Vacation!

I will be on vacation for a week. I expect posting to be spotty (which has been the case this past month anyway). Wishing all of you a good Labor Day Weekend.

Which Credit Cards Do You Have?

Personally I only have 2. I know a lot of fellow bloggers are posting about one of the cards that I have which is going to change/scrap its rewards system. Its a shame as its one of my oldest and most loved cards. Id hate to have to just let it sit in my wallet for nothing.

I Have:

• Citi Dividend Mastercard (cashback = 5% gas, groceries, and drugstores, 1% everything else). Their customer service is pretty good. I monitor my usage and use the free option to pay the bill online. Ive had this card for 5 years now and am happy with it. I generally cash out when I reach $100.
  
• Chase Cashback Rewards Visa with the same 5% gas, groceries, and drugstores, 1% everything else. Same as citi in almost all features (online statements, payment, etc). The only slight beef that I have with Chase is that they might not be as customer service oriented as Citi. I say this because I was once out of the country and unable to pay my bill on time and they charged me a late fee without a one time waiver that Citi did for me. Its not really an excuse but just comparing: Citi was nicer. It also could have been because I was with Citi longer than with Chase.
  

Being offered:

• Amex Blue with cashback which is supposedly the same on the surface but is actually a tiered card. This means that all purchases, be they gas/grocery/otherwise are only awarded 0.5% cashback until $6500 worth of purchases. After that the advertised percentages kick in. This could work out to an average of close to 2% with sole use.
• Amex Delta Gold Skymiles with 25000 bonus points which is basically a free ticket. The miles are pretty good too ... basically 2% on everything. The only gotcha with this card is that its only fee free for the first year. I might consider getting it for a year, getting my ticket and then cancelling. Dont know if its worth it because closing will hurt my credit score?
• I do have other offers but they are not worth a mention as this post is getting too long already.
  

Criterion I look for in cards before I apply:

• No annual fee. Why pay a fee? Unless you are getting some extraordinary service which makes the fee worth it.
• High Percentage Rewards on gas, grocery, restaurants, etc...things where I spend most of my money on. Ideally I would like 5% on these but nowadays these cards are becoming scarce. I wouldnt mind a flat 2% or greater on all purchases either.
• Ability to manage account online. Most companies have this so this is not really a concern.
• 0% balance transfers for > 1yr. This is really not one of my criterion as I dont play that game but wouldnt mind exploring it. (In case you dont know the game its: get money from credit card companies, put in high yield savings account for as long as its 0%, pay the minimum + some every month, pay back all the money at the end and pocket the interest). WARNING: this can hurt your credit score for the short term. A great resource if you want to play this game is this post at MyMoneyBlog.

Overall, I would highly recommend both the cards that I have but there are rumours that my Citi card is not being offered anymore. Please share which cards you have and would recommend.

What is the best place to keep your Emergency Fund?

Lately, I have been thinking about where the best place to keep my emergency fund is. This came up because I was pondering the tax difference between a high yield savings account vs. a money market muni fund. Currently I have most of my cash savings at HSBC at 5.05%. I have some cash in my ETrade brokerage account which is invested in a Morgan Stanley Cali Municipal Bond fund with a yield of 2.47% which according to ETrade is a tax equivalent of 4.19% BUT this is assuming the highest tax bracket of 44.3%. I dont know if anyone has done the calculations but I would certainly like to know what works out the best. I know there are some formulas on investopedia but I guess I want to just ask people if they have done this calculation before? Where do you keep your Emergency Fund?

Not Keeping Up

I'll admit, I have not been keeping up with blogging lately. This is partly due to my time going towards all my family that came here from various places for a gathering. I should get back into posting regularly within this week.

Good Advice from Vanguard's Chairman

I was browsing through my usual websites and found a link to this advice that is relevant for people like me. Its highlights are:
- Live below your means
- Invest in the market
- Invest regularly
- Learn about finance and money

Networth Statement July 06

Networth Statement July 06
--------------------------

Assets
------
401k                 $  31532.86
Roth IRA             $   8652.52
Brokerage            $  14651.93
Checking             $  11582.30
Savings              $  37219.44
CDs                  $   5179.39
                     -----------
Total Assets         $ 108814.44

Liabilities
-----------
Credit Card 1        $    886.68
Credit Card 2        $    887.26
                     -----------
Total Liabilities    $   1773.94


Networth June 06     $ 100854.04
Networth July 06     $ 107044.50 +6.14%

Positives:

• This was a good month in terms of cash flow.
• My ESPP shares have come in today and I am wondering whether to sell them off and cash out or not? My company's stock price has recently been taking a beating (just like the Nasdaq of which it is a part of) and is currently selling at what I think is a cheap price.
• I got a nice gift from BoM&D (increase in checking $).

Negatives:

• It was a horrible month for my investments. The market has been volatile and mostly negative. I expect this to continue until next quarter when the Fed hikes the rate one last time.
• I learned a lesson in investing. One of my stocks fell 50% in value and I had all the clues to sell it. More of this in another post.
  
• My credit card bills have also been kind of high as I bought some airline tickets for Mom, my uncle, and another 3 people and birthday gifts for my cousins.

Bottom Line: Regardless of my poor decision in stock picking, I am quite happy with a 6.14% increase. The challenge will be to continue saving and investing.