Maximizing Your Maternity and Paternity Leave Options
May 7th, 2012 | Posted by Global Investors
As new parents-to-be, we have been exploring our options for paid and unpaid family leave from work. This is not meant to be an exhaustive list, but I was pretty surprised by all the possible permutations that you could do. I would add that while knowing your legal rights is important, I also support the idea of working with your employer and co-workers to make the process easier on everyone.
Your Work Contract
Most employers offer their full-time salaried worker’s some length of paid maternity leave, and it’s usually spelled out clearly in the lawyer-ese language of your work agreement. A few employers even offer paid paternity leave. Making an appointment to discuss all your options with Human Resources can be time well spent. Keep in mind that you are subject to the laws of the state where you work, not where the company is based.
In addition, you may be eligible for a longer unpaid leave-of-absence. For example, a big company may allow you up to one full year of leave and your same job (or comparable) will still be yours when you come back.
Short-Term Disability Insurance
Depending on your insurance plan and local laws, being pregnant or taking time off to bond with a new child may be covered under short-term disability insurance. This means you may be eligible for an additional period after your paid maternity leave where you will get a disability benefit that is somewhere around 50% of your normal pay (subject to caps).
Family and Medical Leave Act (FMLA)
The FMLA entitles an eligible employee to take up to 12 workweeks of job-protected unpaid leave for the birth or placement of a child, to bond with a newborn or newly placed son or daughter, or to care for a son or daughter with a serious health condition. You may or may not be required to use up your paid vacation days first. To be eligible for FMLA benefits, an employee must:
Under some circumstances, employees may take FMLA leave intermittently – taking leave in separate blocks of time for a single qualifying reason – or on a reduced leave schedule – reducing the employee’s usual weekly or daily work schedule. If FMLA leave is for birth and care, or placement for adoption or foster care, intermittent leave is subject to the employer’s approval. To get that permission, you should approach your employer in a way that suggests that taking the leave in chunks would disrupt the office operations less than taking all 12-weeks at once. For example, you may propose a 4-day workweek over a period of several months to a year, as opposed to leaving entirely for three.
State-Specific Family Leave Laws
Each state can have their own separate family leave and/or disability laws that may grant you more time and/or pay. Running a Google search for “[Your State] Family Leave Act” or “[Your State] Family Leave Laws” should locate the appropriate information.
Let’s take the most populous state and the California Family Rights Act (CFRA). Under federal law, any leave taken for a pregnancy-related disability is part of your FMLA 12-week limit. However, in California, an eligible employee who is disabled on account of pregnancy, childbirth, or related medical conditions is entitled to take Pregnancy Disability Leave (PDL) for up to four months. In addition to that, an eligible employee could then take 12 weeks of family leave to care for and bond with a new child under FMLA/CFRA. That adds up to a total possible leave of 7 months.
Sources: U.S. Department of Labor, CA Dept. of General Services, CA Fair Employment and Housing Commission
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Ally Bank Teases Us With eCheck Deposit Via iPhone App
May 6th, 2012 | Posted by Global Investors
Ally Bank released their new mobile banking apps for Apple iOS and Android OS smartphones today, but the functionality is still rather basic. You can check your balances and transfer funds between your Ally accounts.
What caught my eye was under the “Coming Soon” section… the ability to finally deposit checks by taking a picture of them on your smartphone and zapping it into the cloud. You can currently already do remote check deposit via scanner, but I fail to see why the smartphone app is taking so long. Chase does it, Fidelity does it, even PayPal does it. Anyhow, I hope it comes soon to my “everyday” bank account (and part of my emergency fund), for now all I have is this teaser screenshot.
(p.s. Ally, there’s no need to spend research and development money on an ATM locator, because with the unlimited fee rebates, any ATM is my ATM! These days you’re never more than 100 ft away from an ATM anyway.)
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Ally Bank Teases Us With eCheck Deposit Via iPhone App from My Money Blog.
