Category Archives: Financial

2009 TDI Diesel Jetta


There has always been a lot of press over the Toyota Prius. It gets around 45 m.p.g., is a hybrid that runs on gasoline, and “looks” the part of the Green Movement Car: Like a suppository.

If you are in the market for a new car, let me point you toward the 2009 TDI Diesel Jetta. It whips all over the Prius. It looks like a real car, not one with those stupid half wheel covers over the rear wheels, it gets BETTER mileage, and diesel burns cleaner than gasoline. It is also much more affordable than the hybrids. Hybrids do well around town, but actually get worse mileage on the highway than most non-hybrid cars! Yes, diesel is more money per gallon, for now, but the price would have to be more than double the price of a gallon of gas before you would lose on the diesel deal.

TDI stands for Turbo-Direct Injection, and is the technology behind the powerful and efficient motoring under the hood. In todays economy of high oil prices and economic worries, don’t blame the oil companies! Read my blog entry here, for more on that. Instead, be smart, drive safe, and give the new TDI’s a chance, from VW.

Honestly, though, I don’t think people are very affected by the high gas prices, yet. Actions speak louder than words, and people are still passing me on the highway like I’m standing still. Until they all slow down, I don’t believe anyone really cares about the price of gas. Quit belly-aching about it. Quit calling for oil companies to give up all their profits (6.8% last quarter for Shell Oil. By the way, where should their profits be? 3%? 1%? Should they work for free? Who gets to decide the amount a company makes? If you answer anything other than: “The Market”, then I have some serious questions for you! If Ford made 6.8% profits, no one would care, but if Shell makes that, everyone is up in arms!)

Slow down and buy a TDI Jetta, and enjoy the savings!

To post comments and more, visit TobyLaura.com

The “high price” of Gas


It seems that all I hear today is complaining about the high price of gasoline in this country. Congress is demanding that oil executives lower the price of their product, people blame the sitting president for gas prices, and we act like we cannot afford gas at this price.

I know that in some industries, like my own, high oil is causing companies to go out of business. Truckers are especially hurting as well too. I think those industries have valid complaints. But for the average American, who happens to be the “average complainer,” please spare me your crying about high priced gas.

We drive around in our SUV’s, drinking our five dollar Starbucks or our three dollar Evian water (interestingly enough, Evian, spelled backwards, spells ‘Naive.’ Does that say something about someone who pays that kind of money for water?) We drive 80 miles per hour while talking on our $80 dollar-a-month-gee-whiz mobile phone, while shopping at Prada or Restoration Hardware, with our fancy hairdo and expensive makeup or tailored suite. We have cable, HD cable, highspeed internet, four cars (with two drivers!), huge homes, trendy this, instyle that, and bliss on tap. We in the U.S. want for nothing! Our poorest people are still the wealthiest 15% in the entire world. Go to GlobalRichList for more. Seriously, put in your salary and see where YOU rank — it takes 7 seconds.

And yet we complain about $3.50 a gallon . . .

I drive 60 mph everywhere I go, because I’m trying to save my hard earned cash. While on the interstate, I’m passed like I’m standing still! Americans can (and will) complain about anything, including high gas prices, but they don’t really mean it, at all. If they did, they’d change their driving habits. They’d buy less Starbucks and iPods. They’d put money in the bank and Roth IRA’s, where their money belongs. But we as a nation don’t. Sigh, oh well, but spare me the complaining!

I don’t mind people driving fast. I don’t mind people driving Hummers. I don’t mind people owning 8 cars and 10 iPhones. I really don’t. To do so is simply envious — and I like to think that I am above that. It only makes those who have less look terrible when they despise those who have more. Many people have lots and lots of money, and if they have 10 million in the bank, then go get five Hummers — I shouldn’t judge. Just don’t complain to me about high gas prices. I know several people who have so much money, gas could be 10 bucks a gallon and they wouldn’t care. But they also aren’t complaining like the rest of us.

Slow down, straighten out priorities on spending, watch every dollar, and don’t despise the wealthy simply because they are so. Our blood pressure will thank us for it!

