However the 2022 was interesting.
In January 2022 I started feeling uneasy and I went into 90% cash in February.
Then I was watching the market going down.
Beginning February 2023 I started feeling uneasy again and went back into the market.
I don't know what the market will do from where we are now, but I don't have the uneasy feeling at this time. The time will show if I can trust my uneasy feelings.
The cash flow in 2022 was $71,000, mostly capital gains from positions sold in February.
Trying to escape socialism, I moved from Russia to the USA. I left Russia end of 90ties, many years ago.
From my times growing up there, I remember how people who worked hard were punished. How we were pushed equality and equity down the throat. How nobody was allowed to be different or how difficult it was to be successful in an honest way. I remember the constant censorship and widespread corruption. How we had to worship the government and the system and how those who didn't were punished.
I thought I escaped that.
In the last few years I started feeling that the socialism starts to catch up to me again.
This week I realized, that it is here for sure.
It is here in the US.
There was no revolution. It slowly and quietly crept in. And now it is here.
I knew the socialism is here, the day I heard in the news that the diligent savers who apply for mortgages, will be punished and their money will be given to the less responsible.
The news are: Mortgage borrowers with good credit will face higher costs, starting May 1, 2023.
Per new Loan-Level Price Adjustment (LLPA) Matrix, borrowers with high credit scores will face higher mortgage fees and those with lower credit scores will face lower fees.
I can understand how people, careful with money, trying to achieve high credit scores for years, feel kicked with a heavy boot in the gut. An additional effect: they don't just hate that boot, they now also start to look negatively at those who will benefit from that, even if those people have nothing to do with initiating this new rule. That is how the population morale goes down.
The fee increase is significant.
Someone with a $400,000 loan will pay $40 more per month/$480 more a year and $14,400 more over the time of the mortgage.
But if your loan is $600,000 that will be higher. $60/$720/$21,600.
And if it is $1,000,000 - then you will be robbed of $100/$1200/$36,000.
In addition to that there is another "kick":
The fees will be even higher if you have 15-20% down payment.
And this is still not all.
In August 2023 there will be an additional "boot kick" coming.
Those with favorable debt to income ratio will get additional penalty for their responsible behavior.
After hearing it, immediately I had some thoughts that I need to research how to destroy my credit score in the most effective way but without personal financial damage. But wait...
At this time, it is still not worth it to ruin your credit score for the mortgage application, because luckily, the responsible borrowers, overall, will still pay less. But the difference between lower and higher scores in their fee calculation schedule will be much smaller. So, I am not destroying my credit score yet.
This is so sad. The socialism is here and I can feel it's breath of death.
More things will be coming. Insidiously more and more stupid decisions will be made. Like the new suggestion from the California.
Three California utility companies (Southern California Edison, Pacific Gas & Electric, and San Diego Gas & Electric) submitted a joint proposal with the new rate structure.
The households will pay on a scale based on their household income.
Households with annual income $28,000-$69,000 would pay $20 a month in Edison territory, $34 a month in SDG&E territory and $30 a month in PG&E territory.
Households with annual income $69,000-$180,000 would pay $51 a month in Edison territory, $73 a month in SDG&E territory and also $73 a month in PG&E territory.
Households with annual income above $180,000 would pay $85 a month in Edison territory, $128 a month in SDG&E territory and $92 a month in PG&E territory.
I don't know about you but if having a low flat rate for something, makes me to think less about how much I would use. Like lights and air conditioning in hotels. That is human nature and most people would stop caring how much they use. Those who will pay less, will not care and those who will pay more may be resentful and use more too. What do you think?
So the usage will go up across the board and they will have to increase rates.
I will watch what will happen to them and will put them on my Do not trade list, tickers EIX (Southern California Edison is part of Edison International), PCG and SRE (San Diego Gas & Electric is parts of Sempra).
First, is it good to have any card at all, either debit or credit? The general rule is that only people who can handle cards with care and discipline, will use them to their advantage.
Therefore, all advantages for both card types apply to more disciplined individuals, who don't usually suffer fits of impulse buys, who do care about paying bills on time and who don't forget or leave their cards around unattended.
Advantages of credit cards (only if monthly balance payed in full every time)
1. Using credit card regularly builds your credit history
A long and good credit history will help you to qualify for car loans, mortgages or other forms of credit with better terms.
Low credit utilization ratio is a major factor in calculation of the credit score. Using $500 of a $3,000 limit will give you better result than using $500 on a card with $1,000 limit. If you card is in good standing you can call and ask to increase your limit. Many times the issuers send emails with offers of limits increase.
2. Fraud protection
If your credit card is lost or stolen, you are not liable for unauthorized use if you report it promptly to the credit card issuer.