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Obihai + Google Voice = Free VoIP Phone Until End of 2012
May 5th, 2012 | Posted by Global InvestorsUpdate 5/2/12: Obihai is offering free refurbished units to members of the United States Armed Forces (Army, Navy, Marine Corps, Air Force & Coast Guard) that are stationed outside of the US, while supplies last. A nice gesture. More information here. Other than that, overall these boxes continue to have great reviews online.
Are you still looking for a home phone solution that’s cheaper than a landline? A new startup called Obihai has started making ATA VoIP boxes that are actually easy to set up. You buy their box, add in Google Voice (GV) service, plug in a normal landline phone, and it will use GV to make and receive phone calls. No computer required.
Now, Google Voice/Gmail has promised free long distance within the US and Canada for the rest of 2011 2012. Past that, it’s unknown so I wouldn’t want to commit too much money upfront, even though the box is compatible with other VoIP providers.
They also offer number porting from cell phones now for $20. If you have a landline phone number you wish to port over, you’ll have to port it over to a cell phone first, and then port it over to GV. (Don’t ask me why.)
Available at Amazon, the OBi100 model is currently $43.99 with free shipping, and all you need to get yourself set up. They also have a slightly more expensive OBi110 model that allows you to bridge a traditional POTS landline with your new VoIP gadgetry, which I figure most people won’t need if the point is to save money by ditching your landline in the first place.
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Obihai + Google Voice = Free VoIP Phone Until End of 2012 from My Money Blog.
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Best BPA-Free Food Storage Containers For Baby Food and More
May 4th, 2012 | Posted by Global Investors
If you’re like me, you have a cabinet in your kitchen stuffed with a scratched and stained mess of Gladware, Ziploc, or Tupperware food containers and an even larger stack of lids that never seem to fit. I even remember telling myself to stick with one brand and three sizes, but after years of dinner parties, brown-bag lunches, and outdoor potlucks, entropy has kicked my butt. Add in the baby on the way, and I wanted to reset and replace with BPA-free (linked to cancer and hormonal disorders) containers and perhaps buy additional ones for storing baby food.
The creators of America’s Test Kitchen ran another test (like with the knives) of the major brands of plastic food containers including Gladware, Ziploc, Rubbermaid, Sterilite, OXO, and more. All were BPA-free and they used the rectangular/square 8-cup sizes. They froze them, put stinky food in them, microwaved them with chili, washed them repeatedly, submerged them in water to test for leaks, and more. Being frugal doesn’t mean just buying the cheapest thing out there, it’s about finding the best value for the price.
The winner? For plastic food containers, the winner was Snapware MODS, which featured good performance across all categories. Most of the better performing ones use the kind of seal that Snapware uses with snap-down “wing” flaps and silicone gaskets. Curiously, the MODS style is rather hard to find now. I did find a set of 20 pieces of Snapware container that looks of slightly less-beefy quality for $15 shipped at Wal-mart.
For glass containers, the winner was Kinetic Go Green Glasslock, which is also sold under Glasslock by Snapware. Made of microwave-safe tempered glass, this type of container seems to be enjoying a comeback due to all the concerns about microwaving plastic. I have to say, it does sound like a great idea as long as you don’t drop things a lot. Freezer safe. Add in that airtight lid, and I’m sold.
The main drawback beside fragility is the additional cost. You can buy their 16-piece set for $70 at Amazon.com including free shipping, although I’d rather buy a six-piece set of a medium-size for about $30-$40. All seem to have overall good reviews, and I also noticed that people seem to really love these cute Wean Green Wean Cubes Baby Food Glass Containers, which are also made by Glasslock (Snapware). Hopefully these can last a long time. Besides, there’s always that baby registry…
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Best BPA-Free Food Storage Containers For Baby Food and More from My Money Blog.
