Today Google Voice has been made publicly available to anyone. I have just been using Google Voice for about one month with my landline, thanks to my IT friend’s invitation into the program. It has been terrific.

Here are some of the highlights in my trials:
1. It will ring ALL of your (mobile) phone numbers if you list them out. This means that you could use the Google Phone number as the main permanent contact phone number for family & friends, and you could change your mobile plans/phone numbers in whatever ways you want, and it won’t change even after you move out of the area. And Google Voice will further block any spam callings & mobile texting messages automatically.

2. It will TRANSCRIBE any voicemail messages into text. That accuracy of the transcription is simply amazing. I tested it a little bit, and it’s 100% accurate so far. Creative usage of this would be that you could use it yourself for any typing needs for blogging, writings, etc.

3. Obviously not many people write these days, but because the messages are transcribed, it becomes a searchable database, which Google excels in doing. If you receive many voicemails for your business, this will be an excellent way of handling your high volume of voicemail messages (although I’m not sure if business are allowed for using Google Voice).

4. The best of all you get everything for free, AND a free US-registered phone number. I know many of those “free-for-ever” IP phone services (like Ooma), which still require you to pay $5 to $10 every year for a valid US phone number registration (to government I believe). Guess what! Insanely profitable Google pays that for you, and you get to pick your own phone number!

5. Free conference calling capability which you don’t need to pay extra.

6. Google intended the Google Voice for mobile phones (and by the way, it doesn’t work with prepaid T-mobile phones). However, you can use it for landline too. I have been using my Google Voice number to dial around from my landline phone for FREE US domestic calls, and very competitive international calls. Calling quality is most of the time BETTER than any IP phones that you can get (Yeah, I tried and quited on Ooma already). Here is the detailed dialing instructions which you need to follow exactly once you get your Google Voice phone number:

• You MUST set up your voice mail password from your Google Voice account http://www.google.com/voice/ (after you log into your gmail obviously).
• Dial your Google Voice number (from your landline) which hopefully is a free local call if you have chosen your number wisely.
• Don’t let it ring any of your phones, and then you can press * (star) to enter into your voice mail. Punch in your voice mail password.
• Voila! You can press 2 to dial out, possibly after listening to or skipping all of your recorded messages.

Get your free & favorite phone number before they get taken now at www.google.com/voice!

I just received this email from Bing cashback program:

Dear valued cashback customer:

We are writing to notify you that the Bing cashback program will be discontinued, and the last day to earn cash back on your Bing Shopping purchases will be July 30, 2010.

Until July 30, 2010 9:00 pm PST, it’s business as usual so continue to take advantage of great offers from your favorite merchants. You can redeem all of your earned cashback savings consistent with the cashback terms and conditions and access the Bing cashback customer support system through July 30, 2011. We encourage you to redeem your cashback savings and to further support redemption, we are waiving the $5 minimum payout effective July 31, 2010….

It’s a pity to see it goes. I guess good things just don’t last forever. I have definitely enjoyed the total savings of $29 cashback on already discounted online goodies that I was able to find.

Make sure you redeem your remaining cashback in your own account before the end of July.

I have just a few best friends. I only told my IT friend about my blog because I needed several helps on the repeated hackers’ attack on my site. On mother’s day, my buddy and I talked almost 3 hours about his personal finance, answering every conceivable questions that he had (not that this is the first time). Kind of reminded me that I should not tell anyone else, .

My IT friend is basically at the same age as I am. But in terms of accumulated assets, he is quite behind me (not that I’m trying to brag, my friend). He is one of the few people who I would call innately smart. And I have always encouraged him to go further beyond what he can achieve because he really can. He started out inherently behind me because he helped paying his brother’s college education. This is probably unheard of in a western American society, but we Asians would do that for our family members. Sometimes, an entire family would work together (financially) towards one goal, sending just a person for higher education, and then in term, this person would give back once he is able to lift up his financial and professional status.

In any case, my IT friend is buying a house, and has been asking me lots of questions even before our 3-hour talk. I directed him to my rent-vs-buy financial calculator. We worked through all the numbers together. Besides the tax benefit that was not very clear initially, I think everything else was straightforward. On the “tax benefit average rate on property tax+interest”, one needs to account for the standard tax deduction (now at $11400 for federal tax) to calculate the tax benefits from itemized deduction of property tax and mortgage interest. It’s often A LOT less than one’s marginal tax bracket, on the contrary to the realtors’ claims. At his particular city and state, buying a home makes good sense because using conservative assumptions such as 0% appreciation rate for home, he can still break even in about 4 to 6 years. But that is with an implicit assumption of upgrading his lifestyle (for his anticipated family need) to a bigger home, paying a higher equivalent rent of $1900 instead of his current $1500. Most people buy home, thinking that house is an asset. But no, the home is only an asset, unless buying is better than renting. Otherwise, it’s a liability that bleeds your pocket. And buying a bigger home than what you need is NOT investment. Do not justify your ego’s need with the illicit logic of making a good investment. One way or the other you will ALWAYS pay for the expanded space with your own pocket.

