WTF are ETFs?

Pardon my French, but when I'm reading financial magazines and sites, it seems that ETFs are coming up more and more often. Which begs the question, WTF are ETFs? I've wondered it for a while, but never looked into it much. Well, today (or last night I guess) that changes. Here's what I found:

ETFs stands for Exchange-Traded Funds. What are they? Well, when a daddy stock and a mommy mutual fund love each other very much... Bet you didn't think things were going to get all rated-R up in here. That is a good way of thinking about it though, or at least one way of thinking about it.

Basically, an ETF is a collection of individual stocks, bonds, or other securities like a traditional mutual fund. Except it is priced and traded throughout the day like a stock. So, why would you want an ETF instead of a mutual fund?

1) You can buy and sell them at any point during the day, including shorting, limit orders, etc.
2) The annual expenses are generally much lower than mutual funds.
3) Because of the underlying structure, they are typically more tax efficient.

There are also a few things to watch out for, like commissions, which can eat away at the gains from lower annual expenses. However, depending on your broker, there could be no commissions at all.

Having learned the information listed above and doing some additional reading at my brokerage (Vanguard), I'm thinking that we will convert our mutual fund holdings into ETFs. I like the idea of being able to buy into an index fund during the day and knowing what price I am paying.  The tax and expense efficiencies don't hurt either.

Do you invest in mutual funds or ETFs?

Off The Hook

Photo by HeatedGround

Finally after years of trying, I have an announcement to make...

We're canceling our landline.

I know that some of you have been waiting to hear this news and others may have thought it might not ever happen. In our defense, we've been trying since we graduated from college. We've tried it in numerous different houses, including Mrs. K's parents' when we were between houses. To make it even worse, it seemed like everywhere we went people had canceled their landlines. It made me want to so bad. Well today, finally, the day has come.

Seriously though, I'm pretty excited to be canceling our landline today. It's something we use maybe once a week, but pay almost $40 a month to have. It may just be me, but $10 per phone call is a bit much. I could take a taxi to a pay phone in town, buy some lunch and taxi home for less money per call. $500/year in my, I mean our, pocket. That's right we have one pocket. Sharing is caring after all.

I realize (Mrs. K told me) that I've been on a bit of a cancelation binge lately. I'm not trying to make anyone feel guilty for indulging in the extravagances of more than four TV channels and a home telephone. I'm just putting things out there that we are doing that will hopefully allow us to 1) have the option to live on a single income in the future, 2) retire early and 3) see the world (and by world I mean anywhere that I don't have to fly to get to). That being said, I think we're done with the cancelations for awhile. Although, I'm watching you second car, be afraid, be very afraid.

How much do you pay for your landline? Or are you off the hook like us?

Quick Money Saving Tip

Photo by JodyDigger

Here's a quick money saving tip that I learned in college and used last weekend. Don't pay someone to cut your hair when you have someone nearby who will willing (or begrudgingly) do it for free. Although, if you're reading this while in college, be careful who is volunteering to cut your hair for free. Maybe a breathalyzer screening would be in order before anyone plays with the scissors.

Obviously this advice is probably tilted a bit toward the male reader. After all the times I've let Mrs. K trim my manly mane, she has yet to let me cut a single strand of her hair. Sure she says she'll let me have a stab at it, but when I break out the scissors she all of a sudden has the desire to weed the garden. Go figure.

Fair warning, if you're having a spouse cut your hair it can put a little stress on the relationship. The first few times there will be tears, tempers and maybe a little blood. But I'm here to tell you that it gets easier. Thankfully it also gets quicker too. I remember one of our first home hair cutting sessions back in college. We were watching TV as I was getting a trim and there was a tornado warning off to the west about two hours away. Well, I'll be damned if we didn't have to interrupt the haircut still in progress and head for shelter.

The best part for me, other than saving money, is that I get to avoid the standard haircut conversations. Not that I blame them, it's sort of part of the job I guess. However, I'm a bit socially awkward. I'd rather sit in a chair and get a cavity filled than sit in a chair while being asked questions by a stranger who couldn't care less about the answer. Which means unless I've done something to really tick Mrs. K off, it's much more enjoyable getting my hair cut at home.

There you have it. A quick way to save a few bucks a month, without too much work. Although I'm not sure Mrs. K feels the same way.

Fairs Are Fun Part Deux

So Many People, So Little Patience

Who would have thought after not going to a fair in the past several years I would hit up two within a month's time. Not me, that's for damn sure. See, I'm so shocked I introduced some sailor talk into the blog.

Anyway, yesterday Mrs. K and I took a day of vacation to go to the Great Minnesota Get-Together (aka the Minnesota State Fair). I guess calling it a "Get-Together" is supposed to make you feel better when you're touching more people than a sob story on Oprah. This would be my second time going to said fair, and I'm not really sure how she convinced me to give it another go. A few years back we went and I remember it being about as fun as breaking my arm in three places combined with my sister dressing me up like a girl complete with makeup. I don't do well in crowds of people and it was not a good time had by me. But being the loving, caring husband I am, I thought I'd give it another go this year.

