If you’re in the market for a cash back credit card, the Upromise World MasterCard might be worth a look. It offers an easy $50 signup bonus (with first use) and up to 5% cash back on your purchases.

Granted, the top (5%) tier is only available when shopping through their online platform, but you can get 4% cash back at a wide variety of restaurants, 3% at Exxon and Mobil gas stations, 2% at movie theaters, and 1% on everything else.

This card, which has no annual fee, also offers 0% on both purchases and balance transfers for 12 months. That being said, there’s a 4% transfer fee, so it’s less attractive from some of the alternatives if you’re looking to transfer a balance.

Cash back can be deposited directly into your Upromise 529 plan or your Sallie Mae online savings account, or you can request a check for your rewards balance.

While I’m still partial to the Arrival World MasterCard, both for it’s juicy signup bonus and it’s 2% cash back rewards, this card could be a decent choice if you’re looking for a no-fee reward credit card. Click this link or the button below to apply

As I write this, I’m sitting in a hotel room and relaxing about a mile from the “main gate” at Walt Disney World in Orlando.

The kids got out of school yesterday and, once we got the car packed, we headed out of town for five days at the Happiest Place on Earth.

If you’ve ever driven to Disney World, then you’ve likely seen the billboards advertising “discount” Disney tickets. And if you’re anything like me, you assumed that these sorts of offers were a scam.

Well, I’m here to tell you that it is possible to get discount tickets to Disney World — though, in this case, we didn’t follow a billboard to the promised land.

Instead, we went online to a website called Undercover Tourist (no affiliation) and bought our tickets. As it turns out, these guys are authorized Disney resellers who (apparently) buy bulk tickets at a discount and resell them at a slight markup.

We didn’t actually discover them until the last minute, but they have a local pickup spot in Orlando so you can buy your tickets and pick ‘em up the next day. We did this just before we left, and I retrieved our tickets without a hitch.

Protip: If you’d like to save even more, the monthly newsletter from the Mousesavers website (again, no affiliation) contains an Undercover Tourist link for an additional discount.

All told, we saved ca. 11% on our ticket purchase. While this might not sound like a whole lot, we’re talking about buying five day “Park Hopper” tickets for six people. Thus, even a modest percent discount works out to a pretty nice chunk of change.

Bottom line: If you’re planning a trip to Orlando, I highly recommend looking around for discount Disney tickets. But if you do so, be sure to do your homework and only deal with official resellers. If you don’t, you might get scammed.

A reader recently wrote in to ask the following about Vanguard Admiral Share conversions:

“We’re getting close to being able to convert our Vanguard mutual funds to Admiral Shares. We’re pretty excited about this, but I’m also a little worried. Are there any tax consequences that I should be aware of? I’d hate to get a huge tax bill at the end of the year.”

That’s an excellent question. In fact, I wondered the same thing before we were eligible to convert to Admiral Shares a few years back.

Obviously, if you’re holding your funds in a retirement account, this is a complete non-issue. But what about taxable accounts? The good news is that conversions between share classes are completely tax-free.

And guess what? This tax-free treatment actually extends to conversions between Vanguard mutual funds and their equivalent ETFs.

Yes, they have a handful of bond index funds that don’t allow conversions to ETF shares, but the rest of their funds do. This assumes, of course, that there is an ETF equivalent — not all Vanguard funds have an ETF share class.

Just keep in mind that ETF conversions are a one-way street. You can convert from mutual fund to ETF shares but not vice versa.

This roundup is couple of days late because I’ve been absolutely swamped over the past week or so. This is partly due to work life, but mostly due home life. And while most of the busy-ness has been good, some has been very, very bad.

For starters, I was tied up with a work-related conference much of last week. We also had a major sports tournament in the area that kept us (and our kids) going from sunup to sundown (and beyond) on Saturday and again most of the day on Sunday. And our kids had their end-of-year music performances on Sunday.

That’s the good stuff. The bad? Well, there was a tragic death in our community that hit everyone pretty hard. People are moving on, but with extremely heavy hearts.