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Some perspective:

In the 1973 oil crisis, the Arabs decided to hold out on production. Back then, a barrel of oil was about $1.50 a barrel. During the embargo, a barrel of oil shot up to over $11 dollars a barrel. Long lines at the pump preceded. In comparison, if that size of spike happened today, the price of a barrel of oil would be over $1,100 dollars for one barrel of oil! So, things aren’t as bad as they could be.

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From MJ Perry’s blog:

After crude oil costs, gasoline taxes are the second largest contributor to the price paid at the pump. Together Federal and State excise taxes on fuel account for an average cost of approximately 62 cents per gallon. That’s a combined tax of about 20% per gallon of gas.

The federal tax per gallon is 18.4 cents per gallon, see the history of federal gasoline taxes here, and the state tax per gallon varies by state, see the complete list of state gasoline taxes here.

Average profit per gallon of gas for oil companies: 10 cents according to the EIA.

Quote: The government collects far more in taxes on every gallon of gasoline than the oil companies collect in profits. If oil company profits are “obscene,” as some politicians claim, are the government’s taxes PG-13?

~Thomas Sowell

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And Finally, George Will sums it up best with his article here, on our historical price of gas. Hint: We are paying less for gas today than we were in 1981 . . .

To post comments and more, visit TobyLaura.com

Big Gold?


It’s economics 101 and the general public doesn’t seem to know it. The price of things like gold or oil is set by the market, not by businesses. So why is it that Congress pulls the Oil Company CEO’s in to testify and resolve to lower the price of gas? How about calling in Jewelers to lower the price of gold? Here is Rush Limbaugh’s excellent viewpoint on it:

Big Gold


From the EIB Network, Rush Limbaugh:

I listen to people trash Big Oil. The very guys that are putting gasoline in your car are being trashed, and you are being conditioned to hate their guts while the guys on the Senate committee wouldn’t know the first thing about putting gas in your car, have not done one thing to get gas in your car, and you think they are your savior. The price of oil is going way up.  You know what?  A lot of other things are going up.  How about the price of gold?  The price of gold’s gone through the roof.  I want to know what the hell’s going on with that.  Where is a congressional hearing to bring in Big Gold?  Have you looked at the price of jewelry?  You gonna go out there and get engaged, get married — I hope not, but if you are — are you going to go out there and buy diamonds?  Have you seen the price escalations?  The Senate should bring Big Jewelry in. Is $350 an ounce is about right? I just think they just ought to set the gold price at 350 bucks an ounce — instead of close to a thousand, and make this “fair.”  This kind of stuff is really frustrating to me.

No, I’m serious about this price of gold stuff.  You bring the Big Oil guys up. Those are the guys that put gasoline in your car.  If it weren’t for them, you wouldn’t have gasoline — and yet they’re the guys that get grilled.  Have you seen the price of gold?  Now, see, this is a good illustration.  I’m trying to make a point here, but I think that the point’s lost, because I’m not being sympathetic or empathetic: that would be a better word.  It would be so easy for me to sit here and say, “Oh, gosh the price of gas! Man, it’s so hard for all of us. I don’t know what we’re going to do.  I really, really know how tough it is for you.”  That wouldn’t change your situation any at all, but you’d think somebody cares.  This is what the liberals pull off.  The liberals make people think they care about their problems.  They think they have a kindred spirit working on solving the problem.

Of course they don’t.  Liberals don’t fix anything.  All they do is break things! All they do is ruin things.  They don’t fix diddly-squat.  But people think they do because they care, and if I were to sit here and go through this little bit, “Hey, why didn’t Congress bring in Big Gold?  Have you seen the price of gold lately?  Why didn’t Congress demand that Big Gold lower the gold price, why didn’t Congress bring in Big Jewelry?  Have you seen the price of diamonds lately? It’s skyrocketing; everything is! Pull out all the stops! Find out who’s responsible! See who’s cheating the little guy when it comes to gold and jewelry.  You know how much people have suffered who want to go out and get married or get engaged to have a decent anniversary present, maybe get that solid gold toilet they’ve always dreamed about?

