Author Archives: Money Reasons

About Money Reasons

A offbeat personal finance blogger that comes from the tech world.

Why I Love Reward Credit Cards

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I admit, I love my reward credit cards, and I run everything through them as much as possible.

When I go to some store (like Target), I even buy a pack of $1 gum with my credit cards!  So you might be wondering why I love to own credit cards such as the American Express Blue Cash Card and the Chase Freedom cards?

Credit Cards

Credit Cards

Well basically, it’s because I like the discount that the cards gives me on all of my purchases!  Why would I want to pay with cash if it’s cheaper to pay with a credit cards via reward points?  It’s kind of ironic if you think about it.  I’m getting a discount in the form of reward points, but when I use such reward credit cards, the store that I’m using the credit cards at, pays the credit card companies extra fees.  You’d think they would do the opposite and charge less for cash and more money for the credit cards. But they don’t!

Perhaps someday they will, but until that time I’m going to continue to get my discount on items bought at such stores and vendors.

I Love Money Hacks

Another thing I love about credit cards is the potential to discover money hacks to maximize the benefit of using reward credit cards.  Often with me and others it’s a game to find a way to maximized the benefit of using the credit cards.  In my case, I only pursue legal money hacks!

An example of a common money hack today is when you have a reward credit card, and then guy gift certificates at a grocery store like Giant Eagle.  You see in this example you get a higher reward rate because you are using the card at a grocery store, but you are also getting the fuel perks from Giant Eagle to make a purchase there.  So basically you are getting a double benefit for what would cost you much more if you were paying cash for the gift certification at Giant Eagle.

If you look around for such deals, they are possible to find!  You don’t hear about them much because after a while the loophole becomes know and the store that has such a loophole closed it eventually.

Controlling Credit Cards

The thing about credit cards is that they are just a tool.  You much control the tool and not have the tool control you.  So that said, if you carry a credit card balance more than a few months, the rewards credit cards lose their advantages and you are better off going for the lowest interest rate credit cards you can find.  The reward credit cards carry a slightly higher interest rate than non-reward credit cards.

In my particular case, I don’t carry a balance, so the reward points is all true savings for me.

What do you think?  Are you a fan of reward credit cards too?  If not, then why, especially if you don’t carry a balance?

Regards,

MR

Should I Spend More Money On My Kids, Especially My Young Daughter?

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First, let me say that I spend more money on my kids than I do for myself.

And in my mind that use to make it okay that I don’t really get the latest and greatest electronic, or motorized things for them.  But lately, I’ve been thinking that perhaps I don’t spend enough and perhaps I really should spend more money on my kids.

I think we are somewhat rare in that we really only spend a few hundred dollars on each kid at Christmas, and even less for their birthdays.  To me that seems like a lot, but when I compare what my kids have to the neighborhood kids, it seems like they have less.

In particular, my daughter seems like she’s at a huge disadvantage because she’s ready to try advanced electronics.  She’s been asking for a laptop, ipod touch, or a cell phone for the last few months.  I’ve been telling her that she’s too young, but really she’s not.  I know she has the focus and skills to work such devices, but it just seems unfair to my son to give her such devices now at such a young age (she’s still 7-years-old).  Of course the costs are a concern too, I do hate to busy expensive things that lose their value so quickly.

Perhaps if I think hard enough on the matter, I can come up with something that isn’t too expensive, yet still gives her exposure to such technology.  Think, think, think…

On the other hand, I would like to give both of my kids some of the adrenaline rushing fun I had as a child (go-karting, motorcycle dirt bikes etc).

First Gen American:  Babci on Death  Wise advice from Babci!  Great saying “Death doesn’t have favorites.”

Live Real, Now:  53 Percent  And to think, I thought I was tough working at the age of 15…  This is a great story of working at an early age and pulling yourself up by the bootstraps.  Read this, I’m sure you’ll be impressed.

Everyday Tips and Thoughts:  Craziest Ways People Save Money  This is a funny, and yet sad story about being too frugal!

Bests,

MR

Are You Getting Paid What You Are Worth?

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How do you know if you are getting paid what you are worth?

Peanuts?

Peanuts?

 

Today I’m going to talk about a computer systems analyst that I once worked with that was making a quarter of the salary that I was making, even though he graduated from a prestigious private college and achieved much better grades than I.

The employee that I worked with (let’s call him Tooshy) was brilliant, worked long hours and was very productive.  For 10 years, Tooshy told me that he worked for less than $40,000 at an Ad company, never questioning his salary, and happy to get the raises that he was getting.