And now… Here are some articles that caught my eye this past week:

• Elimination of Payroll Tax Cut Reduced Consumer Spending – Yes, but it also reduced the degree to which we’re underfunding a major social program.
• High yield, high hopes? – Yield chasing can be a dangerous game.
• Portfolio Management vs. Financial Planning – What you get (and what you pay for) when you hire a financial planner vs. a portfolio manager.
• Pay a Fee for Better Value – When choosing between free and paid services, look closely at what you get. Sometimes free isn’t worth it.
• Affordable Care Act Summary – Nice summary of the highlights for the self-employed, the unemployed, and early retirees. Worth a read.

Finally, I had articles appear in the Festival of Frugality, the Finance Carnival for Young Adults, and the Carnival of Passive Investing. That’s all for now…

I hope you’re having a great week!

Last week’s posts about coins (both silver and copper) were inspired by me sitting down with our boys to pay their monthly allowance.

With that as a backdrop, I thought it would be worth spending a bit of time talking about the ins and out of our allowance system.

For starters, I’ll say that we don’t tie our kids allowance to any sort of chores. Some may view this as a minor (or even artificial) distinction, but we expect them to help around the house because they’re part of our family, not because we’re paying them.

So… The sole purpose of the allowance is to help our kids learn to manage money. Instead of buying stuff for our kids when they asks for it, we pay them an allowance and then expect them to cover their own discretionary spending.

If they want a new book, toy, video game, or whatever, they’re responsible for buying it. This has worked quite well over the years, as our kids have learned how to save for large purchases, how to work together to make even larger purchases, etc. They’ve also faced the consequences of impulse spending.

To provide some structure, we expect them to stash 30% in a savings account (we consider this to be their long-term savings) and to donate 10% to a charity of their choice. The remaining 60% is theirs to do with as they please.

We also provide them with an opportunity to put extra money (from spending) in the bank — with a match from us if they choose to do so. I call this the 401(kid) plan, and I have to say that it’s been an interesting experiment. One of our kids consistently takes advantage but the others? Not so much.

Ultimately, their long-term savings will provide a foundation for their education in investing, though we’re not going to push this until they show us that they’re ready. Our oldest is close, though he’s still not over the hump.

As for amounts, we pay $3/month per year of age. At the high end, our 15 year old is gets $45/month with the freedom to spend $27/month. At the low end, our 8 year old gets $24/month with the freedom to spend a bit over $14/month.

I’ve talked in the past about several ways of effectively outsourcing the management of your investment portfolio.

Possibilities range from using an all-in-one mutual fund to engaging a service like Betterment to hiring a financial advisor.

That being said, you may be interested in maintaining a bit more control and/or avoiding the extra fees associated with an investing service or financial professional. In that case, where should you start?

The good news is that rolling your own portfolio doesn’t have to be complex. In fact, you can put together a completely serviceable portfolio by answering two relatively simple questions and buying three funds.

Stocks vs. bonds?

The first question that you’ll need to answer relates to your preferred stock/bond allocation. When considering this, you might be interested in reviewing the historical performance of various stock/bond allocations.

The upshot is that increasing your equity allocation increases your expected returns, though it also results in greater variability. In other words, your highs may be higher, but your lows will likely be lower.

Conversely, increasing your bond allocation (to a point) reduces risk, though that comes at a cost. I say “to a point” because, at the extreme, adding a small amount of stocks to an all-bond portfolio actually increases return while reducing risk.

Diversification ftw!

Domestic vs. international?

Once you’ve decided on an appropriate stock/bond allocation, you need to decide on your preferred mix of domestic vs. international equities. Why should you bother with international equities? For the diversification benefit.

If you look at historical data, you’ll find that the inclusion of international equities has the potential to increase returns while simultaneously reducing volatility. As with the addition of stocks to an all-bond portfolio, this is a classic win-win.

It’s also worth keeping in mind that the US stock market account for just about one-third of the world’s total market capitalization. That being said, you probably don’t want to go overboard with the international equities.

Most recommendations say that 20-40% of your equity allocation should be international stocks. As for us, we’re more or less splitting the different at two-thirds domestic, one-third international.