3. Cash back or rewards
Many cards offer various percentages of cash back or rewards for use, depending on the program.
4. Purchase protection
Some cards reimburse you for purchases which were lost in mail or stolen within a certain period of time.
5. Extended warranty protection
Some cards offer extended warranty on various products, depending on the program.
Disadvantages of credit cards (for the less disciplined)
If you don't make your credit card payments on time:
1. You will be charged late fees
2. You will be charged high interest on outstanding debt
3. Your credit score will go down because of unpaid balances and of increasing debt-to-income ratio and bad credit utilization ratio
Credit card versus debit card
Ba aware that credit cads are not the same as debit cards.
Credit cards accumulate the transactions for a month, at the end of which the statement is generated. Setting up an automating payment is a good option to make sure the bill is payed on time.
Debit cards are connected directly to your checking account and the money is taken out within moments of the transaction. When the money is gone from the account it is very difficult to get it back.
Only some debit cards have limited fraud protection and it is not as good as with the credit cards.
Lately many issuers offer a lock/unlock feature using their phone app. It is safer to keep the debit card locked and only unlock it temporarily if you need to pull cash from the ATM.
My daughter will be a teenager soon and I received an email from Fidelity with an offer to open a youth account for her.
Sure, it is good to learn financial basics starting earlier than later. Especially the traps and pitfalls like banking scams should be learned first. It reminds me of my first trip to Germany when my German was almost non-existent. Before my trip I bought a book of "German Swear Words and Bad Language" and learned that first. I thought as long as I don't hear anything of that bad language spoken to me, I will be fine, even if I don't understand much.
This post is specifically about the recent most common banking scams. Reading this post will be my girl's first "homework" related to her new bank account.
1. Phishing
Scammers send convincing-looking emails, text or phone calls that appear to be from a bank or financial institution, asking the recipient to click on a link or provide personal information, such as account numbers, passwords, or Social Security numbers.
Never click on links or open attachments from unknown senders, and be vary of urgent or threatening messages. Always check the sender's email address or phone number. Don't trust the phone number, they can be faked. Best is to get the original customer care phone number for the secure legitimate bank web site and call them directly to check if there is any issue. Don't use links of phone numbers ion the suspicious email or text. In case of a phone call, hang up and call the official number.
2. Account Take Over
Scammers gain access to a victim's bank account by stealing login credentials or using malware to obtain access. They make unauthorized transactions or changes the account information.
To prevent account take over, use strong, unique passwords and enable multi-factor authentication if possible. Regularly monitor the accounts and immediately report suspicious activity.
3. Card Skimming
Skimmers are small devises illegally installed on ATMs or point-of-sale terminals (like gas station or self-check-out station at a store). They very small and not very noticeable. During use they steal credit or debit card information.
To avoid skimming, be cautious of ATMs that look suspicious or have loose parts. Always cover the keypad when entering the PIN. Check bank balances regularly.
4. Fake Checks
Scammers will send fake checks, asking to deposit the check. They may say that the amount on the check was too large, by mistake, and they "may get in trouble with their boss" and ask you to wire part of the money back to them. The wired money is transferred fast out of the account and a few days later the fraudulent check bounces.
Scammers may also claim that you've overpaid, won a price or they "hire" you as a mystery shopper.
In most cases you are liable for the money received from a fake check. If you spend it before the check clears the bank will get it back from you. Your account can be flagged for suspicious activity and even frozen.
To avoid, make sure the check is from a legitimate source. No one will send you a check just like that, with no reason. If you have the suspicions, let the bank know and wait for 30 days to have the check cleared definitely.
5. Charity Scams
Scammers will contact you and ask for donations to a charity that doesn't exist. They may also ask you to provide your personal information, such as your bank account number or credit card number, so they can make a donation on your behalf.
Don't donate to charities that you're not familiar with. Instead, go directly to the charity's website if you want to make a donation.
6. Imposter Scams
Scammers will call you and pretend to be from your bank, the IRS, or another government agency. They'll ask you for personal information, such as your Social Security number or bank account number, to "verify" your identity.
Don't give out any personal information to someone who calls you unexpectedly. Instead, hang up and call the company or agency directly to verify the call.
7. Lottery and Sweepstakes Scams
Scammers will contact you and tell you that you've won a lottery or sweepstakes. They'll ask you to pay a fee to claim your prize, but the fee is just a way for the scammer to get your money.
Don't pay any fees to claim a prize that you've won. Instead, contact the lottery or sweepstakes company directly to verify that you've won.
About a week before Christmas I was in a very Christmassy mood.
I was watching some videos on YouTube and an add appeared. It showed beautiful furry winter gloves with cute foxes. The exact gloves are in the image above.
I wanted to buy them immediately and thought, YouTube probably checks companies who advertise on their site. I was so wrong!