Besides the home, I also advised him to read through “My Advice” page. Summarizing for him, to get to millionaire status, it’s basically
1. Acquiring skills/network (for an income source).
2. Relentless savings for accumulation.
3. Proper investing for preservation.

I tried to emphasize to him that the 3 best time to save (in the right order) is
1. Right out-of-school, and before getting married.
2. Before having kids.
3. After kids finish college.

Unfortunately, most of the American young generation either take up too much college debt, or frivol through their best years to save. Those early years obviously make a huge difference in the long run.

Then I also strongly encouraged him that it’s never too late to save, and he still has a real chance of making into millionaire club. Why? His current household income is even higher than my 2007 base salary (or my household income for that matter since my wife doesn’t work). On my job(s), I’ve “slaved” through almost 7 years at a way-below average household in my area, accepting a 35% salary cut, and yet I was able to make into the club. If I could do it, then he or anybody CAN do it too. The key is obviously to somehow maintain your (hopefully significant amount of) saving within your own acceptable living style. I advised him multiple times to go through his own credit statements. Pulled out the last 3 months. Have a monthly budget and compare to what really happens. Re-visit after 6 or 12 months. Monitor spending until it’s within budgeted expectation. The budget needs to be realistic to reflect the spending. It’s the guide of how far your saving effort would go. Budgeting is a personal experience, and it’s where your emotionally material desires fight with your goal-oriented mind.

He has not got into many needed investing side of personal finance yet. But again, it’s very important, since the only way to get into the club is
1. First, you must have it (through earning & saving).
2. Second, you must preserve it (through investing).

I encouraged him that after 15 years to come back to my blog to write about his becoming millionaire experience. As the second part of the title of my site states, “Yes, you can do it too”. That is REALLY true for MANY of the people out there. But if you just started saving at 50, then I’m sorry that I’m not going to be like all those authors writing “feel-good” personal finance books out there, and tell you that “yes, you can do it too”. But the whole point is not to become just another millionaire. What your financial security (whether it’s $400K or $700K) gives you is a peace of mind. It’s when you walk into a car dealership to buy a car, pay cash to buy the car, and you don’t even need to fidget about whether you can make the next month mortgage or car payment. It’s if your family member gets terribly sick, and requires $100K medical treatment beyond insurance, and you don’t even need to worry about sky collapsing on you, or selling the house to pay for it. It’s when your kid goes to college, and you don’t need to say to him or her, that “sorry, you really have to pay for yourself”, or that “sorry, you can only go to state universities.”

Striving towards wealth is truly about personal financial responsibility, and not about millionaire bragging rights. It’s about taking care of oneself, one’s family, and hopefully extending the helping hands to so many needy people out there. That’s what my site wants to convey to everyone of you out there (even when I just get to sleep 4 or 5 hours a day). “My 1st million, and YES, you can do it too”. In fact, “YES, you should try to do it too.”

Here is one of my favorite quote from my favorite books, “Karma Yoga” by Swami/Yogi Vivekanada (p.27):

A householder (as opposed to a monk) who does not struggle to get wealth is immoral. If he is lazy and content to lead an idle life, he is immoral, because upon him depend hundreds. If he gets riches, hundreds of others will be thereby supported.

For those who are not aware of eye-fi, it’s an SD memory card that has built-in wi-fi, allowing automatic uploads of your photos to your PC & designated websites. I have held off buying eye-fi for the longest time since this great product first came out. Finally I yielded to my necessity of just saving 15 to 20 minutes per picture download. What I was doing for all of my pictures were simply not working. I kept buying another cheap 4GB or 8GB SD memory card when it got full (after some 1000 or 2000 pictures at 4MB per photo). But my pictures stay on SD card “forever”.

Right now you can get 4GB Eye-Fi for $44.99 – 7% off via Bing Cashback + local taxes or about $41.85 + local taxes, assuming you choose store pickup option at OfficeDepot.com (2nd link in the Bing search result). The smallest eye-fi is 2GB and it costs about $40 also. So this 4GB is a pretty good deal. I never really love anything from Microsoft, except its Bing cashback. Anything that I buy online now, I always search it through Bing cashback first, and see if I could shave off additional 5% to 10% on an already cheap price.