Assembling your portfolio

Once you’ve decided on your preferred stock/bond allocation as well as your split between domestic and international equities, it’s time to assemble your portfolio. Here’s a simple example…

Let’s say that you, like us, have settled on an overall 60/40 allocation. Let’s further assume that you’d like one-third of your equites to be international. In that case, a simple three fund portfolio would look something like this:

• 40% total stock market
• 20% total international stock market
• 40% total bond market

Pretty simple, right? This is a great starting point, and you can tweak it from there. For example, some might prefer a short-term Treasury fund instead of a total bond market fund. Other might want to subdivide the bonds to include TIPS, stretching the three fund concept to four funds.

In fact, we’ve done the latter, splitting the bond allocation into two-thirds total bond market and one-third TIPS. Please see “Inside Our Investment Portfolio” if you’d like further details.

Note that you can get very close to the allocation listed above with something like the Vanguard LifeStrategy Moderate Growth Fund (VSMGX). That is, however, a static portfolio, so you’re locked into a single allocation over time. Moreover, you’ll also lose the ability to choose the location of your different asset types.

Speaking of which…

Determining asset location

Once you’ve determined your overall allocation, you might want to give some thought to tax efficiency when it comes to deciding where to put the various funds. If your portfolio exceeds your tax-advantaged space, conventional wisdom says…

1. Your bonds should go in a tax-advantaged account,
2. Your international equities should go in a taxable account, and
3. You should fill in around these with domestic stocks.

This is, for the most part, how we handle things — though I should note that our portfolio is large enough that we can’t fit our bond positions into our tax-advantaged accounts. Because of this, we’re holding some tax-exempt (municipal) bonds on the taxable side and all of our equities are likewise being held in taxable accounts.

Specific fund choices

To give you a head start on fund selection, here are the ticker symbols for appropriate index funds from several major fund families. I’ve listed these in the following order: domestic equities, international equities, bonds.

• Vanguard: VTSMX, VGTSX, VBMFX
• Fidelity: FSTMX, FSGDX, FBIDX
• Schwab: SWTSX, SWISX, SWLBX
• TIAA-CREF: TINRX, TRIEX, TBILX

You can, of course, use ETFs — e.g., VTI, VXUS, and BND, or the equivalents from other fund families — in place of mutual funds if that’s what you’d prefer. And if you’re in the Thrift Savings Plan, you can assemble a portfolio similar to the above using the C fund, I fund, and F (or G) fund.

Last but not least, we’re using VIPSX for our TIPS allocation and VWITX for our tax-exempt bond holdings. Note that I’ve listed the regular (investor) ticker symbols for the Vanguard funds above, though we’re actually holding the less expensive Admiral shares wherever possible.

Maintaining your portfolio

Finally… Once you have everything dialed in, you’ll just need to check back periodically to make sure it doesn’t get too far out of whack. If/when things drift outside your comfort zone (or at specified intervals, whatever you prefer) you’ll need to rebalance your portfolio to bring things back into line.

Protip: You can reduce your need to rebalance by directing new money (and/or dividend reinvestments) into whichever asset class is low vs. the target.

Now… That wasn’t too hard. Was it?

Speaking of silver coins… The good folks at The Consumerist highlighted an interesting marketing scheme (or should I say scam?) that made it to the front page of Reddit during the middle of this past week.

It seems that an enterprising soul has decided to sell ice cream cones for a quarter. The twist? It has to be a 1964 or earlier quarter. In other words, a silver quarter. One with a melt value of more than four bucks.

Given how hard it is to find these sorts of coins in circulation, I doubt this deal is generating much business. But who know? Maybe some kid found his grandpa’s coin jar and is going to town on $0.25 ice cream cones.