“Now they can’t do it because of the price of gold and the price of jewelry.  And where are Pelosi and where’s Reid and where is Ed Markey, and where is Obama, telling me again that the price of gold will come down to make it profitable and yet affordable to me?”  Now, I could make that case. I don’t know how many people would get what I’m saying.  I mean, “you people,” don’t misunderstand. You would.  I’m talking about people outside this audience. You all have above average IQs, above average education. We’ve done all the surveys. We know who you are, and you know who you are.  When I say “you,” I’m talking about people that vote liberals, people that vote Democrats.  But, boy, I could say, “Well, I feel sorry for you. It’s just so bad out there. I wish something could be done,” and of course there’s nothing I can do or anybody else can do, but if you think that somebody cares, then I guess you’re less, what? Concerned, or at least more hopeful?  Yes! People are more hopeful that something might get fixed if somebody cares . . .

And why do so many think that a sympathetic Congress can actually mandate lower oil prices? Because of our Ignorance. Read about it in the next blog entry.

For more, visit TobyLaura.com!

How much are you saving?


Freedom is the end-goal of saving. The more you save, the freer you are. When you have no more debt, and a stockpile of savings and investments, you are free. Free from the bondage of banks, free from the crushing weight of creditors, free from the worries of paycheck to paycheck penny-pinching, and most importantly, free do things with your money you never would have thought possible.

With a healthy savings, you will insulate yourself, to a degree, from the disasters that life brings. Sleepless nights due to worrying if a broken leg or a loss of job will financially ruin you are a thing of the past with six months to a year of net income in your high-yield online savings account. If, after taxes, you make $3,000 dollars a month, a good goal is to have (6×3) $18,000 dollars in a savings account. If you are a rock star, have $36,000 dollars in your online savings account. Each person in America should have a free, easy to set up, high interest, online savings account, and click here to know why.

Here’s the rub. Here’s the problem. We Americans don’t care about saving! We don’t lay awake at night worrying what will happen if our next paycheck doesn’t come. We don’t care about having a safety net because we live in the present. Living in the present is certainly fun because with a paycheck and a credit card, every one of our toys we buy is free and carries no financial consequence. Don’t live in the present! Instead, remember the past and think of the future. Forget the present, it’s worthless, and means nothing without the context of the past and future. Past financial disasters can teach us lessons today. And like the cliche says: we will repeat those same mistakes, lest we listen to the advice given from days long ago. Furthermore, if we focus our eyes on the future, then our smart financial decisions in the present will make so much sense. The idea of saving will be so salient and the pain of putting money away will fall into place, if we have an eye on the future.

So why does this matter? According to a statistic stated by Dave Ramsey, the Japanese save the most of any culture in the world, at 18.1% of their income. By nature, the Asian culture saves; that is just who they are. By contrast, the culture that saves the least, is you guessed it, Americans. What is our savings rate? Negative 2%! We spend more than we earn by 2%! With that kind of savings plan, we are not free. We are enslaved. We are beholden to our creditors, our toys, our banks, and can do nothing with our money, but pay it back to those who own us. In 2007, Americans spent 8.5 trillion dollars. Great for the economy, right? Well, the scary thing is that 6.8 trillion of it was spent on credit! Will that credit be paid back? Not nearly all of it and as it isn’t paid back, our economy will slide further into recession as both lenders and borrowers fall into trouble. Let me ask you a question: Are you free or does someone or some creditor own you?

If someone owns you, do you want to turn that ship around? Do you want to be free? I can guarantee that becoming free will only happen with a lifestyle change that involves a new mindset. “Make every thought captive so that it conforms to” your financial goals. Remember the past and look to the future, everyday, at every purchase!

Laura and I are not on an ivory pedestal. Three different banks own us and we are not free. We want to be and I hope you want to be too. Because I fly for an airline, it is always assumed that I make oodles of money. The truth is that I made more at Burger King than I did my first year of flying. If I wanted money, I would have gone into another profession, as an: engineer, doctor, architect, physical therapist, dentist, or go into business for myself. I won’t see 100K a year for YEARS! I say this only because I don’t want people thinking that I’m some richie rich with all the answers and pointing the finger at all the indentured servants below me. The truth is that Laura and I are indentured like all the rest! We just want to make smart decisions and hope that everyone in the U.S. will too.

