Personal Finance - 2/14 - Joshua Kennon

American Express Prepaid Card Review

November 18, 2012 By Joshua Kennon 9 Comments

Most of the time, when a financial product crosses my desk, I groan as I read the fine print - it doesn't matter if we are talking about an index fund that should have a 0.18% expense ratio that instead charges a staggering 2.26% or a credit card that hides hidden fees and interest charges that exceed rates I would consider usurious. When American Express announced their new American Express Prepaid Card, I wasn't sure what to expect but knew I would have to review it whenever the terms … [Read more...]

Filed Under: Credit Cards

Household Income, Net Worth, and Unemployment Rates By Education Level

November 3, 2012 By Joshua Kennon Leave a Comment

The most recent statistics on household income, net worth, and unemployment, sorted by education level, are really interesting. Following our discussion about the splits that have emerged along geographic fault lines in the electoral body, I thought it would be important to highlight the economic differences and how enormous the income inequality is for the median high school drop-out compared to the median college graduate. Unemployment By Education Level During the depths of the Great … [Read more...]

Filed Under: Economics, Making Money, Politics, Religion & Culture

If Our Banks Were Structured Like Pictet & Cie, The Banking Crisis Wouldn’t Have Happened

October 30, 2012 By Joshua Kennon 2 Comments

In Switzerland, there is a 207 year old private bank called Pictet & Cie that caters to the the richest of the rich. It has total assets under management of of 373 billion Swiss francs, or just shy of $400 billion in United States terms. Through it, you can hold investment in more than 80 different countries spread out among a network of sub-custodians; a service so well run that is consistently ranks among the top in client satisfaction. The bank has offices in Amsterdam, Barcelona, … [Read more...]

Filed Under: Banking

Tax Returns in Norway are Public

September 21, 2012 By Joshua Kennon 6 Comments

In Norway, the country believes in such transparency that the tax returns of citizens are published online and in a searchable database, along with town and date of birth. If you want to know how much money your family, friends, preachers, teachers, doctors, lawyers, accountants, and trash collectors earn, you put in their name and, in a few seconds, there it is. Also included is a series of statistics showing where the person falls in the various income and demographic charts to compare … [Read more...]

Filed Under: Taxes

Building Wealth Is About Behavior: A Case Study of American Express Rewards Points and U-Promise

September 18, 2012 By Joshua Kennon 8 Comments

Williams Sonoma Ruffoni Copper Pots Hand Hammered on American Express Reward Points

Most of you probably know that I am completely, hopelessly in love with American Express Rewards Points. Every year, I redeem thousands of dollars in gift cards to stores like Barnes & Noble, Brooks Brothers, Bergdorf Goodman, Tiffany & Company, and Williams-Sonoma. These redemptions, which represent a delayed rebate expressed as points that can be allocated to different vendors, are like experiencing Christmas or birthday gifts throughout the year. I could just as easily use a … [Read more...]

Filed Under: Making Money, Saving Money

The Top 14 Federal Income Tax Payers of 1924

August 9, 2012 By Joshua Kennon 3 Comments

In Wealth and Democracy: A Political History of the American Rich, Kevin Phillips looks at the biggest Federal income tax payers shortly after the income tax was introduced. TaxpayerTaxes in 1924 DollarsTaxes in 2012 Dollars John D. Rockefeller (oil) $6,278,000 $84,249,292 Henry Ford (autos) $2,609,000 $35,012,170 Edsel Ford (autos) $2,158,000 $28,959,856 Andrew Mellon (finance, oil) $1,883,000 $25,269,420 Payne Whitney … [Read more...]

Filed Under: Taxes

If You Want To Be Rich, Learn to Live Within Your Means

July 8, 2012 By Joshua Kennon 3 Comments

We've touched on the Micawber Principle in the past. The foundation upon which all success is built is basic: You must live within your means. You need to generate more cash than you expend so that there is a surplus remaining. It is that surplus that determines, to a large degree, the life you live. You can use it to invest in your family (a house, car, education, furniture, experiences, healthcare), you can use it to grow your future income (buy investments such as private businesses, … [Read more...]

Filed Under: Saving Money

Venture Capitalist Nick Hanauer at TED on Tax Rates in the United States

May 21, 2012 By Joshua Kennon 2 Comments

There is a video by successful venture capitalist Nick Hanauer going around the web. It came from one of his audience participation speeches at TED. Watch it. It's only 5 minutes and 50 seconds. There is a lot of truth in what Nick is saying. Where I have some reservations - not criticisms, just observations - and differ significantly with him as to the conclusions he draws are as follows: I absolutely agree that the middle class is the primary creator of jobs. I also agree that … [Read more...]

Filed Under: Economics, Taxes

When You Borrow Money, You Are Renting Someone Else’s Savings

May 18, 2012 By Joshua Kennon 6 Comments

When people talk about "borrowing money", it isn't entirely accurate. What is really happening is renting someone else's property. It doesn't matter if you are talking about credit card debt or student loan debt. Imagine I own a $100,000 lake cabin. You want to take your family on a vacation this summer, so you approach me and say, "I see you have this piece of property. I'd like to temporarily take possession of it, for an agreed upon length of time (2 weeks), and in exchange, I will … [Read more...]

Filed Under: Debt Management

Mail Bag: Should I Take Out Student Loans to Invest?

May 16, 2012 By Joshua Kennon 5 Comments

Federal Stafford Student Loan Debt Promissory Note

One of the single most common questions I receive from friends, family, and readers who are enrolled in college is, "Should I take out student loans and invest the excess above and beyond the cost of college?" No doubt spurred by the historically low rates - the interest expense on a typical government student loan is lower at the moment than the dividend yield on high quality blue chip stocks - the topic brings up a host of financial considerations. The General Answer to, "Should I Take Out … [Read more...]

Filed Under: Student Loans