Unlike our county fair visit a month ago, this time I was prepared for the entry fee. This way the sticker shock happened at home instead of at the gate. It was $12 per person to get in, plus $12 for parking. We saved $2 on parking by getting a spot just outside the fairgrounds (it was jacked up to $15 by the time we left, good thing we made it in early).

What did we get for our $34? Well, parking and entry, weren't you paying attention just now? There was actually a ton of stuff to see. We looked at old tractors, cars, snowmobiles, motorcycles, atvs and lots and lots of people. I could sit and watch people all day. Not in a creepy stalker way mind you. We had some fun sitting and watching people at the giant sing-a-long. It was sort of a group karaoke. There's 40 or so microphones in front of a giant screen and everyone just let's it rip. It's hard not to have a good time watching a guy in his forties and another in his sixties belting out some Taylor Swift. Good times!

Then there's the food. What's better than twinkies? Deep fried-twinkies on a stick. Like bacon? They have it on a stick too. Basically anything you want they have deep-fried on a stick. Including fruits, candy bars, pizza, and even alligator. Although I'm not sure how fresh the alligator is since I haven't seen any around Minnesota in awhile and by awhile I mean ever. Unfortunately I can't give you much of a food review because Fat K has to be kept in-check, so there was no deep-fried stick sampling. I did however have some watermelon lemonade. Since I'm not a real big watermelon fan, surprise surprise, I'm also not a fan of watermelon lemonade. The soft pretzel we had was amazing though and the frozen yogurt wasn't bad either.

The highlight of the day was the Stihl Timbersports lumberjack show. We just happened to walk by it on the way towards the exit and noticed people starting to sit down. If you've ever seen the Timbersports series on ESPN, it was a mini entertainment version of that. Lumberjacks and lumberjills log rolling, chainsawing, 40-foot speed climbing, etc. It was a pretty entertaining hour or so. It kind of made me want to take my shirt off and split some wood, you know, man stuff.

Without the lumberjack show, I wouldn't have felt very good about our $34 spending spree plus food costs. With it I'd say it was a fairly enjoyable time. We probably could have gotten a little more for our money with some additional planning up front. Next time, we'll probably look at the schedule of events and plan out the day a little better so that we can enjoy more of the free performances that are available. Also, I think we'll stick to weekdays for our state fairing. Any more people and my day (and Mrs.K's by association) would have gone downhill in a hurry. Wait, did I just say next time? Pretend you didn't read that part.

When was the last time you went to an event with a high concentration of people? Was it worth the price of admission?

SaveUp

Today I'd like to make you aware of a rewards program. This isn't your run-of-the-mill credit card rewards program either. This rewards program has nothing to do with credit cards, at least not spending money on them. This rewards program is about saving money. Even better, it's free.

What is it?

The program I'm talking about is called SaveUp. Basically, it's a free program that rewards you for being financially responsible. Instead of rewarding you for spending, SaveUp rewards you for things like depositing money into your savings account or making a mortgage payment.

How does it work?

I'm still pretty new to it, but I'll sum it up the best I can. After you sign up you start to earn credits. You get 200 credits for adding financial accounts, 1 credit for each $1 you add to savings, 1 credit for each $1 deduction to your mortgage balance, you get the idea. As you get credits you redeem them for plays. Plays are what you use to play for rewards. You get 3 plays per day. Plus, you can redeem credits to get up to 5 more per day. So each day you can play 8 times.

What do you play?

There are three different ways to use your plays on a bunch of different rewards. The three ways are instant win, drawings, and jackpot. Instant win has three different little "games" that you can choose from. Sort of like scratch and win lottery tickets, only instead of scratching you're clicking, which sounds much more appropriate. The drawing plays just give you a number and then you are emailed if you win after the drawing ends. For the jackpot you pick six numbers and pray, lots and lots of praying.

What can you win?

There are many different rewards that are changing all the time. You actually can vote and/or suggest what you would like to see as a reward. Current gift cards include $100 for Whole Foods (best grocer ever), $5,000 Best Buy, and $100 Southwest, just to name a few. Some of the other rewards are cruises, cars, vacations, and my personal favorite, straight cash homey.

How do I get started?

It's easy to get started. All you do is sign-up for a new account and then start adding your financial accounts, using your normal online access logins. SaveUp will then automatically update your accounts and award you credits. Then start playing.

Bonus

There will also be occasional financial videos that show up on the SaveUp home page. You can watch them, learn a little about whatever the topic is, and then get 30 credits for acing the quiz at the end. It's a quick way to grab a few credits and maybe learn a little something at the same time.

Another thing that sometimes shows up on the SaveUp home page are challenges. These are cool little goals that you can accept for credits when you complete them. Things like two days of no spending for a certain account or depositing $50 into your savings within the next seven days are a couple of examples.

There you have it. A free program that rewards you for being financially responsible and doing things that you should already be doing. So why not keep doing what you're and maybe win a little something on the side. I haven't won anything yet, but I'll make sure to let you know when I do.

I'd like to thank Greg @ Club Thrifty for making me aware of this website.

Note: If you sign up using one of the links in this post, I'd get a few credits and eventually maybe a play or two. So no big deal, but it's awfully convenient that the link is right there.