Flashback 10 years prior, he consider himself lucky when he got an internship while he was still in college since there were a lot of applicants completing to get selected for the internship at the fairly large local company.  He said of the over 80 applicants that applied from his small but prestigious college, he was one of two that was selected.  I could read in his face that he was (and still is) proud of being selected from such a high number of qualified student.  He had an edge though, his grades were at the top of the heap, he had the highest GPA of the group that applied, and since that was the determining criteria for the hiring company, he naturally got selected.

The Financial Mistake of Not Looking At Other Opportunities

Tooshy, while a brilliant student and computer analyst, wasn’t aware of what other comparable computer analysts were getting paid to do for the same work.  So for nine years he just kept spinning like the good little computer analysts gear that he was, accepting less money the entire time.  Now in his defense, he was single and the amount of money he was getting still seemed like a pretty decent chunk of change to him.  He rented a room from a friend at an extremely cheap price so he said he was always flushed with cash, or so he believed.  This obviously was a huge financial mistake, and one that he deeply regrets and is quite bitter about, even to this day!

Tooshy’s problem was that he wasn’t really focused on the money aspect of his job, and the other computer science students that he hung with in class weren’t really focus on the money element either.  Mostly, they learned to create computer systems, and were coding the majority of the time, especially Tooshy because he spent a lot of time producing some of the best code in his computer classes.

Once Tooshy realized that he was getting grossly underpaid, he confronted his boss about it.  His boss realizing Tooshy’s worth agree and tried to get him a raise.  Well, upper management only agreed to a $10,000 one time bump increase.  By 1 time bump increase, they meant that they would give him the $10,000 increase in pay instantly, but the raise next year would be the a normal 2 to 5% raise.

4 Steps to Make Sure You Are Getting Paid What You Are Worth

  1. Don’t be shy, ask friend that are in similar positions if they make more than x, or directly what the make!
  2. Go the site www.salary.com and check out what other in your position may be making
  3. Interested in what the employees make at a certain company that you are interested in check out this site www.glassdoor.com.  I have found that this site has some great information on salary and work conditions for decent sized companies.
  4. Try to work with friends!  If you have a cliché where you work, you have more clout…
  5. Use google for searches on your profession and salary…

Please, don’t go through your work career like Tooshy.  He worked long hours for below average rates for too long (although I’m sure he is doing okay now that he is aware of his worth).  In the future, there is a good chance that salary pay might not increase like it has in the past, especially with global competition and a government where country pay/wage inequalities exists.  In other words, get the money while it’s on the table!!!

Readers, do you know if you are getting paid what you are worth?  If not, please check out the links in my 4 steps above.

Here’s wishing you the best!

MR

Why Companies HAVE To Make Profits

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A buddy at work didn’t understand why corporations needed to try to make, what he called  “huge profits“, so I thought I’d share my thoughts on the topic.

Have you ever been to a soccer (or basketball or football) game where the opposing team looked like they were standing still, and the game was a huge mismatch?

Well, that is exactly what would happen if the companies don’t try to make a healthy profit.  Nobody invests in the company, and there is no motivation for the company employees to try. In fact, company can have a better product and still fail to an inferior product from a competing company because of the lack of profits!  The failure of a superior product to an inferior one is why profits and the abilities of the management team (CEO, etc) to achieve them are so important.

Why wouldn’t the company employees try, you might be wondering?
Well if your company isn’t profitable, your company isn’t going to give bonuses and may not even give raises (this is obvious given the past few years).  We go to work to feed our families and make money so we can use the cash to buy stuff to make our lives better.  Without the hope of future raises and bonus, we start to look for other places to get ahead in life! (Note, this doesn’t apply directly to government workers, but indirectly it does.  If companies and their employees don’t make money, governments don’t get taxes, and eventually government workers are affected too).

I think my friend didn’t really understand what happens to the profits after they are declared.  First, the profits that the companies make don’t just disappear…  They are distributed as dividends to the shareholders, used to buyback outstanding company shares or saved and used for future company growth.

Even if the money is just held in cash, that money still belong to the shareholders of the company!  Occasionally, you’ll see a company like Microsoft give a huge cash dividend.  This is because they have enough money in retained earnings to cover their future needs, so the excess is given back to the risk takers (stock owners like us) that invested money in the stock.  Actually dividends are a good wealth distributor and benefit all of us in one way or another, vs private companies like Fidelity. Private companies don’t even have to report their profits publically!

So given the choice been a company that is very profitable and one that doesn’t really care about money and isn’t expected nor even tries to earn a profit, I’m going to pick the one to invest in that cares about a profit!  And I’m betting so would you if you want to be a successful investor!

I’m writing this article today, because sometimes we don’t see all the pieces of a business process.  Just because those pieces are not in the media or communicated out doesn’t mean that they aren’t critical for a given company, and in the end society as a whole!  So yes profits are necessary…

What is your take on company profits?  Do you understand why the are necessary?

MR