Wednesday, July 18, 2018

Countdown to Financial Fitness: Looks Like a Scam to Me…

Countdown to Financial Fitness: Looks Like a Scam to Me…: Yesterday I received a Priority Mail envelope from an address I didn't recognize. Inside was a cashier's check for $1930.00 and a j...

Looks Like a Scam to Me…

Yesterday I received a Priority Mail envelope from an address I didn't recognize. Inside was a cashier's check for $1930.00 and a job offer. Whoopee!

The enclosed letter told me I had been selected as a Wal-Mart secret shopper. What fun! How did they know I've always wanted to be a mystery shopper? I never applied for the job.

Pretty good money, too. Oh wait, the letter went on to say that my actual compensation would only be $300, not the entire $1930 that they'd entrusted to me. Still, $300 for a couple hours' work was not bad. I was instructed to deposit the check, then go purchase something at Wal-Mart for under $50, and then report on my interaction with the cashier.

The next part of the assignment required me to evaluate the Walmart2Walmart money transfer system by sending my new employer $1516 in two monetary transfers of $780 each. The person who wrote the instructions must not have been able to add, because $780 times two is $1560. And it sounded like there'd also be a $20 fee for making a transfer, but that would be covered by the $1930 check.

They emphasized that my task must be completed within three days of receiving the letter. (They especially want that money transfer made before their cashier's check bounces.)

I'm also supposed to send them a text or email to let them know I received the package, before I deposit the check. (That way, they'll have confirmation of live contacts for future phishing expeditions.)

My first thought—even though the letter warned me not to—was to contact Wal-Mart and make them aware of the scam. But then I just googled "Walmart Secret Shopper" and all kinds of fraud alerts appeared. Apparently, Wal-Mart does not even hire mystery shoppers, and they say so on their website. In case I'd missed all the red flags, some of the stories in the online reports sounded exactly like my scenario.

Guess I won't be taking this job after all…

Just curious, I went to the USPS website and checked the tracking number on the Priority Mail envelope. It was real; the response showed the date and time the package was delivered to my address. According to the label, the crooks had paid $9.90 postage to insure and send the bogus check via two-day service. I wonder if it was mailed by some poor soul who was duped by one of those phony "work-from-home" scams…

I dropped by my local police station with my paperwork. One of the detectives does periodic public service presentations to promote awareness about fraud. I figured he could use my letter and check as a visual aid.

"I hope you're not out any money," the receptionist said as she studied my letter. When I assured her I didn't fall for it, she added, "The chief gets these letters from time to time. Addressed to him here at the police station!"

Have you ever been the target or victim of a scam? I'd love to hear your comments.

Tuesday, July 10, 2018

Countdown to Financial Fitness: The Link Between Fitness and Frugality

Countdown to Financial Fitness: The Link Between Fitness and Frugality: Being healthy and physically fit is a blessing. Not everyone has the capability or stamina to walk significant distances. But, as we realiz...

The Link Between Fitness and Frugality

Being healthy and physically fit is a blessing. Not everyone has the capability or stamina to walk significant distances. But, as we realized on our recent vacation, taking the "shoe-leather express" whenever possible can save a lot of money.

We just returned from a 16-day cruise along the coast of Norway, stopping in many small to medium-sized towns with compact historical districts. The ship usually docked within a mile or two of the city center if not within easy walking distance of the major attractions. Yet in two of our ports, the ship's tour desk sold tickets for a shuttle service at $8.50 per person, each way. Tickets had to be purchased in advance from the cruise line; we were warned we couldn't decide on the spot to buy them from the bus driver once on shore. So, most passengers signed up to buy the transfers before we arrived.

After looking at maps and listening to talks from the destination port lecturer, my husband and I figured we could find better ways to spend $34. So, we walked into town. In both places, there were sidewalks and crosswalks to accommodate the locals and the more adventurous visitors traveling on foot. The areas we traversed seemed relatively interesting and perfectly safe, making the treks reasonably pleasant.

And what were most people who bought the transfers planning to do once they got off the bus in the main square? Walk around and explore the city. Some fellow passengers ended up not using their return tickets because when they'd finished sightseeing, they were closer to the ship than to the pick-up point for their bus.

In Longyearbyen, it was cold. But that's why we brought coats, hats, and gloves. In Norway, it also helps to have an umbrella handy, or at least a jacket with a hood.

