frugal underground

If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!

This evening, we had a friend over and he and I were chatting about design and whatnot. He went home, and then my husband and I were talking about Prosper and how we’d really like to start investing in it. I said that maybe we could once we paid off the student loans (knowing there was a few thousand left).

He leaned over and whispered, “I paid those off while you were talking to Camden.”

Oh!

ShareThis

I am part of a group called LinkedIn Bloggers, which is, not surprisingly, made up of bloggers who are members of LinkedIn. It’s a great discussion group and I’ve made some good contacts and learned some very useful things through it.

One of the more recent developments within the group is a weekly “blog boost.” The idea is that each week, one members’ blog is randomly chosen, and other members are encouraged to write a post about it. There are several benefits: first, we get to know other members of the group better; second, we (and our readers) are exposed to a blog we might not otherwise find; and third, it increases the profile of the individual blogger and the whole group. I think it’s a great idea. However, this will only be my second time participating.

Why? Well, I believe very firmly in the idea of staying on-topic. I don’t have a lot of time to read blogs, so when I go to one that I know I want to spend time reading, I am disappointed if that time is essentially wasted on a topic that doesn’t interest me. I assume most people feel that way. As brilliant as I think the “blog boost” is, the real question (for me, as an individual blogger) is whether it serves the purpose of my blog and my readers. Most of the randomly selected blogs, thus far, have not had much relevance to my blog topics. Given that fact, I was pretty excited when, this week, the random blog is a personal finance blog.

Let me introduce you to “Personal Money Tips“. This was the first time I’ve come across this blog, but I won’t be surprised if I see it mentioned frequently in the next few months. Why? Well, it’s all about the content. This blog is focused on providing useful, and usable, information to the average person.

Personal finance blogs are an interesting combination of “personal” and “finance”, and each one finds a different balance between the two; some are mostly personal, with stories and “what I learned” lessons; some are mostly finance, with the focus on numbers, concepts, and news. Personal Money Tips falls right smack in the middle. The current “series” is devoted to defining financial terms that will be useful to average people. However, the author also talks about his personal perspective on choices such as tithing.

Interestingly, the author, James, is from Malaysia. He says, “I don’t claim to be an expert in money but am getting better and wiser along the way. As I’m always curious about how someone achieve something, I’m always on the look out on why some strategies work and why [they don't].” I think this natural curiosity is one of the blog’s biggest strengths; its weaknesses, in my opinion, are the sometimes-obtrusive ads and minor punctuation and grammar issues. However, I’ll gladly overlook those qualms in the interest of reading James’ useful articles.

ShareThis

I just discovered AddALL and am hooked. AddALL is a book price comparision site that’s getting me better results than all of the methods I’ve been using, and their sister sites (A Magazine Area, A Music Area, and A Movie Area) will help you in the same way when you’re looking for magazines, CDs, and videos.

What makes these sites so great? Their core functionality. I frequently use Froogle, which does a decent job, but Froogle doesn’t give me the final price… I have to visit the merchants’ sites and figure out shipping costs for myself. Sometimes these merchants make them hard to find. The price that Froogle gives me is usually not the price I’ll end up paying.

Not so with AddALL and friends. When I search, I tell them that I’m in the Continental U.S.A. (for shipping costs) and Idaho (for tax rate). All of my search results include shipping and taxes, so I can tell upfront that I will be paying exactly $22.98 for “Art Of Project Management” to be delivered to my doorstep (significantly cheaper—and easier!—than my previous plan to buy a discounted B&N gift card and purchase the book with my sister’s prefered B&N card).

I like that AddALL is book-specific (and the other sites are medium-specific). That means that the merchants are pre-selected with the intention of pointing people to books, and I don’t have to worry about all of the off-topic results I get with Froogle or eBay.

I am also appreciative that AddALL actually has a business model: when you purchase books through their site, they get a commission. I’m fine with that, and consider it a good thing. Too many “cool” sites started as hobbies or good ideas end up costing the creator too much to maintain and go away. The fact that there is a reasonable expectation of income for them (at no cost to me) gives me hope for the longevity of this excellent service. I’ll gladly buy though them!

Bottom line: this service is a fast, streamlined way to find the best final price for that book you’re pining for.

ShareThis

I just read a very sobering article that is documenting the woes of some families who have interest-only mortgages or adjustable rate mortgages (ARMs). I highly recommend reading the whole article (especially if you’re in this situation or know people who are, because there are resources mentioned at the bottom that might help) but here are some compelling quotes.

Now, the real estate market is cooling, interest rates are rising and tens of thousands more Americans are starting to have trouble paying their mortgages. Nearly 25% of mortgages - 10 million - carry adjustable interest rates. And most of them went to people with subpar credit ratings who accepted higher interest rates, according to the Mortgage Bankers Association.

Did you get that? 25% of mortgages nationwide. It’s even worse in some areas:

What worries experts such as Christopher Cagan at First American Real Estate Solutions are the adjustable-rate loans made in 2004 and 2005, at the end of the housing boom. These loans were concentrated in the hottest markets, such as California, where about 60% of all loans last year were interest-only or payment-option ARMs. That’s the highest such rate in the country.

And it’s already starting to bite the homeowners:

Already, in West Virginia, Alabama, Michigan, Missouri and Tennessee, about one in five homeowners with a high-interest (subprime) ARM was at least 30 days late at the end of last year, according to the Mortgage Bankers Association. After 90 days, the foreclosure clock starts ticking.

Here’s the unfortunate conclusion:

Of the 7.7 million households who took out ARMs over the past two years to buy or refinance, up to 1 million could lose their homes through foreclosure over the next five years because they won’t be able to afford their mortgage payments, and their homes will be worth less than they owe, according to Cagan’s research.

Serious stuff. As someone who has been expecting this, my goal is still to pay off my own (fixed-rate!) mortgage as soon as possible and hopefully be in a situation to invest wisely and help people avoid foreclosure.

How will this affect you?

ShareThis