Start today by opening up an online savings account here or here. It will link to your checking account so that you can set it up to automatically withdraw some money from your checking account and place it into the high interest savings account. I don’t care if it’s $10 dollars a month, do it! At least with a high interest savings account, your money in savings will keep up with, or stay ahead of inflation. Otherwise, with inflation, you are actually losing money on anything kept in a checking account.

Another smart way to stay ahead of inflation, and actually make money is a wise investment in gold. Unlike a stock or mutual fund, gold is always worth something. With the dollar falling in value like a safe thrown from a fourth story window, the value of gold is rising. Why? Many reasons, for which most can be Googled. A few are: Foreign investors are pulling out of the dollar, the Federal Reserve continues to drop interest rates, the economy is slowing, and fear is in the market. When there is fear in the market, a safe place to run is gold, which is where many investors are turning: hence the spike in the value of gold and the further weakening of the dollar. You can buy some gold bars/coins and store them in a safe place in your house or add gold investments to your portfolio. You will be a rock star in my eyes for doing either or both. Start here for more on buying gold.

Start now! Here is another quick example from Dave Ramsey why it is smart to start now instead of waiting:

Two brothers, the same age, turn 18. Brother one starts to invests $2,000 a year, which is only $166 dollars a month, into an investment each year until he turns 26. For you math majors, that’s 8 years and $16,000 dollars. Brother two starts where his bother left off. He invests starting at age 27, puts $2,000 dollars a year into an investment, which again, is only $166 a month. The only difference is that he continues until he is sixty five years old! The first brother only put money in for 8 years, until he was 26. The second brother put money in for 38 years, from 27 until 65. This is the lesson for starting now and appreciating compound interest: Brother One, who only invested for a short time, but started earlier, at age 65, will be ahead of brother two, who invested for 38 years and a lot more money, by $750,000 dollars! This assumes a 10% return for both brothers but the point is the same: start now!

Do you really need that next purchase? Do you really need to go out to eat that much? Do you really want to keep a balance on your credit card? A day of reckoning is coming. Will you be ready? Pad the savings account, contribute to your company 401(k) plan, and max out a Roth IRA, for both you and your spouse (and if you can afford it, open a Roth for each of your kids — they’ll love you for it when they turn 59 and a half!).

When we are free from our financial troubles, we can be better stewards of our money. Ultimately, we learn that our money isn’t ours anyway, its God’s. He has blessed us with the finances we have and gives us all we own. When we gain freedom, we are free to then give our money to others. Starting with giving a tithe (a tenth) to God, we thank Him for his rich blessing on us. After that, we are free to do other generous things like help the poor, give great Christmas and birthday gifts to others, and do random acts of kindness. That is what true freedom is all about!

Where to go from here?

Click here to read some simple ways to get started saving and setting goals, according to Dave Ramsey.

Click here to read about some great ways to save money on everyday things in everyday ways. It is written by Ken Rockwell.

Open an online savings account yesterday.

Don’t be afraid of credit cards, just make sure you pay them off each month. I know that lots of advisors, like Ramsey, say to cut them up, but that only masks the problem of credit cards. We shouldn’t solve our credit problems by hiding from them, but learning how to live with them and using them to our advantage, with reward cards.

Be smart, don’t live in the present, remember the past and keep a watchful eye on the future!

For more, visit TobyLaura.com!

Vonage, the only way to go

Kiss your old phone line good-bye and say hello to Vonage. It is revolutionary, will change the way you think about phones (if you thought about them at all), and is a must have for anyone who uses more than just a mobile phone.

What is it and how does it work? Simply put, it’s an affordable and easy to install phone system that costs much less, offers more, and is much more flexible than any other type of phone, other than mobile phones. What it ISN”T is a gimmicky, hard to mess with, finicky phone system that is not worth the trouble.