I ordered the gloves and received an email from the merchant giving me a tracking number. After 3 weeks I got the update that the item was delivered.
Only the item was never delivered.
On the same day I received a small package with a very, very cheap costume jewelry ring in size 10.
My daughter was very disappointed. She asked me, how I, usually so careful, fell for a scam?
After getting over the rotten feeling of being scammed, I did some research. The website existed, but if you wet to "Contact us", there was no phone number and no email address.
They gave a physical address somewhere in Netherlands and when I plugged the address into the google maps, it couldn't be found.
Then I googled the store name and "scam" and the store was mentioned on a website www.scamwatcher.com, with a few people describing the same problem.
The signs were there, I just never checked them. Trusting Youtube.
What to do?
The return was out of question.
I called the credit card company, explained the situation and they emailed me a link to file a claim for order which was not received.
I also asked the credit card support person, if I now need to replace my credit card, since the scammers got my card number. I was told, most likely no. There was no fraudulent activity since the order was placed and I just should monitor.
On the online form, I described what happen in the appropriate field.
My explanation was very short, because the field was small. The form said that I will be contacted if they need more supporting information.
A week later the charges were refunded without any additional questions.
For the next time I am in Christmassy mood and want to shop spontaneously, my plan is following:
1. Don't just trust advertisers on YouTube.
2. Pay with Paypal, the process of refunding and reporting scam is easier and the scammers will not get your credit card number.
3. If the merchant appears suspicious, google if anyone had bad experience with them.
If something still went wrong:
Call the credit card company and explain. They will ask you if you tried to solve the issue with the merchant.
In my case I was not able to contact the merchant. That counted as a try.
Usually, if the merchant is legit, they will try to solve the problem if you mention that you will use charge back. They don't like chargeback, because of the penalties. The penalties for the merchant range from $15 to $50 per transaction and can even reach $100 if the merchant is considered to be high risk.
The charge back is used can be used for:
- an unauthorized transaction
- if you were charged twice
- being charged after cancelling a recurrent service
- you were charged incorrect amount
- you never received the item
- the item you received was significantly different from described
Submit your dispute to the credit card company in writing. Lately it is easier with the online forms. The claim must be submitted within 60 days with most credit card companies.
If your claim is rejected you can
1. Appeal the decision. You have 10 days for that.
2. If your appeal gets denied, file a compliant with the CFPB (Consumer Financial Protection Bureau). The company will have 15 days to respond after the CFPB contacts them regarding your complaint.
3. Last resort is to get a lawyer. This might be worth only with large ticket items.
I got lazy in 2022... and didn't write any posts.
I may be more active this year, because,
I hear so many new things lately such as: inflation, probable mild recession, CBDC, 15-minute cities, climate lock downs, NFTs... I need to sort them all out for myself. That will results in some posts, since that is how I detangle the information for myself.
I also got a new hobby: Taxidermy. A totally appropriate hobby for a pathologist. I think. If I was a pediatrician or a psychologist, that might be a bit strange.
Here is my beautiful exemplar:
If anyone wants to buy it, let me know.
Why mouse?
A mouse is small and easy to handle. I had a chance to work on a deer hide and it was too large and too heavy for me to handle. Also during shampooing the fresh deer fur, some bug, probably a flea, jumped onto my arm from the fur. That made me to stop thinking about deer as future specimens, and squirrels too, because they all live in the wild and definitely have flea. I watch the squirrels outside, scratching all the time. I don't want to bring any flea inside the house.
So, I decided to stay with very clean mice, which I get frozen at the pet store from the snake food freezer.
We have a piece of land about 1 hour away. It is purely recreational. It is mostly up the hill and 95% of it is wooded. There is a little, falling apart, shed built by the pervious owner. The access road is not in good condition and it it rains, you better don't go there, you might get seriously stuck in the mud. Basically 10 acres of woods with a small spot for an occasional picnic.
Last Friday I received a letter from the county, saying that the property value will increase form $53,000 to 93,000.
Which means, that the yearly property taxes will double.
Considering usability of the land, I felt is not appropriate at all.
My first thought was to put that land up for sale. But it is not an easy piece to sell. In may hang out there on the realtor.com for months. And during that I will have to pay the double taxes.
The updated property value will be visible to buyers and if I adjust the sale price higher, it will never sell. if I keep it low, the byers may think that something is seriously wrong with the land. What to do?
The county letter gave a phone number to call with questions but gave only one week time for the calls.
On Monday I started my research. My plan was to call them surprised about the tax increase, and staying friendly, ask why did it happen, explain that the value actually only went down and ask to adjust the value back to $53,000. If That wouldn't work, I already composed an appeal letter to mail to them. Writing the letter helped me to organize the arguments for my phone call.
