Thursday, March 30, 2006 

Retirement: Is The "Number" Really That Important?

A few days back Make Love, Not Debt asked "Why The Rush To Retire?". Couple of bloggers responded with what exactly they mean by retirement, that what they want to do is not that financially rewarding and having financial freedom would be wonderful etc. One thing which I observed most of PF bloggers have a "number" in mind for retirement , sometime very precise such as a Jonathon over at MyMoneyBlog thinks $1,500,000 would be pretty good, Boston Gal Jane Dough went even higher $3,376,500, good luck to both of them and I'm pretty sure they will get there.

Every now and then I tried to come up with the "Number" for myself based on different retirement calculators it varies somewhere between $2,500,000 (simple life) and $4,000,000 ( well if I go with a little less simple life). But then I always ask what if I don't get to this "number",is is that important? Would it be that bad? In reallity the "number" is just another desire. May be I should list all my desires when I retire and see where this "Number" fits among those desires. Here is my list (in the order I desire them):
  1. Family: I think it would wonderful to be surrounded by a bunch of children, grandchildren, nephew, nieces every now and then.
  2. Good friends: I think friends are important at every stage of life but are really important when you have all the time in life. We can't not only share our past but still plan for the future.
  3. Good health: I very much want to enjoy those golden years healthy. I don't want to die in poor health few years after I retire.
  4. Self respect: I want to live feeling like I'm doing something worthwhile, returning something to society, not just waiting for that final day.
  5. May be the "Number": To have everything else that I desire :)

Wednesday, March 29, 2006 

Best Cashback Card

Part of their Ultimate Savings Guide Kiplinger's has an article on cashback credit cards. To determine which cards are most rewarding, they took a generic spending scenario by assuming that one spends $35 a week on gas, $100 a week on groceries and $1,000 a month on everything else, including $100 at the drugstore and $100 to watch movies, at home or at the theater. The winner is:
Chase Rewards Plus Visa, which gives a 5% rebate on all the basics -- gas, groceries and drugstore items -- plus 1% on other purchases.Total annual rebate in this scenario is: $493. (Not a pocket change).
The runner up is *my current Cashback card*, Citi Dividend Platinum Select. (5% rebate on purchases of gas, groceries and drugstore items, plus 1% on everything else.) Annual rebate cap of $300.
Since I don't reach that $300 annual cap, I think I'll stick with Citi card. I used to have a Chase Perfect Card till a few years back which gave pretty nice cashback at that time but I wasn't very impressed with their customer service. The worst case was when they didn't update my billing address in their recoreds though I updated through their website.


Citibank Offers 4.5% e-Savings Account

We have a brick and mortar bank with competitive offer for a high-yield savings account. Citibank just re-introduced its e-Savings Account with the very competitive rate of 4.50% APY. It seems they waited till Fed increased the interest rates. No minimum balance is required but to open a Citibank e-Savings Account you must have or open a checking account, you can choose from Citibank EZ Checking, Citibank Account, Citibank Everything Counts Account or CitiGold Account relationship package. I currently have Citibank EZ Checking account and I see a number of advantage with opening an e-Savings account:
  • You have access to your money via ATM or local Citibank branches in your area. They have quite wide physical branch network, check if there is one near you.
  • *I am assuming* Transferring money from your Citi checking account to savings account will be immediate and will not take days as it does with online savings account.
  • Their website has far better user interface when compared to HSBCdirect, Emigrant Direct and ING.
  • Also if you are doing 0% balance transfers and putting money in a savings account to earn interest for a year or so. Citibank offers some of the best 0% balance transfers offers, it will be much easier to setup minimum monthly payments from your savings account to credit card.
  • If you have any Citi credit card it will qualify towards minimum balance requirement for checking account.

Overall it looks like a good total banking package.

Tuesday, March 28, 2006 

Fed Increases Interest Rate to 4.75 Percent

Today Federal Open Market Committee voted unanimously to raise the benchmark federal funds rate target a quarter percentage point to 4.75 percent. This is 15th straight hike and it stands at the highest level since April 2001. Now for an average consumer since it influences prime rate it'll make any kind of borrowing such as credit cards, home equity lines and second mortgage rates, attached to prime rates more expensive. At the same time it'll have a positive affect on interest rates for CDs, MMAs.

It is quite possible that during this year there will be another one or two increases of quarter percentage points before Feds put a hold. In my opinion it will be a good time to move some money to long term (2-3 years) CDs, it may give better returns as compared to equities.


There Are 8.9 Million Millionaires In America

According to CNN Money there are 8.9 million households in America worth $1 million or more excluding their primary residences. The best part is number keeps climbing year over year (except a few years when any large scale bubble bursts) and is at the record level today.

Here are couple of interesting statistics from the article that stand out:
  • Forty-six percent of those surveyed have invested in real estate like a second home or rental properties. So if this housing bubble bursts we may see a drop in coming year or two.
  • The median age of the head of millionaire households is 58. So most of them made it good old way "Earn, Save and Invest wisely". If we take out Hollywood celebrities and Google employees ( look at the table based on counties on right) the median age may even go higher. I guess if all keep following same path we'll be there some day.

Monday, March 27, 2006 


Here is my first post. After thinking for many months about starting a personal blog I finally decided to do it. I'm in my early thirties, living in San Francisco bay area, employed in a technology company. I’m by no means an expert on anything and I don’t claim to be, this blog will be about things I come across for a happy and prosperous life.

So here I say Hello World!!