I really liked this article, with tips on how to sell items on eBay, from “adventures in daily living.” I haven’t sold anything on eBay for a while and plan on incorporating some of these tips next time I sell something.

Philby

It’s true that Citigroup has taken huge losses from their risky investments in mortgage backed securities and currently expects write-offs of up to $15 billion over the next two quarters, but with a equity capital base of over $120 billion, the company has the means to weather this storm. They have a diversified investment portfolio and offer numerous other financial services, most of which are profitable.

Citigroup is trading at a lower price than at any time since 2003 and currently has a dividend yield exceeding 6%. They have increased their dividends every year for nearly 20 years and the key statistics still look solid. If Citigroup were to cut their dividend in order to free up more cash, or even fail to raise it next quarter, then there will likely be an even better buying opportunity for this stock.

While Goldman Sachs, who have played this mortgage crises better than any other major firm, has recently downgraded Citigroup, I think that long-term investors will find a lot to like about this stock. Investors who are looking to increase their levels of dividend income should definitely consider making an initial purchase now, and then look at reinvesting after Citigroup announces their financials results next quarter. For registered shareholder of Citiqgroup, Computershare offers a dividend reinvestment plan.

Philby

Disclaimer: Author is not a certified financial advisor and does not own shares in Citigroup.

However, I think the standard “Millionaire Next Door” advice on buying new vs. used autos needs to be updated to include a phenomena I noticed recently while shopping for a Japanese sedan. I won’t go into details here, since I want to save this topic for a future article, but do a price comparison between new and one to two year old Accords and Camrys and I think you’ll be surprised…

Philby

PS Check out my article, Top Tip: Check Your Insurance Coverage, which was included in this weeks carnival.

While more of their employees are now covered for catastrophic medical issues, a quick look at these plans shows that for Wal-Mart’s average employee, the comprehensive plans will be unaffordable. The coverage provided by the plans that are affordable is basic at best, and while it affords some financial protection from catastrophic illness, the preventative and routine medical benefits seem very poor.

Those articles, and recent e-mails from my HR people, have got me thinking about my own insurance needs. My employer offers a wide range of policies, and it can be difficult to decide which one would actually best suite one’s needs. In many cases, the cheaper plans not only have cheaper premiums, but require fewer out-of-pocket expenses if you stick to their in-network physicians. I’m a little paranoid about health care expenses, so I carry fairly good coverage, but after doing the math and seeing that the cheaper plan would have saved me hundreds of dollars, I may switch to the cheap plan, if I decide the extra peace of mind isn’t worth it.

I’d highly recommend that you periodically review your property, rental, health, life, and auto insurance policies, as applicable. One thing that particularly concerns me is auto insurance, which is one area where people tend to not have enough coverage and tend to over pay for coverage. A lot of insurance companies, particularly those targeting people with low socioeconomic status, advertise costly plans to “keep you legal.” The problem is that state’s legal minimums are fairly ridiculous, check out this reference for details. In California, the minimum property damage insurance requirement is only $5,000! And the people who have minimum coverage tend to be those who don’t have significant financial reserves to cover large expenses.

Bottom line: Check your policies regularly. Comparison shop once a year. The bottom end insurance policies and the top end insurance policies tend not to be cost effective.

Philby

Amazon.com gets a nice portion of my disposable income every year. I’m not going to name a specific dollar amount, but let’s just say that it’s comfortably in the four figures. I buy most of my books, DVDs, music CDs, and electronics from Amazon.com because I like their low prices and free shipping on any order over $25.

In the past, whenever I bought a book I would always buy a new copy, but recently a book I wanted was not available new so I was “forced” to buy a used copy. The copy I bought used was not in perfect condition, but while reading it, I realized something very important. The fact that the book was used may no difference whatsoever in regards to my enjoyment of the book. The jacket may have been worn, but the actual words contained in the book were no different. Additionally, the used copy was several dollars cheaper, even with shipping cost included, than the new copy would have been. Also, thinking in larger terms, I was “recycling” the book. In theory, the more people read each copy of the book, the fewer copies have to be printed. So, why haven’t I been buying used copies of books, movies, etc. all along?