This price is only valid until May 1st, 2010. There is a temporary price reduction of $5, which is not even reflected in Bing search. If you want to get your hands on this, act now. But do make sure that you check the camera compatibility list at eye-fi site, so that you don’t run into any problems.

Very infrequently I come across some articles that are so well written that I feel obliged to recommend them to people. And I found it at Irvine Housing Blog. IrvineRenter, the owner of the blog has written a couple of excellent articles that should be must-read for every home buyer.

On “Valuation of Lots and Raw Land”, IrvineRenter explained in details how the valuation of an investment in raw land would work out. To sum it up, land investment works like a call option on the housing market.

On “Loan Assumption is the Appreciation of the Twenty-Teens“, IrvineRenter gave his best advice (and I concur too) that the best bet in building your home equity is probably by buying with an assumable AND fixed-rate loan. Unfortunately, as far as I know, the only assumable loans these days are FHA loans, which have higher fees in general. Why is that? A good deal to the borrowers is always a bad deal to the lenders. The scarcity of such loans automatically tells you that assumable loans are not good for lenders.

And at last, on “Fundamental Valuation of Houses – Part 1“, IrvineRenter explained in details about the math of home ownership cost. His article almost acts like a companion manual to my online java housing cost calculator. All of the factors that he has mentioned, I have included them in my online housing calculator, plus commute cost difference. But just one caveat, garbage in, garbage out. My calculator is only as good as the validity of your input assumption. If your assumption on the housing parameters such as rent/housing inflation or tax rate, are inaccurate, then the results will be inaccurate as well.

So what’s the buying strategy for the housing market? In case you missed it, it’s using assumable fixed rate loan. On a longer term, I believe that the mortgage rates will be going up. Contrary to all the unscrupulous realtors, the best time to buy real estate is when the mortgage rates are at the highest, not when they’re at the lowest. Lower mortgage rates always cause the housing valuation to expand, while higher mortgage rates will rein in the price. Assuming a forward picture of higher than normal inflation, and mortgage rates trending higher, the inflation force may arrest and balance out the decline caused by higher mortgage rates. Nominal housing prices may stagnate for a decade or even two decades, but inflation-adjusted price will continue to decline. Such picture does not bode well for many participants. The renters will see their rents going up due to general inflation. The new home buyers may still see price declining if the nominal prices have not reached bottom. Worse yet, if the equivalent ownership cost of their home is higher than prevailing rent, then they’re effectively speaking draining any potential savings that they could have built without buying a home. In such picture, the only potential remedy would be to have an assumable fixed-rate loan, so that one could recover the price benefits between future higher mortgage rates and the current lower mortgage rates.

And if you cannot find such loan, make sure you put the least amount of down payment, and borrow as much as you can for 30 years fixed. Forget about adjustable ARM. The only way to short the bond markets and US dollar simultaneously and safely without margin calls is to borrow against your real estate holding.

This is the first time that I’ve ever tried to “bust the door” for black Friday sale. I went to Toys R us to get legos for my kids. The sale started at midnight, and I was 30 minutes late since I was going through global stock market news due to Dubai debt panic. Stocks are down 3% to 6% around the globe, and US will open with hefty losses too. Gold has already sold off in Asia by $50.

Anyway. At 12:35am, I arrived at ToysRus, and parked my car at a really far away location since the entire parking lot was basically full. Starting from the door, I kept walking to get to the end of line. It took me about 5 to 10 minutes of walking to get to the end of line, which is about 500 feet away. The store itself was full of people already, as I could see thru the window, and there are probably some 200 people outside waiting to just get into the store. I asked the person who was at the end of line, and confirmed that the line was indeed for Toys R us. Man, I couldn’t help but laughed. This is just crazy! Thirty minutes after the sale begun, and I probably won’t get into the store for another 40 minutes.

Realizing that the lego items that was on sale was most likely sold out already, I decided to go home instead. As I drove away from the full parking lot which was designed & allocated for 3 other big chain stores like Toys R us, I also noticed that all other stores are still closed. Boy, all the cars there were mostly for Toys R us, except for a few early campers at other stores.

I’m not sure where the recession is. Looks like the Thanksgiving & Christmas sales may not be too bad. If you want to look for bargains, you will have to find a way to beat others to store. I think I’m going to try online. Bing search engine is providing cashback for various stores. At Walmart.com thru Bing, you can get 15% off. Maybe that’s an easier way to get to your bargains.