Vonage uses the internet to send and receive phone calls instead of old time phones that use a land line. All you need is high-speed internet, either DSL or Cable, and you’ll be all set. Even if you don’t have high-speed, with the amount of money I saved by switching from AT&T; to Vonage, I was able to rationalize the price of high-speed! I was paying $10 dollars a month for dial-up internet, and $35 dollars a month for a basic phone line, with no long distance on it, no voicemail, and no extra features, except for call waiting and caller ID. That was $45 a month for horrible dial-up internet and terrible phone service. I switched to a highspeed cable modem for $35 dollars a month and Vonage, for $15 dollars month, for a total of $50 dollars a month. It was a five dollar increase in price per month, but an unspeakable improvement in internet capabilities and a vast improvement on phone service — for five bucks extra! So if you don’t have highspeed internet, Vonage may just put you over the edge in reasons to get it. If you already have highspeed, then (no offense) you should have switched to Vonage a long time ago! It will save you money each month, money you could put into a high yield savings account discussed here.

Traditional phone lines change your voice over to an electronic signal which is then sent over a copper wire, out of your house, to a phone company routing station, and then on to a satellite or some other transmission device, until it ends up at the house of the person you are calling. With Vonage, the principle is the same, and actually works in a nearly identical fashion as the cable companies offering “Digital phone service”, except Vonage only costs $15 bucks, instead of $40 bucks, like the cable companies charge. Vonage changes your voice into an electronic signal that is then sent over the internet, via a protocol called VOIP, or Voice Over Internet Protocol. Your voice, via “e-mail” ends up at a Vonage computer that sends it on to the person you called, via magic. With Vonage, you can call anyone in the world, anywhere in the world. It sounds crystal clear, costs pennies a call if the call isn’t free (more on that later), and you wouldn’t notice that the call wasn’t made with a traditional land line phone.

Vonage is not Skype. Skype is fun and free, but very gimmicky and not capable of acting like a regular home phone. When people hear the words, “Internet phone”, they probably think of poor quality, hard to use, and need a computer to make the call. Skype, and others like it, utilize a headset that plugs into a computer and then you talk “over the internet” while plugged into a laptop or desktop computer. Vonage is different in that it doesn’t need a computer at all. If I were to sneak into your house tonight and install Vonage, you wouldn’t even know that I had done it! It’s that good.

How to set it up. Okay, this is how it all works. The internet comes into your house via a coax cable. That cable goes to your cable modem. Then an ethernet cable comes out of the modem and plugs into your computer and you have the “internet” on your computer. Vonage is a simple router. You take that ethernet cable that goes from the modem to the computer and plug it into the Vonage router instead. The router is simply a device that splits up your internet signal into multiple signals so that more than one item can use the internet signal at once. In this case, the Vonage router takes the internet signal it needs, and passes it on to other devices, like your home computer, and laptop, etc. Setting up this part literally takes 15 seconds. There is a phone jack on the back of the Vonage router. There is a supplied phone cord that you then connect that jack and any phone jack on the wall in your house.

Now for the tricky part (it might take three minutes!): go outside and find your phone box. It is where the phone company phone line comes in from the telephone pole. There are two halves to this box, an upper and lower half. The lower half is yours and the upper half is the phone company’s (this could be reversed at your house). The upper half needs a special tool to open, because AT&T; owns this. Don’t worry about this, and don’t open it, it isn’t yours! The lower half is yours and opens with a simple phillips screwdriver. Open the box and you will see a phone cord plugged into a phone jack (just like you see in your house). Unplug this phone cord. Wrap the end with electrical tape or masking tape so that the phone repair man never comes out and plugs this back in. I wrote on my masking tape: “Do not use.” Now your house is separated from the outside world and all your phone jacks in the house are no longer connected to the phantom power that comes through the telephone wire from the pole. (Normally, your phones are powered by a small amount of power sent through the phone lines.) When you do this, all your jacks in the house are now powered by the Vonage router, so all the jacks in your house will work like normal, except you will be using Vonage. This is a great way to set things up because when I first heard about it, I thought that only phones connected via a wire to the router would work, but that isn’t true. It’s nice to have the phone up in the bedroom, alarm system in the basement, and kitchen and living room phones all work off the Vonage system.