And now… Here are some articles that caught my eye this past week:

• How to Be a 5:2 Investor – Investing lessons from a dieting fad.
• How to Prosper in an Economic Boom – Amass wealth during booms, take advantage of opportunities during busts. Sounds simple enough, right?
• Creative Destruction and the Economy – New companies are continually replacing old ones. But often times, they don’t employ as many people.
• The Political Risk of Delaying Social Security – Some reforms would make it better to claim your benefits sooner, others might make it better to wait.
• Home Ownership and Unemployment – Home ownership reduces labor mobility, increases commutes, and reduces land available for business development.
• Why Financial Advisors Favor Bond Funds Over CDs – Asset management fees are creating a possible conflict of interest.

Finally, I had articles appear in both the Festival of Frugality and the Carnival of Taxes. That’s it. I hope you’re having a great weekend!

As a quick followup to my earlier post on searching for silver coins, I wanted to briefly address the situation with pennies.

As you’re likely aware, pennies used to be primarily composed of copper, though nowadays they’re largely made of zinc.

With the high value of copper, recent years have seen an increasing number of people hoarding not just silver nickels, dimes, quarters, and half dollars, but also copper pennies.

So what should you be looking for? As it turns out, all pennies minted prior to 1982 were 95% copper and 5% zinc. This includes Indian head pennies (1864-1909), wheat pennies (1909-1958), and older Lincoln pennies (1959-1981).

Note: Pennies from 1943 were made of steel for much the same reason that the composition of “war nickels” was altered — to conserve metals with military value and more limited availability.

During 1982, when the Mint transitioned to producing pennies that are 97.5% zinc and 2.5% copper, the situation is less clear. Some pennies minted that year are the old, copper-rich composition. Others are the newer, primarily zinc composition.

Since they look pretty much the same, the surest way to distinguish between copper and zinc pennies from 1982 is based on weight, with copper-based pennies weighing 3.11 grams and zinc-based pennies weighing 2.5 grams.

Unfortunately, since both of these values round to 3 grams, you’ll need a scale that reports to the tenth of a gram to tell them apart. Many kitchen scales (ours included) don’t give that level of resolution, though some do.

Anyway, based on current (as of this writing) metal prices, the older, copper-based pennies have a melt value of around 2.2 cents. In contrast, the zinc-based pennies are worth less than half a cent.

As was the case with silver coins, I’m ignoring the numismatic value here. Of course, many older pennies will have a much higher value in the eyes of collectors.

For what it’s worth, I sifted through a few hundred pennies and found 45 copper pennies. So yes, they’re still out there in circulation, though you’ll need to collect (literally) tons of them to amass much value in terms of metal content.

It’s well recognized that your asset allocation should be largely determined by your willingness, ability, and need to take risks.

While your need and ability to take risks are primarily financial, your willingness to do so is largely psychological.

Though you may need to take some risks to meet your financial goals, and you may have the ability to do so (e.g., you’re young and have a secure, well paying job), these things have to be balanced against your risk tolerance. If not, you’re just asking for trouble.

Characterizing risk tolerance

A common approach to this problem is to work your way through a risk tolerance questionnaire that asks about your timeframe, your comfort level with investments whose values fluctuate over time, how you would react if the stock market suddenly lost X% in Y months (where X is large and Y is small), and so forth.

And at the end, you’re pigeon-holed into a certain risk tolerance category. Setting aside for the moment whether or not such surveys are effective or useful…

What determines risk tolerance?

Have you ever wondered what actually determines your risk tolerance? That is, why might two different people in very similar financial circumstances having very different attitudes toward risk? One may be perfectly willing to take on huge financial risks while the other is extremely risk averse.

The underlying causes are undoubtedly complex and there are like to be no easy answers. That being said, I recently ran across an interesting study that looked at the effects of social isolation on financial risk-taking.

The effects of social isolation

The research I’m talking about was based on a series of experiments as well a relatively large field survey. And the results suggested that social isolation tends to encourage riskier financial behavior.

In one case, for example, participants played an online ball-tossing game where their level of inclusion was manipulated. They were later asked to choose between a high risk/high reward and a low risk/low reward gambling opportunity.

Care to guess what happened? As it turns out, those who had been relatively more isolated in the game were more likely to choose the riskier alternative than those who had a more inclusive experience.