It's a good idea to carry a bottle of water as well. And wear comfortable shoes.

Another instance where we saved money by using our feet was in Bergen, on the Floibanen Funicular. We were fortunate this time to enjoy a blue-sky day which made the view of the city, the harbor, and the surrounding mountains from the top of the hill spectacular. (On our first visit to Bergen, it was rainy and foggy, so we didn't even bother to go up.) A round-trip ride cost 95 NOK per adult (about $12) but we were able to buy a one-way ticket for 50 NOK, slightly more than half, and then walk down. A great way to savor the view on a beautiful day. People were walking up as well, but we're not that spartan.

Obviously, walking several miles round trip is not feasible for people with limited mobility or other medical issues. But for the able-bodied, it was a great way to work off some of the calories we'd consumed on board and help maintain the physical fitness with which we were blessed. Who needs to hit the treadmill at the gym after tramping around a foreign port for a few hours?

Do you enjoy walking when exploring a new destination? I'd love to hear your comments.

Thursday, June 14, 2018

Countdown to Financial Fitness: Should You Pay Off Your Mortgage?

Countdown to Financial Fitness: Should You Pay Off Your Mortgage?: Paying off my mortgage was one of the most freeing financial moves I ever made. But plenty of naysayers told me it was stupid. Should y...

Should You Pay Off Your Mortgage?

Paying off my mortgage was one of the most freeing financial moves I ever made. But plenty of naysayers told me it was stupid.

Should you pay off your mortgage? That depends.

Financial experts talk about "good debt" vs. "bad debt." Credit card bills, department store accounts, and car notes could be classified as "bad debt," i.e., financing a depreciating asset or continuing to pay for an experience or product that has already been consumed. "Good debt" normally produces a return on investment. For example, a mortgage on a home that not only provides you with a place to live but also is likely to appreciate in value. Some people consider a student loan "good debt" because you're financing an education that may enable you to land a higher-paying job.

By all means, don't pay off your "good debt" until you've paid off all your "bad debt."

Another reason to classify an obligation as "good debt" might be that the interest is tax deductible. Especially in the early years of a mortgage, homeowners can enjoy a healthy reduction in taxable income. Under the new tax law, with the standard deduction increasing so much that fewer taxpayers will benefit from itemizing, carrying a home mortgage might not be as attractive.

Mortgage interest rates tend to be lower than personal interest because the loan is secured by an asset. Credit card interest rates are high because there's very little the company can repossess if you default. (Another reason to get rid of that "bad debt" first.)

Interest rates have been low for many years, which reduces the incentive to pay off a home loan. Common advice is to buy as much house as you can afford, taking on the biggest mortgage you can qualify for. With borrowing so cheap, why not add a home equity loan to make all those needed improvements and further increase the value of your asset? Our federal government seems to subscribe to that philosophy, as the national debt continues to soar while the interest paid on Treasury bills is almost negligible.

If you have disposable income to put toward retiring your mortgage and you're otherwise debt-free, first look at other uses for that cash. For example, have you built an emergency fund with at least three to six months' living expenses? Are you contributing as much as you can to a retirement account? If not, fortify those areas first.

Assuming you have a healthy emergency fund and are already maxing out your retirement savings, should you then start paying off your mortgage? Or look for after-tax investments? That depends.

What is your tolerance for risk? What rate of return do you expect to get from your investment? When my husband and I paid off our mortgage, our interest rate was almost seven percent. We would have had to take a lot of risk to find an investment returning seven percent at that time. Paying off our own mortgage was a safe, guaranteed investment, and it took a huge chunk out of our monthly living expenses.

Lowering your monthly living expenses by getting rid of the mortgage payment might be especially important if you're planning to retire soon, or if you anticipate lower income in the near future. In our case, we both worked for the same company, which was teetering on the edge of bankruptcy, and we were concerned that one or both of us could lose our jobs.

If you have a very low interest rate on your home loan and your income status is secure, you might be able to find an investment that produces higher returns. But as mortgage interest rates climb, prepaying the loan might come back in vogue. In a future post, I'll discuss how to do it.

Have you ever considered paying off your mortgage? I'd love to hear your comments.


Thursday, May 31, 2018

Countdown to Financial Fitness: Making the Most of Leftovers

Countdown to Financial Fitness: Making the Most of Leftovers: On this blog, I've harped about the value of incorporating leftovers into future meals and saving money by avoiding food waste. But the...