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This Will Make You Laugh (or Cry)

By JLP | December 28, 2013

My wife bought me some Martini glasses for Christmas. We aren’t usually Martini drinkers so I had to go buy some supplies. My wife wanted to try a Cosmopolitan, which calls for cranberry juice. On my way home from the liquor store, I stopped at H-E-B, a popular grocery chain here in Texas. I picked up a bottle of Ocean Spray Cranberry Juice and this is what I saw:

Ocean Spray

Any time you see the phrase “NEW LOOK,” beware. It usually means the size has changed. Sure enough. They reduced the size from 64oz. to 60oz. The price…was still the same.

I don’t know about you guys, but I HATE this kind of inflation. I would rather the company just raise their prices than to try to be sneaky about it.

Anyway, when I got home I did a quick search and found a customer complaint regarding the new bottle size on Ocean Spray’s facebook page. This was their response (keep in mind that this response was written by someone who works for Ocean Spray):

“Hi Ethan, We understand your frustration. We did reduce our 100% juice drink bottles from 64 to 60 ounces to accommodate the rising costs in the bottling materials and juice concentrate used in our 100% line. We chose not to pass these rising costs onto the consumer, and therefore chose the alternative of reducing the bottle size. We still have a variety of 64 oz. options and would be happy to discuss with you further at 800-662-3263.”

So a reduction in the container size&151;while the price remains the same&151;ISN’T passing the rising costs onto the consumer? Did I really just read that?

Wow.

I paid $2.97 for a 60oz. container (basically $.05 per ounce). Had I paid that same price per ounce for a 64oz. container, I would have paid $3.17. That’s the equivalent of a 6.7% price increase. IT IS A PRICE INCREASE.

I would rather companies just be honest with their customers rather than trying to treat us as if we are stupid.

Topics: Inflation | 5 Comments »

Venezuela Moves to Cap Prices. Dumb Move.

By JLP | November 12, 2013

This is just comical to me.

Venezuela Moves to Cap Prices, Profits

The cause for the inflation?

“The amount of bolívares in circulation rose 70% over the past year, a clear sign the government is printing ever larger amounts of money to stoke a slowing economy.”

So, the government floods the economy with new money, prices rise, and the government moves to cap prices. Pretty crazy, isn’t it?

Topics: Economics | 2 Comments »

Quote of the Day: Friends

By JLP | October 30, 2013

Today’s quote of the day comes to us from Robert Greene in his book, The 48 Laws of Power*:

Robert Greene

*Affiliate Link

Topics: Quote of the Day | No Comments »

Nationwide’s Not On Your Side…

By JLP | October 28, 2013

A friend of mine gave me her 401(k) information to look at. Her company changed 401(k) providers and went with Nationwide. I wasn’t fond of their previous 401(k) provider (I forget the name now), so I was happy to see a change.

I flipped through the information packet and landed on the page listing their options. I was pleased to see companies like DFA, Vanguard, American Century, etc. Expense ratios for the funds were fairly low too (the highest was 1.21% for a SmallCap value fund).

Then I turned the page…

IN ADDITION to the mutual fund expenses, Nationwide tacked on an additional annual management fee ranging from 1.02% to 1.27%.

So…the Vanguard Index 500 Signal Class, with a .05% management fee, now had a 1.32% annual fee! FOR AN INDEX FUND!!!!!

Now, I know why companies do this. Small companies are struggling. Health insurance premiums are going up. Gas is expensive. So, a broker or advisor comes along and offers a 401(k) plan that is really cheap to the business owner and the costs to the employees are either glossed over or buried in the information. Sadly, most employees don’t have a clue.

To give you an idea of the impact of a 1.27% additional fee, I ran some numbers. I assumed an employee socking away $10,000 per year in the S&P 500. Using monthly returns, I calculated that at the end of 10 years (2003 – 2012), the 1.27% annual fee would have lead to a loss of $8,800 to fees (you can see my numbers here). That’s a sizable chunk of change.

My advice would be to only invest enough to get any company match and then max out a Roth IRA (assuming you qualify) or a traditional non-deductible IRA. There is no sense in throwing away money due to useless fees.

Topics: 401(k), IRAs, Retirement Planning | 18 Comments »

As If We Don’t Pay Enough in Taxes Already…

By JLP | October 27, 2013

A Black Box in Your Car? Some See a Source of Tax Revenue

Charging drivers by the mile.

Anyone who lives outside of New York City or any other big metropolitan area, will not like this idea.

I loathe any idea that adds a new way to tax people. Why? Because the old taxes rarely get done away with. There is a gasoline tax already. There are also lots of toll roads that charge by distance driven. WE DON’T NEED ANOTHER WAY FOR GOVERNMENTS TO GET MORE TAXES.

The above article mentions that this is necessary because the roads are in need of repairs. Wasn’t TARP supposed to be for roads? We have zero accountability in how the government spends the money it receives.

Topics: Politics, Taxes | 4 Comments »

Take This Spelling Test…

By JLP | October 23, 2013

I found this link to this spelling quiz on facebook. I took the quiz last night and scored a whopping 78%.

The 25 Most Commonly Misspelled Words

Take it and if you aren’t too embarrassed, post your results in the comments.

NO CHEATING!!!!

Topics: Miscellaneous | 5 Comments »

WSJ Opinion: How Government is Making Solar Billionaires

By JLP | October 22, 2013

From today’s WSJ (How Government is Making Solar Billionaires):

Welcome to SolarCity, SCTY -0.59% the latest booming green company that has never recorded a profit. The startup’s stock price has soared by 600% since its IPO last December—it closed on Monday at $57 a share—and spiked after the company announced a couple of weeks ago that it expects business to grow by 70% to 90% next year. Yet the company, based in San Mateo, Calif., and specializing in deploying rooftop panels, ended the first six months this year $61 million in the red.

Ordinarily, that sort of number might disconcert investors. But SolarCity’s business model is powered by government subsidies, which also fueled the 500% stock run-up and turn to profit this year of the electric-car maker Tesla. Steering both companies is Elon Musk.

In addition to being the chairman of SolarCity and CEO of Tesla, Mr. Musk is the largest shareholder in both companies. The increase in their stock prices has raised his net worth by more than $5 billion over the past year.

Isn’t that lovely?

Yes, I am aware that the government also helps other industries. The point is the government really should get out of all business creation and promotion. The government should not be deciding who is or is not successful. If your idea cannot succeed in the market place on its own, then you need a different idea. Mr. Musk has the U.S. taxpayers to thank for his wealth.

Discuss among yourselves while I go paint the master bedroom…

PS – If you can’t read the link, email me (JLP – at – AllFinancialMatters.com) and I’ll get you a copy.

Topics: Economics, Politics | 9 Comments »

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