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Sell in May and Go Away? How About Remember To Rebalance In May and November
May 3rd, 2012 | Posted by Global Investors“Sell in May and go away” is a rhyming market-timing slogan that may never… go away. Here’s a graphic that seems to support the idea that stocks have historically performed much worse between May and October than the rest of the year. Credit to Reuters/Scott Barber via Abnormal Returns. Data set is the MSCI World Index from 1971-2011.
Meanwhile, The Big Picture shares a bunch of graphs from TheChartStore that don’t make it look so clear-cut. Looking at this one, why shouldn’t just bail out every September? Data set is the S&P 500 from 1928-2011.
Larry Swedroe tests the theory out using 30-day Treasury bonds as the alternative investment in this CBS Moneywatch article:
He looked at returns through 2007 from six start dates since 1950. “Sell in May” beat “buy and hold” if you started investing in 1960, 1970 and 2000, but not if you started in 1950, 1980 or 1990. “It’s pure randomness,” Swedroe says. “How would you ever know when to start?”
Throw in the tax implications of all that buying and selling, and I agree. Do you really want to base your investing strategy on a data-mining result that has no logical explanation behind it? Sounds too much like driving a car using only your rearview mirror.
However, Tadas Viskanta of Abnormal Returns has what I think is a reasonable compromise – what if you just decided to rebalance your portfolio at the very end of April and the very end of October? You should rebalance your portfolio regularly anyway, so why not do it twice a year, six months apart. If your target asset allocation is 70% stocks/30% bonds and now you’re at 80/20 due to the recent run-up, why not go back to 70/30. If things end up at 60/40 in November, then again, go back to 70/30.
You could call it “Remember to Rebalance in May and November”. It even rhymes! If “sell in may” really works, you’ll get some benefit from this mean reversion wackiness. If it’s just noise, you portfolio shouldn’t theoretically be hurt any more than picking other months.
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Sell in May and Go Away? How About Remember To Rebalance In May and November from My Money Blog.
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Chase Exclusives: 10% Extra Cash Back on Chase Freedom, 1% Cash Back on Chase Mortgage Payments
May 2nd, 2012 | Posted by Global InvestorsChase Exclusives is a program that encourages you to open a Chase checking account whenever you have any other relationship with Chase. I closed my Chase (formerly WaMu) account a while back after they slowly started making it harder to keep as a secondary account, but some of these perks actually seem pretty good. I remember hearing something about them, but never actually took a good look at the details until now.
10% Extra Cash Back + 10 cents per purchase on Chase Freedom
The Chase Freedom Visa card is a popular cash back card that features 5% cash back on rotating categories and 1% back on everything else. This quarter you’ll get 5% back on all purchases at grocery stores (up to $75 cash back a quarter based on $1,500 in purchases). Check out my page on 5% cash back credit cards for more info.
However, if you have a Chase checking account, they will add an additional 10 points + 1 extra point for every $10 in purchases. Since 100 points is worth $1, that’s basically saying every purchase on the Chase Freedom earns 10 cents plus 1.10% cash back and every 5% category purchase earns 10 cents plus 5.1% cash back. For someone like me that puts everything on their credit card for easy expense tracking, that can add up especially with smaller purchases.
Currently, the Chase Freedom has a promotion offering $100 bonus cashback if you sign up and make just $500 in purchases in your first three months.
1% Mortgage Cash Back program
If you have both a Chase checking account and a Chase mortgage, you can earn 1% cash back on your mortgage payments (principal + interest). You have to have the checking account open before the mortgage closing, and enroll in automatic payments from said account within 60 days of closing. If you take the option of having your 1% cash back applied towards your loan principal, that works out to shortening a 30-year fixed mortgage by 9 months if you stick with it. (They really should make this an option on other mortgages, paying just 1% extra instead.)
I don’t know how good Chase mortgage rates are, but I’d probably get a quote now from Chase just to see if they are competitive. Overall though, it would probably be better to just get a better interest rate and pay extra towards your principal as if you had a higher mortgage (takes discipline).