Happy Thanksgiving.

I have noticed that Ameriprise, the auto insurance company thru Costco has been raising its price. I just have recently changed to GEICO, because when calling their sales agent, he was willing to not only match the prices from Ameriprise, but also lower the price by a little bit more.

A solid proof again that NOT everything at Costco is cheaper.

After my previous minor car accident, which cost GEICO about $500, they still did NOT raise my price as promised by their customer representative. I’m amazed, and a little guilty, since this is the first time ever that I take money out of the insurance system. GEICO was extremely unlucky in the sense that I have never had an auto claim in my life so far, which is about some 20-year driving history. For all of their great customer experiences, and my “under-water” account (a negative $130 return for the first six months), I’m giving them a thumb-up.

I’m 95% sure that you cannot beat this deal from all major insurance companies. I only pay for $370 every 6 months for two cars having

$100K/$300K body injury liability,
$100K property liability,
$1000 deductible for comprehensive on both cars
rejecting uninsured/under-insured motorists coverage
and $1000 deductible for collision coverage only on my 2-year old Honda Odyssey. My other car is a 10 year old Toyota Camry.

I believe GEICO is quite aggressive in acquiring new customers. So you should be able to negotiate with the sales agent for a little better price if you call them up.

I have blogged about “different ways for a busted refinancing plan” back in 2006 at the height of housing market. I argued that once the housing markets fall, most of the real estate “investors” will NOT be able to refinance out of their payment troubles. It was very clear to me that a housing Ponzi scheme simply cannot last forever, and was destined to pop. Of course, according to Greenspan, Bernanke, Wallstreet, and traditional news media, nobody could have seen the financial crisis coming.

I definitely thought that things would be worse in the housing markets. Due to various factors that I didn’t forsee, including Obama’s home affordability programs, delays in foreclosure processes by banks, and a dramatic drop in the interest rate curve, things are not terrible as of now. In fact, in 2009, housing markets actually went up (at least in California), sucking in the last bunch of ever-hopeful real estate “investors”. Regardless, numbers won’t lie, and let’s see how the negative amortization or option ARM homebuyers are doing.

Below is a summary from the monthly payment history based on a hypothetical case that I’ve made up for a California home ($500K, 20% down). I think it is pretty representative. You can get the original complete Excel spreadsheet here. All the interest rate data are from X-mortgage. I’m listing both MTA and COFI indexes which are the two most common indexes for option ARM:

Date	MTA (%)	11th District COFI (%)	Monthly payment (MTA)	Balance (MTA)	Monthly payment (COFI)	Balance (COFI)
2004	1.2383	1.802	1,286.56	400,042.88	1,286.56	400,230.78
2005	2.5042	2.515	1,383.05	402,760.80	1,383.05	403,981.61
2006	4.1425	3.759	1,486.78	410,981.87	1,486.78	411,293.82
2007	5.0292	4.224	1,598.29	424,437.96	1,598.29	422,556.80
2008	3.5283	3.111	1,718.16	436,514.40	1,718.16	432,092.15
2009	1.34	1.38	2,332.69	436,960.64	2,325.33	433,770.30

From the original teaser payment of $1286.56, the payment increased 7.5% annually, and is recast to about $2200 after 5 years from 2004. I think the more aggressive homebuyers who couldn’t cover the annual payment increase of 7.5% would have dropped out already. They either
1. sold and made some profits,
2. refinanced into another option ARM before housing markets dropped in 2007 (which will cause more problems later in 2012),
3. or defaulted already.
The more “conservative” homebuyers who were able to sustain thru 4 years of annual payment increases of a total of 30%, now will be facing an additional payment shock of 28% from $1718.16 to $2200. That is a total increase of 71% from the original $1286.56.

Needless to say, an increase of 71% in 5 years will be huge for anyone. Very few family will be able to make it thru a combination of salary increase, second job, and/or having non-working spouse going back to workforce. Unfortunately, refinancing to 30-years loan at today’s 4.75% will not be an option either, since the monthly payment for 30-years is about $2200, the same as the recast option ARM loan, if not more. I originally thought that these people probably would have problems with LTV or loan-to-value ratio. But Obama’s home affordability program has “solved” the LTV problems for these most of these homeowners. The monthly payment issue is still there. One cannot make an unaffordable home in the first place to be affordable.