Features. This is where Vonage really shines. Vonage gives you so many features, that if you ordered all of them from AT&T;, you’d be paying $100 dollars a month, not including the cost of calls! With Vonage, they are all included. I won’t list them all here, but for a full list, click here. Some of the features we enjoy are the standard call waiting, caller ID, call forwarding, voicemail accessible from anywhere, e-mail voice messaging (where you can receive voice mail in an e-mail sent to you and checked while on the go) blocking of unknown callers, and much more than I can’t think of right now. You get to keep your old number, just like when you switch mobile phone providers.

If the power goes out and you lose your internet connection, calls are automatically forwarded to another number. I use my mobile phone number. So, if on a stormy night, the wind knocks a tree into the power and phone line outside your friend’s house, he will be left unable to receive calls, but not you, with Vonage, because your mobile phone or alternate number will ring.

Vonage doesn’t care where you are, as long as it can get the internet. Think about what this means for you and your phone. Going on a business trip but don’t want everyone to know your mobile number? Just give out your home number and throw the Vonage router into your suitcase (it’s the size of a small Bible). When you get to your hotel with highspeed internet in it, plug your router into the ethernet cable, and plug the room phone into your router. Now, whether you traveled from Ohio to Michigan, or Ohio to Singapore, your phone will ring when someone calls your number! Take advantage of this on business trips, vacations, or by not subscribing to national calling plans on your mobile phone plan.

Add a second line, for other family members, a fax line, or whatever, for $10 dollars. Add an 800 number that only your kids know so that they can always call home, even from a pay phone or party. Add different rings for multiple lines. Use simulring, to ring two phones at once, like at home and an office. Use the flash drive phone when you are on the go: a flash drive plugs into a laptop, and whenever the laptop is connected to the internet, wirelessly or not, you can make calls by turning your computer into a phone, similar to Skype. Add a business package to your plan to run your business. My company, and many others, have switched over to this type of phone. Instead of having thousands of phone lines within the office complex, they have phones that only hook up to the internet. They use the internet to make their calls, both within the office and abroad. It saves thousands of dollars in telecommunication costs.

Pricing. This is very simple. There are two plans. $15 dollars a month and $25 dollars a month. The only difference is that the more affordable plan gives you 500 minutes a month whereas the pricier plan gives you unlimited calling. We are on the $15 plan because we use our home phone in conjunction with our mobile phones. If you are a talker, splurge for the pricier plan, but only after you’ve tried the 500 minute plan. You may surprise yourself at how much you actually talk on your home phone versus your mobile. Why pay for more until you know you need it?

The 500 minute plan gives you free calls to other Vonage customers, and free incoming calls — so we never even approach 500 minutes used per month.

International calls are so cheap, you’ll feel like you are cheating someone, somewhere. Calls within North America are always free. Most calls to Europe are free. Iraq is free. Honk Kong is 4¢ cents a minute. My mobile phone charged me $1.49 a minute while I was in Hong Kong! Laura called me several times while I was there for three days, and our total bill was not even $1.49, like one minute of my mobile calls would have been. These prices vary, so always check for the latest prices, but from what I’ve seen, it seems like they are adding more countries to the free list than anything else.

Too good to be true? Well, there were some initial concerns about 911 dialing. Because the system is internet based, it has no idea where it is on the planet. When 911 is dialed on an old land line, the phone company uses your physical address linked to your phone number to route the call to the closest 911 call center. Mobile phones work the same way by using the location of the tower the call bounced off. When you sign up for Vonage, you provide an address so that the same thing can occur. If you are in a different location than home, simply remember to tell the 911 operator that you are not in Hog Knuckle, Tennessee, but in Maui on vacation . . . Someone died because the 911 call wasn’t routed correctly. This was big news a few years ago and published in the Socialist Today (I mean USA Today). Buried in one of the last lines of the story (typical) the reporter mentions that the person failed to provide their home address when they signed up for the service. Vonage does not fix dumb, sorry.