$150 New account opening bonus
Thinking about opening a new account? You can also get a $150 bonus through this link if you open a Chase Total Checking account with $100 and set up direct deposit (new customers only). To avoid monthly service fees, you must do any one of the following each statement period:
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Chase Exclusives: 10% Extra Cash Back on Chase Freedom, 1% Cash Back on Chase Mortgage Payments from My Money Blog.
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Will Housing Prices Track Inflation Over The Long Run?
May 1st, 2012 | Posted by Global InvestorsThe Calculated Risk blog has shared an updated graph of inflation-adjusted housing prices through 2011, based on Prof. Shiller’s data.
Mr. McBride also digs a little deeper and argues that because Shiller changed up the data series he was using in 1987, the true slope of the line should be a little more slightly positive. Using the original data series would result in an overall slope of housing prices increase slightly faster than inflation (1.5% per year) vs. the Shiller line (0.5% per year). His conclusion:
In many areas – if the population is increasing – house prices increase slightly faster than inflation over time, so there is an upward slope for real prices.
This reminded me of this chart via Sober Look that compared the US age distribution in 2000 and 2010 (US Census). The Boomers are getting old, and there is a little gap before the Echo Boomers come in. How will this affect housing prices in the future?
To me, the main takeaway is still that housing prices over the long run don’t rise much faster than inflation. This is not unexpected, as the cost of housing is by definition a big component of inflation. Of course, housing also provides dividends in the form of rent. So if you actually owned a house instead of most people “owning” a house with a big fat mortgage, your overall return on investment would be much better. I can’t wait to really own my house so I can earn that imaginary (imputed) rent.
In reality, what many people seem to do nowadays is hold on and rent out their properties for less than their mortgage payment and hope for price appreciation. This might work I suppose, and one could argue from the graph that prices overall are now close to historical averages. There are now some places where you can buy a house that rents for more than the mortgage payment, but unfortunately not anywhere near me (unless we’re talking huge down payment). As for me, I suppose I’ll just stick with owning low-maintenance REITs and getting my “rental income” that way.
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Will Housing Prices Track Inflation Over The Long Run? from My Money Blog.
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Why Mutual Fund Fees Are Important But Often Ignored + More Vanguard Fee Savings
April 30th, 2012 | Posted by Global InvestorsI am often reminded when talking with friends and coworkers that most people don’t understand the important of low fees when it comes to investing. The Vanguard blog had a recent post exploring why a 1% expense ratio is much more significant than it appears. The problem is that expense ratios aren’t charged to you directly as a line item like an overdraft fee or a monthly bill – it is quietly taken away in tiny pieces from your returns which makes it easy to ignore.
For another, fees are expressed as a fraction of assets. A 1% equity management fee seems small and reasonable. “One percent” just sounds tiny – as in “there’s a 1% chance of rain tomorrow.” But suppose you reframe fees in other terms. Suppose you expect a stock fund to earn 8% over the long run. Assuming inflation of 3% and a tax rate of 25%, you’re in effect paying one out of every three dollars of future expected return in costs.* A fee of “one third of all of the money you make” sounds like a lot, especially when many money managers could do worse than the market averages.
Basically, if you are expecting to earn 3% a year above inflation after taxes, paying 1% to a manager is like paying 1/3rd of all your earnings. As you can see below, I could own the S&P 500 for as little as 0.05%. Things get even worse when looking at bond funds and their tiny yields.
Research has shown repeatedly that costs matter more than star ratings and past performance. The lower the expenses, the less headwind year in and year out.