Looking forward next year, once the home affordability program expires in mid-2010, we will probably get more defaults and walkaways from homes. Due to Bernanke’s cutting of interest rate, and a huge buying program in both treasury and mortgage market, current interest rates are temporarily held down. If the option ARM indexes like MTA and COFI rise up to 3% for example, the monthly adjustable payment will go up by another 25% to 30%. I don’t think the housing markets will recover anytime soon due to this impending supply of homes (from defaults of the option ARM loans).

So what should you do if you are one of the option ARM homeowners? There are many sites & articles that talks about foreclosure options. In my opinion, short sale would be the best choice (if you have this choice), since you won’t be liable for the deficiency judgment, and it will hurt your credit report the least. The second best choice is loan modification, although not many can negotiate a good deal with banks. The rest of the choices such as foreclosures are not ideal, but it’s probably earlier the better under the assumption that it does not affect your job prospects based on a much worse credit report.

Here is some of good sites & articles that I’ve found on foreclosure-related options. Some of the site owners are very helpful, and may be able to provide you with needed advice or services:

• Foreclosure option networtk. Hanna was particularly helpful to me on a couple of nasty legal questions.
• Foreclosure options from MSN
• More info on various foreclosure options from foreclosure university.

Not sure if any of you catch this story from NPR (national public radio). A homeless person gave $400,000 to NPR, and several other nonprofit organization.

Richard Leroy Walters was a retired engineer from AlliedSignal Corp, but who gave up all the materialism of this world, and what could be afforded to him. Didn’t have a car (but a bike), nor a home, but looks like he did own several stock-related investment, trading over the phone at the senior center. He was an “avowed atheist” but converted to Catholicism on his deathbed. It’s amazing that someone who owned so much, and yet didn’t take any enjoyment of any materialism, while mostly remained atheistic in that process. I have always thought that if someone is atheistic, he or she must take comfort in material things. I guess there are different higher souls.

There are some readers’ comments in NPR website, a few criticizing Walters using resources for homeless people. I must say that after all, Walters gave more than he had received (whether it was given before or after his death). For many, we don’t remember that whether we own a lot of money or owe a lot of debt, when it comes to living in this world, we are consuming resources and relying on others constantly. Our debt to this world is our consumption, whether we pay it fully or not. What would be better served besides paying in full with our hard-earned money is a grateful attitude towards everything that we received.

My wife is currently on vacation with my kids, and these days, I just cook my own simple meals, and bag my own lunchbox: rice plus tofu most of the time. I barely spend any money besides gasoline. I’m perfectly content without many unnecessary stuffs. When I wash the uncooked rice, I am always reminded a Chinese saying: “every grain of rice doesn’t come easy but with sweats of the farmers”. That was of course from the ancient days when many farming was not done through modern day machinery. Regardless, I’m grateful for the abundance of food that I can eat, for there are still too many hungry people in the world.

Oh, yeah, one of my few consumption besides meals is that I did buy a new book from local bookstore, knowingly over-paying $10 for it relative to Amazon.com. Since I frequent that bookstore, I hope that extra $10 goes to their pocket so that they won’t go out of business one day.

I admire what Richard Leroy Walters did. For his gifts, the world was made better.

Being the second bank after Citibank, HSBC has cut my credit card line from $7200 to $3000.

I don’t know how they evaluated this, but it is for certain that they don’t care that I have paid down all of the balance every month, and that my credit FICO score is at about 800 (well, if that means anything at all). And the speed that they do it is amazingly fast. Right after the monthly statement is cutoff, the credit line is changed immediately. I’m guessing that there must be increasing numbers of people who are behind and going delinquent.

Under normal circumstances, I would never advise people to get lots of credit cards. However, you should really get extra credits while you still can (and still holding a good job), before both banks and economy go tumbling down again. You should apply credits to different bank/companies, so that you could reduce the impact of credit card issuers cutting your credit lines after the fact. Especially for people who don’t have a lot of emergency reserve, I strongly advise you to load up your credit availability.

The wrong way to use your credit cards is to think that they are your money. Credit is not cash. Credit is for your extra financial buffer. Frankly, I think people need to be prepared for being out-of-job and without any income for 2 years at the minimum. Assume that you will go into “early retirement” for 2 years, and make sure you have enough credit/money to come out from the other end of tunnel.

So far, it appears that American Express still has very high credit limit. I have more than $15000 on that card thru Costco. If you need lots of credit, maybe you could try that.

It goes without saying that you should not get a card that has annual fee, build up more debts, etc. Better yet, you should get those cards that pay you back. Between the two cashback cards of HSBC & American Express last year, I had $500 max cashback from HSBC, and over $200 from American Express. That’s a total of $700 cashback. Not too bad at all. For some more details, here is my old post on this.