Narrow Bridge Home

We have all heard of social media, social networking websites, and budgeting software website.  One company took those ideas and created an interesting mash-up called Blippy.

Blippy allows you to link up your credit card or online profiles at sites like iTunes, Amazon.com, or Netflix to create a purchase feed.  The feed shows the community or your friends what you have been spending your money on.

What I Like:

The site gives you community support and a little external pressure to follow your spending goals.  If you are trying to cut back, and tell your friends, they can catch you red handed buying DVDs or wasting money at the mall.

The feed function can be a useful supplement to using sites like Mint.com or Thrive.

What I Don’t Like:

If you like your privacy, this is not for you.  If you make a stop at Victoria’s Secret to buy a present for your wife/girlfriend, they might be able to see it ahead of time.

If it sounds like something you would like, visit Blippy to sign up for free.  You can sign up easily using Facebook Connect or the Twitter API in just a few clicks if you want to connect your accounts.

[Via Credit Karma Blog]

This year I had an unexpected and pleasant surprise at work.  I was awarded stock options for 700 shares pricing in March.  The options vest 33.3% per year over the next three years.

It is exciting to be awarded options.  This ties my compensation to the company’s performance over the next three years.  From the company perspective, it is better to have employee compensation tied to company performance, as employees may work harder to ensure the company is successful.

Here is how employee stock options work, using my situation as an example:

• First, I am notified that I will receive options.  I was given the number of shares and the pricing date for the options.
• On the pricing date in March, my options are given a fixed value per share.  This is tied to the market price on that date.  The price is called a strike price.
• Every year for the next three years, a portion of those options become vested, or available for use.
• If the market value of my company stock is higher than the strike price on any date past the vesting date, I have the option to buy shares of the company stock at the strike price.  If the price is higher than the strike price, I can sell immediately for the market price and keep the profit.  If it is below the strike price, the option is “out of the money” and I will not exercise the option.

As you can see, the mechanics of options depend on the market price compared to the strike price.  No one would ever exercise options “out of the money,” because they would have to pay for the stock at a price higher than the market price.

While employee options have similar mechanics to buying and selling options on the market, there are many differences.  Do not use this as a guide to buy and sell options.

I have been watching a few stocks lately that could be good investment opportunities.  Some people think buying a stock means you believe in what the company do.  Others follow the idea that “someone is going to make money, it might as well be me.”

The epitome of these stocks are represented by the Sin Fund, which invests exclusively in booze, gambling, tobacco, and weapons companies.

Would you buy a company that you don’t believe in?  Please give your thoughts in the comments.

Today is the first day of my new position.  I have been at my company for about two years, and in that time I was promoted from Financial Analyst to Senior Accountant.  I was an accountant from November through this past week.  Now, I am a Senior Treasury Analyst.

As you might have picked up through my writings, I am a finance guy, not an accountant.  I was excited to be promoted, but I have found that treasury is where I want to be for the long run.

I am on the 43rd floor of my building now, instead of the 6th.  I don’t have a view, but if I stand up and look over the wall the next guy has a great view!  This is one step closer to my corner office.

My new job is in the lease management and operations group at my company.  We buy lots of big and expensive stuff where I work, and my job is to ensure that the financing goes through and works properly.  I will be negotiating terms and rates with vendors and will spend time working with our procurement group to make the purchases.

I am pretty excited.  I can’t lie about that.  If anything big happens here, I will let you know.

I finished an amazing book last week that I want to share with you.  The book is called Syrup.  It is the first novel by Max Barry, one of my favorite authors.  He wrote the more recent (and also awesome books) Jennifer Government and Company.

Syrup is a hilarious story about the adventures of Scat, a recent college graduate with a marketing degree and hopes of coming up with a million dollar idea.  We learn early on that most people come up with about three million dollar ideas every year, the key is following through on the idea.

I don’t want to give anything away, but the book involves company politics, backstabbing, to the wire business decisions, promotions, firing, and a hilarious tone that Max Barry manages to bring to two novels that make fun of everything I do in the corporate world. The other is Company (linked above).

I read through this book in about two weeks, which is fast for me.  I couldn’t put it down and needed to know what was going to happen to Scat.  For a book about a twenty something marketing graduate, I was impressed with the way I was pulled into the story.

If you decide to give it a read, please consider buying it through the links on this page.  You pay the same price, but I get a little bonus too.

I found an interesting new website a few weeks back and have been impressed enough to pass it on to you.  The Residuals and Royalties blog keeps cranking out ideas on how to make money through unique opportunities.

The author, an LA based actor named Michael-John Wolfe, scours the web for ideas on turning income sources into long term income streams.

It is definitely worth a read.  I am an RSS subscriber so I don’t miss any new ideas.