With that knowledge, Vanguard has announced another round of fee cuts! Vanguard says the price drops are a result of them being client-owned and passing on any savings resulting from increased assets. Others speculate that it’s a reaction to competition from other low-cost ETF providers like Schwab. Either way, investors win. The drops are pretty small, but to me it’s like getting a little guaranteed boost in returns that will compound every year. A selected sample of funds with fee drops below:
| Funds In My Personal Portfolio | Old expense ratio | New expense ratio |
|---|---|---|
| Vanguard 500 Index Fund (Admiral/ETF Shares) | 0.06% | 0.05% |
| Vanguard Total Stock Market (Admiral/ETF) | 0.07% | 0.06% |
| Vanguard Small-Cap Value Index Fund (ETF) | 0.23% | 0.21% |
| Vanguard Small-Cap Value Index Fund (Investor) | 0.37% | 0.35% |
| Vanguard Total Bond Market Index Fund (Admiral/ETF) | 0.11% | 0.10% |
| Vanguard Inflation-Protected Securities Fund (Investor) | 0.22% | 0.20% |
Admiral shares are now open in most index funds with a $10,000 investment, and you can always start like I did with the Investor shares at $3,000 and convert to Admiral when the balances grows. ETF offer very low expense ratios, but you should also keep in mind the cost of trade commissions. Buying Vanguard ETFs and mutual funds directly with an account with Vanguard is free. TD Ameritrade also offers commission-free trades on a wide variety of Vanguard ETFs (along with other providers).
Over the last year or so, Vanguard has made several moves that lowered my portfolio costs. They added Admiral shares, removed purchase fees on their Emerging Markets fund, and dropped expense ratios again.
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Amazon Instant Video Free $3 Credit with Twitter Link
April 29th, 2012 | Posted by Global InvestorsAmazon is giving away a $3 credit towards Amazon Instant Video purchases if you connect your Amazon and Twitter accounts. Amazon will make you follow them @amazonvideo and tweet a message about the promo. It kind of worried me giving so much control over to Amazon, but you can always remove the link afterwards. Must tweet by May 1st, use credit by May 31st.
While you’re at it, follow @mymoneyblog as well. 
I do share links and smaller deals on Twitter that you won’t see on the blog.
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Amazon Instant Video Free $3 Credit with Twitter Link from My Money Blog.
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Link Digest: Mixing Work & Passion, Invest in Memories, Stable Value Fund Warning, and More
April 27th, 2012 | Posted by Global InvestorsHere are some more links worthy of sharing:
The Overjustification Effect
A smorgasbord of behavioral psychology that questions the idea that there is nothing better in the world than getting paid to do what you love. This is a very complicated topic but the article makes some good observations.
Memory as a Consumer Durable (Atlantic)
Another twist on the whole “buy experiences, not things” theory. What if you treated a memory as “consumer durable” good much like refrigerators, furniture, or a car? In similar ways, they provide constant satisfaction and/or pleasure, and they last a very long time. In that case, should we acquire them while we’re young so we can enjoy them the rest of our lives?
Stable value 2.0, fewer investor guarantees (Reuters)
If you own a stable value fund in your retirement plan, you should check to see if changes were made to any of its principal guarantees.
The 401(k): Americans ‘just not prepared’ to manage their own retirement funds (WaPo)
401k were designed to be a supplemental account to pensions, but now they are a replacement. If you know what you’re doing, it’s good, and it’s nice because you can take the money with you across jobs. But the total account balances are nowhere near what people need to retire as a whole. Maybe we need something else.
“If the 401(k) is supposed to be the primary retirement vehicle for the average American worker, then it needs to be consistent with the information and financial ability of the average American worker, who is just not prepared to manage funds like that over the course of a lifetime.”
GMO 2012 1st Quarter Letter
The most recent letter from Grantham talks some sense about why most managers can’t afford to have the proper long-term mentality for market-beating returns.
…ignoring the volatile up-and-down market moves and attempting to focus on the slower burning long-term reality is simply too dangerous in career terms. Missing a big move, however unjustified it may be by fundamentals, is to take a very high risk of being fired. Career risk and the resulting herding it creates are likely to always dominate investing.
CarrierCompare: The iPhone app your carrier doesn’t want you to see (CNN)
An iPhone app that takes data (signal strength, response time and speed) from users and analyzes it together to find which carriers have the best service and coverage for any given area.
Related posts:
Link Digest: Mixing Work & Passion, Invest in Memories, Stable Value Fund Warning, and More from My Money Blog.
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