In a separate experiment, the study’s author sought to determine the direction of the effects. Were those who were isolated shifting toward riskier behaviors, or were those who were included shifting toward lower risk behaviors? Overall, they found that social rejection is the driving force behind their findings.

Why? In this case, they chalked it up to the “instrumentality of money.” That is, study participants seemed to view money as a means to obtain what they want in life and thus, when faced with rejection, they pursued riskier but more (potentially) rewarding financial endeavors.

Finally, they used survey data to investigate the extent to which their findings could be generalized beyond their experimental setting. Interestingly, they found that chronic feelings of social exclusion are strongly correlated with a tendency to engage in risky personal financial behaviors.

So there you have it… It appears that your social situation has the potential to have a major impact on your willingness to take financial risks. Investor, know thyself.

Source: Journal of Consumer Research

This morning, we awoke to water in the cabinet under our kitchen sink. Not a huge amount, but anything more than none is too much.

Normally, I deal with these sorts of things myself. But this time around, I didn’t.

For starters, I couldn’t figure out exactly what was wrong. More often than not, these sorts of things are a simple fix, maybe even just a loose connection. But this time around it seemed like it would be a bigger job.

On top of that, when you combine the way things are set up under our sink (extremely tight quarters and a rather small opening) with my frame — 6’5″ and broad shoulders — I have a hard time getting in there to work.

So… I decided to call a plumber.

But who to call? We’ve lived in our current community for a little over six years and, though we’ve had plumbing problems in the past, we haven’t really been happy with the company that we’ve used.

I started by checking with our neighbor. Unfortunately, he’s used the same plumber that we’ve used, and he’s also had similar experiences. Hmmm, what now?

Angie’s List to the rescue?

Curious as to what all the buzz was about, I decided to check out Angie’s List. In case you’re not familiar with it, Angie’s List is an online service that aggregates customer reviews of service companies. It’s a premium service, which means that you need to have a paid subscription to make use of it.

Note: I have no affiliation with Angie’s List. I just though some of you might be interested so I decided to write up my experiences.

They bill themselves as an unbiased source of reviews. Companies don’t pay to be listed and reviews come from verified subscribers. That being said, there’s nothing stopping companies from setting up shill accounts and chalking up the cost as a marketing expense…

It’s also worth noting that, while companies can’t buy their way in, they do have the option of paying for enhanced listings that, for example, include special discounts for Angie’s List customers. So you have to be careful about just picking the guys at the top of the (default) search list.

Think about it. They’re now (since 2011) a publicly traded company so it should came as no surprise that they’re trying to maximize profitability.

Anyway, what follows is a brief rundown of my experience…

How much does it cost?

For starters, how much does Angie’s List cost? The short answer is: it depends. Fees vary by location. I’m not 100% sure, but I think this is based in part on the size of their database for your area.

Note that, in some locations, membership is actually free. These are their “grassroots” chapters that are just starting out. Presumably, once they reach a critical mass of reviews, they will switch over to the paid model.

Assuming that you’re in a paid service area, you can choose from a number of membership terms when you sign up. You can opt for monthly, annual, two year, three year, or four year memberships. For us, the prices were as follows:

• Monthly: $3.25
• 1 year: $12.00
• 2 years: $21.50
• 3 years: $31.00
• 4 years: $38.00

There’s also a $5 “account activation fee” that is re-applied if you let a monthly subscription lapse for more than 30 days or an annual subscription for more than 6 months. This discourages people from just signing up for a month here or there (or at least increases profit when they do so).

For annual plans they have a “110% satisfaction guarantee,” though I’ve never used it so I can’t comment on how easy it is to get your money back. Oh, and once you’re a member, you can apparently subscribe to additional cities at a discounted rate.

Angie’s list promo codes galore

Whatever the pricing structure in your area, be sure to search for promo codes before signing up. When I did so, I found several, including two that offered 40% off any membership plan (including the activation fee).

On top of this, you can (as of this writing) get 20% off by paying with PayPal. And yes, the discounts are stackable. Given this, I decided to sign up for a 1 year plan. After factoring in the discounts, it cost $8.16.

