it the 7th largest profession in America. More importantly, their numbers continue to grow.
Unlike autoworkers, who have to be at the auto plant to do their work, customer service representatives can be anywhere they have a computer and a telephone. Working from home saves the personal costs of transportation.
Even better, the cost of driving for gasoline, car insurance, car repairs and child care saves after tax dollars. The savings go directly to those who hold the jobs.
Telecommuting also saves businesses the expense of providing office space, building maintenance, electricity, heating and air conditioning, which gives them incentives to have some staff working at home at least some of the time.
To top it off, telecommuting saves society from clogged highways, air pollution, road maintenance and traffic enforcement.
Given the complexity of America's many service plans in loans, credit cards, insurance, telecommunications, health care and utilities, customer service work will not be decreasing anytime soon. The growth rate for customer service jobs continues to be above the growth rate for jobs in general with nearly 250 thousand new jobs reported since 2000.
The Bureau of labor Statistics is forecasting annual growth at around 55,000 new jobs a year. Telecommuting for customer service representatives would generate substantial savings given their large numbers in the labor force.
And, unlike so many other jobs, some of the savings goes directly to the workforce.
Fred Siegmund covers America's jobs as part of work doing labor market analysis and projections for a client base of recruiters, trainers and counselors. Visit him at www.americanjobmarket.blogspot.com
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Capital One Adds Online Savings Account
Capital One ("What's in your wallet?") has added an online savings account to their offerings, touting a 3% APY for balances under $10,000 and 3.85% APY for accounts over $10k.
There's no minimum balance, no fees, and can link up to an external account (even outside of Capital One).
According to Bankrate, the 3.85% APY would make it one of the highest currently available, while the 3% puts it near the bottom.
It doesn't say anything about intro rates, so I'm assuming that the APYs are good for awhile … at least until the Fed cuts rates again and the online savings accounts follow.
Click here to find out more about Capital One's online savings account.
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Money Saving Links: 3/16/08
This week's Carnival of Personal Finance is up at Quest for Four Pillars.
Prevent Identity Theft - Military Finance Network
Identity theft is a serious crime that can destroy your finances and ruin your life. Identity theft can ruin your credit score, destroy your ability to take out a loan, or even get you arrested for crimes you did not commit.
There are three methods to protect against identity theft and the damages it can do to your finances and your freedom
ING Electric Orange Check Experiment - The Happy Rock
I have been using the ING Electric Orange checking account for almost a year now and I have been very pleased. One downfall to being able to earn 2.25% on your checking account balance is that they don’t offer a regular paper check book, but you can fill out an electronic check form and they will mail out a check for you.
MMA Rates are Falling, What are You Going to Do? - Dividends4Life
Let me state the obvious: Since year-end, money market rates have been in a free fall. At the end of the year my best money market account (MMA) was earning 5.11% APY. That same account still has my highest rate, but it is now earning a measly 3.75%. So what's a guy to do? Here are a couple of actions that I have taken
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