I called and asked friendly to connect me to someone who can help me with the issue of the property value increase which I thought could not double in a mysterious way.
The woman on the phone said that she can talk to me. She explained that they have to adjust the property values to the current market prices and that was the reason for the increase.
I replied that the property is very difficult to access, especially on the rainy days there is basically no way in or out. That the shed is falling apart and we don't even enter it. That a house opposing the entrance road is a hoarder house with a lot of junk outside. And that there is no way it would be a desirable place for someone to build a house.
I had to give her the parcel number, she looked it up, and said that with all those details she will be able to depreciate the property to $56,000.
I thanked her and was happy that it was sorted out on the phone and I didn't need to mail my appeal letter.
Below is a summary of my research of what is needed for the preparation of the appeal.
If you believe that your property taxes were increased unfairly, you have the right to appeal the assessment. Here are the steps you can take to appeal the tax increase:
Understand the process: Before you begin, it is essential to understand the process of appealing property taxes in your area. You can start by contacting your local tax assessor's office or visiting their website to learn more about the appeals process.
Gather information: Gather all the information you can about your property and the tax increase, including your most recent property tax bill, property records, and any documentation that shows the value of similar properties in your area.
Check for errors: Review your property tax bill and assessment to see if there are any errors. Errors in the assessment, such as incorrect measurements or a mistake in the property classification, could result in an incorrect tax bill.
File an appeal: If you decide to appeal, you will need to file a written appeal with your local tax assessor's office. Be sure to include all the information you have gathered and any supporting documentation.
Attend a hearing: Once your appeal is filed, you may be invited to attend a hearing where you can present your case to a board or panel of assessors. Be sure to bring all relevant documents and evidence to support your case.
Await a decision: After the hearing, the board will review the evidence and make a decision. If your appeal is successful, your property taxes will be adjusted accordingly. If your appeal is denied, you may have the option to appeal the decision further.
Remember that the appeals process can vary depending on where you live, so be sure to research the specific procedures in your area.
Appeal letter:
Dear [Tax Assessor's Office],
I am writing to appeal the recent increase in property taxes on my [insert property type here] located at [insert property address here]. I was surprised to receive the new tax bill as the property's value has not increased, and no improvements have been made to the property. In fact, the road access to my property has deteriorated, and there have been no changes compared to previous years.
Additionally, I want to bring to your attention that my property has no water, sewer or electricity connection, which significantly reduces the value of the property compared to other similar properties in the area.
I have reviewed the assessment of my property, and I believe there may have been an error in the valuation. I have gathered information about similar properties in the area that have been assessed at a lower value, and I believe that my property's assessment should be adjusted accordingly.
I respectfully request a review of my property's assessment and tax bill. Enclosed, please find copies of my property records and other relevant documents that support my appeal.
I would appreciate the opportunity to attend a hearing to present my case to a board or panel of assessors. Please inform me of the date and time of the hearing, and I will make arrangements to attend.
Thank you for your attention to this matter.
Sincerely,
[Your Name]
Relevant documents to submit:
When appealing a property tax increase, it's important to include as much relevant documentation as possible to support your case. Here are some documents you may want to consider including:
Including as much relevant documentation as possible can strengthen your case and increase the likelihood of a favorable outcome.
Attaching photos of problem areas to your appeal letter can be helpful in supporting your case. Photos can provide visual evidence of any issues or factors that may reduce the value of your property, such as poor road access, lack of water or sewer connection, or any other damage or issues that may affect the value of your property.
Including clear and detailed photos can help the assessors better understand the issues you are facing and provide them with more context when considering your appeal. Make sure to label each photo and provide a brief explanation of what it depicts.
If you have any questions or concerns about what to include in your appeal letter or what documentation to attach, you can contact the local tax assessor's office for guidance. They can provide you with more information on what types of documentation and evidence are most effective in supporting an appeal.
To obtain copies of property records for similar properties in your area, including their assessed values and taxes paid, you can contact your local county property appraiser or assessor's office. These offices maintain records of all properties in the county and can provide you with information on the assessed values and taxes paid for properties similar to yours.
You can also access this information online in some areas. Many counties have a website that allows you to search for property records, including assessments and taxes paid, by property address or owner name.
If you are having difficulty finding the information you need or have any questions, you can contact the property appraiser or assessor's office directly for assistance. They can provide guidance on how to access the information you need and help you with any questions or concerns you may have.
Contribution limits for 401k, 403b and most 457 plans are increased to $22,500.
For people over 50 - catch-up contributions are additional $7,500.
Traditional IRA and Roth IRA: $6,500.
For people over 50 - catch-up contributions are additional $1,000.
HSA: $3,850 for single and $7,750 for family.
For people over 55 - catch-up contributions are additional $1,000.