The primary annoyance is that it’s set to auto-renew and I couldn’t figure out how to shut that “feature” off myself. According to their website:

“All memberships come with the convenience of automatic renewal, unless otherwise requested, and can be cancelled at any time.”

Further down the page, it says:

“If you prefer not to have your membership renewed automatically or you want to join for one month only, please contact us to request renewal reminders or cancel your subscription.” (with a link to their contact page)

If you contact them (I did so via online chat) they’ll shut off the automatic renewal and instead send you e-mail reminders 90, 60, and 30 days before expiration asking if you’d like to renew. If you don’t, your membership will simply expire.

Searching for reviews

When I first logged in, there was a pop-over message asking how I heard about them and asking for my phone number both are required. Not sure why they need your number, but it may be to help combat fraudulent reviews. Then again, you could probably just make one up and they’d never know the difference.

I complied with their requests and pressed on.

Once inside, I punched “plumbing” into the search box and clicked the search button. I was promptly greeted by another pop-over telling me that there are “3 highly rated plumbers offering deals for plumbing” in our area. This is an example of one of the paid enhancements that companies can request.

The good news is that you can dismiss this behavior so you don’t have to see these offers again in the future. The deals are still there, you just have to click to a different tab to see them.

The default sort order is to put companies offering discounts for Angie’s List subscribers (and presumably paying a premium) at the top. Further down the list, I’m not sure how they sort them but it doesn’t appear to be based on rankings, location, or alphabetical order. Perhaps they pay for positioning.

Whatever the default sorting options are, you can switch to sorting by recent grades (A-F; based on the past three years), the total number of recent reviews (high to low; also based on the past three years), their distance from your home, or alphabetically by company name. Thus, it’s pretty easy to sort through things.

The grading is done based on price, quality, responsiveness, punctuality, and professionalism. You can view these separately, though there is also an overall grade, which is what really counts.

Reviewers also have an opportunity to enter a number of other details regarding their experience — what the work entailed, when it was done, how much they paid, and also free-form comments.

Though I was primarily looking for a plumber, I ended up poking around a bit…

Our old lawn service was listed, along with a few mediocre reviews that were more or less in line with our experiences. But our new lawn service — highly recommended by a neighbor — wasn’t listed at all.

At the same time, both the company that we’ve occasionally use for pest control and our family doctor were listed. And both had positive reviews, which was once again in line with our real-world experience.

So it’s a somewhat hit and miss, at least around here. Lots of companies are included, but some aren’t. And even if they’re listed, there might not be a lot of reviews available. But, based on admittedly anecdotal evidence, the reviews that I saw did seem to be reasonably accurate.

As for the plumber, I wound up selecting someone that was relatively nearby and who had very high marks. Unfortunately, he was booked until sometime next week. He recommended someone else who likewise had a relatively large number of reviews and very high marks. But he was also booked for the next couple of days.

I continued down my list, calling another plumbing outfit that had somewhat fewer, but still very positive reviews. They said they could be out sometime today, but that he’d have to call me back. About 10 minutes later, the phone rang and I was told that they’d be at our house in 15 minutes.

They arrived as promised, fixed the problem, and charged a reasonable rate.

As an aside, I sure am glad I called a pro. We wound up needing a new faucet — we suspected this might be the case so my wife had already gone out to get one — and it was a nightmare getting the old one out. They worked on it for quite awhile and ended up having to saw part of it off under the counter.

Is Angie’s List worth it?

So that brings us back to the original question… Is Angie’s List worth the money? That depends on a number of factors.

For one thing, the cost. Memberships are pretty cheap around here, so we don’t have to use it a whole lot to get our money’s worth. That being said, the coverage of services in our area isn’t terribly complete.

Honestly, I think the people who would really benefit from a service like Angie’s List are those who have recently moved to a new area and don’t really know who else to turn to for advice or recommendations.

If, on the other hand, you have a reasonable social network in your area, you can probably do at least as well by asking around for recommendations.

For the price, I’m going to sit tight and keep the subscription for the year to see how useful it ends up being. But I’m not sure I’ll end up renewing.