Some home alarm companies do not like their systems tapped into a VOIP system like Vonage. They fear that if someone cuts the power to the house, the alarm monitoring center will not receive the call from the box in your basement. So a thief will take the risk of cutting your power lines with a big bolt cutter and risk electrocution, but not cut the phone line with a pair of scissors with zero risk of shock? Riiiiight. That’s what I stay awake at night for hours worrying about. Alarm companies want to sell you their “cell phone” technology caller that dials the call center via an internal mobile phone, thus unaffected by power and phone line outages. Only you can decide if the extra $20 dollars a month is necessary for this extra protection, but it shouldn’t affect your Vonage decision. All computers, alarm systems, and other devices that need the phone, like DirecTV, cannot tell the difference between the dial tone of a land line phone and a Vonage line. These electronics just want to make calls, like you, and look for a dial tone, which Vonage obviously provides.

So what? What’s next? Go to Vonage.com and sign up for one of the two plans. In a few days, you will receive a small box that holds the Vonage router, a few cables, and a pamphlet on how to hook it all up. I kid you not, ten minutes later, you’ll have it up and running and making calls for free! Pick up the phone and you’ll hear the standard dial tone sound. While you’re at it, give me a call and we’ll chat about all the features you are getting and all the money you are saving. Go ahead, call me!

I really feel like this is a great way to save you some money and improve your life. Otherwise, I wouldn’t share it with you. I believe in it so much that I hope that everyone who reads this either has it or signs up for it soon. Your first month is free, so if you hate it (how could you?) you can cancel it. If you sign up through me, I get a month free as well. However, to prove that I truly am interested in my reader’s well being, and not shameless plugs, I’m not going to post the link here for you to do it for me. Trust me, you will enjoy Vonage and it’s savings.

For more, visit TobyLaura.com!

I love free money, don’t you?


Laura and I just got $945 dollars, for FREE! It was just given to us. I did about ten minutes of work on the internet, and was paid over nine hundred dollars for doing so. It was so easy, it was child’s play. If I can do you it, anyone can. As a matter of fact, I would say that if you weren’t given free money like we were, you aren’t making your money work hard enough for you. How did we do it? How and why did some bank just hand over that kind of money to us? Well, if you’d like to be in our shoes, just read on to learn about online banking, high yield online savings accounts, and our credit card usage. Those three things paid us over $900 dollars in 2007 alone, and cost us nothing!

Online banking. First of all, if you want to make this work, you need to be a little internet savvy. A dial-up connection will do, but you need to at least be in a position to do some banking online. I know that some people are not in a mind set (yet) to be willing to do much of anything on the internet, let alone, banking on the internet. Most, if not all banks, trying to compete, now offer free, online banking, and online checking, and online bill payment methods, and so forth. These are great tools that ultimately save you money, time, energy, and help you stay organized and earn more money. For example, the amount of checks Laura and I write in one year is almost negligible, maybe three or four. Also, we never use cash, so the amount of actual “hard currency” we spend is very limited each year, as well. Almost everything we spend is electronic: credit or online debit/check writing. We use Huntington Bank to do our banking, and they provide a free bill payer, and electronic check writing, and online checking and access to our accounts. When we “write” a check to a charity, an individual, or business, we fill out an online form, and our “check” is sent, electronically, for free to whomever we choose. For example, we donate to Lightrider, and our bank sends them a check. We don’t pay for the check, the postage, we don’t have to drop it off in the post office box, and we certainly don’t have to write anything down in our statement, because it’s all taken care of on our online checking account for us to see. For free!

I hate late fees. They waste my hard earned money. I hate having to remember which bill is due when, and how much it should be. I don’t like having to juggle all that in my head. So, each bill we get, is automatically billed to either our credit card (to earn bonus points) or to our checking account. The online bill payment function works great because then, the bills for the gas, electricity, mortgage, credit card (yes, more on this later!), cable, Roth IRA, mobile phone, and more, get paid automatically for me. Out of sight, out of mind. Not that I don’t see them going out; I want to see them for any unusual billing, but I don’t have to remember to withdraw them, pay them, or worry about them. I just have to keep the paychecks coming in to cover them!