One reason for not buying used, which I am a little embarrassed to admit, is that my ego gets in the way. As a middle class citizen of a prosperous western country, I often feel that I don’t “have” to buy used. Under this mentality, buying used is something that is “forced” upon those without the financial means to buy new goods. Because of my higher economic status, I felt like I had the “privilege” to buy whatever new goods I wanted.

To remedy this situation, I know ask myself, “Why shouldn’t I buy this used?” For some things buying new still makes sense to me, because of product warranties or for electronics with short obsolescence lifecycles (the dictionary definition of “iPod” is “a music device that lasts for two years”). But, if a used product can be had even slightly cheaper, I now jump on it. With my book buying addiction, I expect that this could save me several hundred dollars a year and will, in the long run, save a tree or two. Book Buyer’s Anonymous, or the library, could save me and the environment even more, but I’m not quite ready to take those steps just yet.

Here’s a good example. I was looking for a Japanese cookbook, and saw that Morimoto: The Art of Cooking has very good reviews, and looks interesting to me. At a local bookstore, this book would retail for $40 plus sales tax, but Amazon.com sells new copies for around $34, a savings of ~$6. But, click on the “used & new” link and you’ll be able to pick up a “like new” copy for ~$28, a savings of $6 off the Amazon.com price and over $12 off the bookstore price. But wait, I did a quick check on Half.com and found a used copy for $18 shipped! Saving me $22 off the retail price and $16 off of Amazon.com’s “low” price! Now I can afford to buy a second Japanese cook book!

Okay, it looks like if I’m going to use these savings to buy even more books, than I really should check out a BBA meeting, but still, you see my point. I’ve purchased a number of used items off Amazon.com and Half.com now, and every time I’ve received the items faster from individual sellers than I would have using Amazon.com’s free shipping, which frequently takes up to a week to post my purchases.

So, consider doing yourself, and the environment, a favor when you decide to pick up a copy of Planet Earth , buy a used copy. The used copy will cost you $50 less than a new one at your video store and they’ll be five less plastic discs and boxes that have to be manufactured.

Philby

Philby

“Without the estate tax, you in effect will have an aristocracy of wealth, which means you pass down the ability to command the resources of the nation based on heredity rather than merit,” Buffett told the New York Times in 2001. “[Repeal would be like] choosing the 2020 Olympic team by picking the eldest sons of the gold-medal winners in the 2000 Olympics.”

Under the current rules, estates with a value of up to $2 million will be exempt from federal taxation for those who die in 2007 and 2008. The exemption will increase to $3.5 million in 2009 and the tax will be completed repealed in 2010.  The law repealing the estate tax will expire in 2011, so those who die in 2011 will only have an exemption for the first $1 million of their estate, which is what the exemption was under the old rules.  After the exemption, up to 45% of the value of the estate can be taken in taxes.

So, if your wealthy relative, who left everything to you in their will, dies in 2007 or 2008 you will have a pretty decent $2 million tax exemption. If your rich relations die in 2009 that exemption will rise to $3.5 million and if they manage to live to 2010 you will get everything tax free. However, unless Congress changes the law, if your well-to-do kin die in 2011 you will only have a $1 million dollar exemption.

I see a lot of rich kids buying their parents gift certificates for discount sky-diving adventures in 2010…

Philby

Even for someone with a long-term outlook, such as myself, it’s hard to not overreact to these market swings. My initial instinct is usually to invest more when I see dips like these, as I view them as sales on good companies. However, take a look at American Mortgage Acceptance Company, ticker: AMC, which I have been a shareholder of for several years, and you’ll see that I’ve recently taken a huge pounding. At this point, I am reexamining the company to see if it’s still has a viable future. If it does, then it is likely that the stock is oversold at this point and is a bargain. However, this company has very little coverage, which makes it much more difficult to make a determination as to its’ true value at this point. I’ve always thought of this as a high risk stock, and have made sure that it’s a small part of my portfolio, so the actual financial damage is not great. It’s just that seeing a double digit percentage drop is always disconcerting.

For my fellow investors out there, if the past is any guide, then this market should have a lot of bargains out there for the investor willing to do their research and stomach investing in a down market. Good hunting!

Philby