I work in finance at a large company.  We get leases and loans for large purchases, just like a consumer.  When we sign a new lease or loan contract, they often have balloon payments, just like consumers.  Part of my job is to determine whether it is a better deal for the company to lease or buy new equipment, and balloon payments are always favorable compared to loans without balloons, and they almost always are to consumers to, despite everything bad you may have heard about them.

First, it is important that everyone knows what a balloon payment is and how balloons work.  A balloon payment is a deferred amount that is paid in lump at the end of a loan/lease.  For my company, those lumps can be as high as $3,000,000 or more depending on the size of the equipment.  For consumers, the balloon is usually in the thousands of dollars range.

Why Balloons Are Good:  The time value of money demonstrates that deferring payments is beneficial because you can earn interest on the money rather than give it to someone else to earn interest with.  If the loan interest rate is 4.95% and you can earn 5% or more in another investment, you are better off deferring the payment.  In the corporate world, if the interest rate is lower than the discount rate, or cost of capital, the loan with deferred payments is favorable.

Why Balloons Are Bad For Some People:  A 15% balloon on a $100,000 mortgage leads to a $15,000 payment at the end of the life of the loan.  If you are smart, you would stash away $42 per month in a high interest savings account (affiliate link) over 30 years to cover the balloon at the end.  Everyone is not that smart.

Some people spend that $42 every month and have no way to pay off the loan at the end.  This is poor planning, and is not the bank’s fault.  It is the fault of the person who signed papers for a loan they could not handle.

How To Make Balloons Work For You: If you can’t earn more in interest than your loan interest rate, it is in your best interest to pre-pay everything as fast as you can.  If you can do better elsewhere, such as the stock market or bond investments, it is best to delay payments as long as possible.  Just be sure to save every month so you can pay it at the end.

Ever had a baloon loan or know someone with a good story?  Please share in the comments.

I just got the last of my tax forms together for 2009, and I have filled out all of the paperwork for my accountant to begin doing my taxes. 

Last year, I did my taxes and had my accountant do them as well.  He made my refund larger by more than his fee.  He is also there for me if I am ever audited at no additional charge.

However, for many people, taxes are not very complex.  It might be just as easy and cheaper to do it yourself, either by hand or using a computer program or tax website.

So, which do you do?  Do you take your taxes to an accountant or take the do-it-yourself route?  Please tell us what you do and why in the comments.

Long before I had this blog, I had a car loan.  My old car, a hand-me-down 1990 Volvo Station-wagon with about 200,000 miles, decided to stop working while driving west on Belleview Avenue one summer morning.  Fixing it would have cost as much as the car was worth, so I decided to get a brand new one.

After all, I had a good job and was living at home with my parents.  It seemed like a good idea.  Now, two and a half years later, it still seems like it was a good idea.  I still love the car and I was able to pay off the loan two and a half years early.  That is half of the scheduled time for those of you who are math impaired.

Over the lift of the loan, I paid a total of $675.53 in interest to the credit union for my $10,995 loan.  That is not too bad.  I like to think of that $675 as my car rental fee for the roughly 30 months I have been using the car so far.  That is a savings of $573 from the total interest if I had only made minimum payments.

I took a screen shot to commemorate my last online payment.  Silly me, I didn’t check the “payoff amount” and was left with four cents that I could not pay online.  A quick phone call took care of that though.

I plan to keep this car for many, many years and I am glad I have it.

What am I going to do with all of the money I had been putting into the loan?  I am sticking to my own advice.  My debt snowball leads me to student loans from here.  I have just about $21,900 left there.  I am still in school, so most of the loans are not accruing interest for another 7 months.  I have paid about $20,000 into my student loans while I have been in school, so paying down the rest shouldn’t take more than another two or three years.

Do you have any good loan payoff stories?  Please share in the comments.

Hi everyone.  If the title didn’t give it away, today is my birthday.  This twenty something is half way to thirty something.  On February 4, 1985 at 9:02am central time, I was born.  On February 4, 2010, I am excited to take advantage of the last birthday that comes with something new.

My car insurance, as a 24 year old guy, was about $125 per month.  That is a lot of money.  Even with good grade discounts and a good driving record, it is expensive to drive if you are a guy between 16 and 24.  At twenty five, I am magically less likely to cause an accident.  That means cheaper car insurance.

I ran through a quote program online last week and found that most insurance companies will lower my rate by over 30%.  I will probably find something around $80 per month.  That is a $45 per month, or $540 per year, in savings.  That is a weekend vacation to the mountains in savings.

The only other perk of turning 25 is also car related.  I can now easily find a rental car anywhere in the United States without paying extra fees for my age.  Pretty sweet, huh?

What do I have to look forward to from here?  Wrinkles?  At least I know that many women think men look better with age.  I am going for the Anderson Cooper or George Clooney look.  Girls think they are attractive, right?

(P.S. I didn’t pick the Progressive girl from the ads for any particular reason.  I just like her commercials better than the Gecko from Geico.  I have a different insurance company.)