So, lesson one is to get organized with an online checking account. The more you are organized, the less money you will lose (waste) on late fees, missed payments, and losing track of your money. Start a free online checking account with any bank TODAY. Two bonuses to doing so are: 1) No more balancing a checkbook and 2) Linking to an online high yield savings account. Not balancing a checkbook is priceless. Even if you write checks from your checkbook instead of for free online, the checks (both paper and electronic) show up in your online daily balance, as withdrawals. The reason to balance a check book is to 1) know how much money you have: your balance, and 2) to keep track of checks written. Well, you can do both with an online checking account, without balancing at all! “How much do I have in my account?” “Can I cover this next purchase?” I don’t know, look up your online account and see your balance; it’s instantaneous and live. “What did I write this check for? I don’t remember.” Look up on your online account and see a picture of the actual check you wrote and you’ll see who you wrote it to. Magic! Online checking accounts also let you link to online high yield savings accounts. Online banking saves you money and keeps you organized, but online savings accounts are where the real money is.

Online savings accounts. The power of compound interest is a wonderful tool — just ask Warren Buffett. At one time, before he gave all his money to charity, he was the second richest man on earth, behind the Windows computer nerd. He drove a 20 year old beater car, because he couldn’t stand the thought of spending $45,000 dollars on a new car, when he could put that same $45,000 into an investment or savings account and make 10 times that, where a car only depreciates in value. He knows that toys are usually terrible investments: boats, new cars, clothes, and, well, you get the idea.

The best way to have your money safely work for you is high interest paid to you on your money. Yes, banks have done this for years, but they pay such a paltry amount, it hasn’t been worthwhile. I always want my cake and be able to eat it too. I want to have the best of both worlds. I want to have the convenience of online banking and all its goodies, but I also want to make a lot of money on the cash I have in my bank. Right now, the only way to do that is with online savings accounts — high yield ones.  Big banks have entire divisions dedicated to operating strictly online. Being online, they don’t have to pay tellers, electric bills, security costs, heating and air conditioning bills, leases on buildings, and so forth. So, if they have no overhead, they can afford to pay a higher interest rate to you to use your money — more than the local National City or Huntington bank down the street can. They take your money and make loans with it, as usual, but pay a much higher rate to you because it costs them less money to use your money. If I had $75,000 dollars in my Huntington Bank savings account, it would earn .75% Not even 1%! However, that same 75,000, or just one plain old dollar, would make about 4.5% in an online savings account. How about that? $2,000 dollars in an online savings account would pay $90 dollars in one year, where as if that same $2,000 dollars was put into the local bank, earning just .5% (and that’s being generous), in that same year, would earn just $10 dollars. A difference of $80 bucks. Now, I don’t know about you, but potentially throwing away $80 dollars doesn’t sound smart to me, and heck, I certainly could use that $80.

Sign up for a reputable bank’s online savings account, and get rid of the savings account you have at your local bank TODAY! You want every penny you can working for you. When I closed my savings (not checking) account at my local Huntington bank, they asked why. I happily told them that I was switching to an online savings account. Their eyes cast downward and they sighed while saying, “Oh.” They new what I was doing and it sounded like they were losing a lot of business that way. That should be encouragement to you, if you are nervous about going this route: Many people are doing this!

Here are some reputable places to look at and start:
HSBC
Capital One
iGoBanking
Click on one above and find their “High Yield Money Market Account” or MMA. Many banks do this, and if you want to compare, go to Bankrate.comand that website will list out all the online high yield savings accounts, by customer satisfaction, percentage rate, or whatever you want. The process of setting one up is very easy, but you do need to pay attention to the online steps and follow them carefully.

We set up our accounts with Capital One, but many are easy and functional as well. We signed up online and filled out our bank’s routing and transit number (found on every one of your checks) in the online enrollment process. Within one week, Capital One deposited two small amounts into our Huntington checking account and then withdrew them. They were 61¢ cents and 38¢ cents. Then, once that happened, we filled in those two amounts in the enrollment form online. This verified that I was who I said I was, and that I had a legitimate bank account. Then, Capital One mailed me a login and password that I then used to log in the first time. I then changed it to something more memorable. That was it, it is all set up. When I log in, I can see a a drop-down box that shows my online savings account with Capital One, and my Huntington checking account. I can then make transfers between the two. My paycheck goes into my checking account, and then my Capital One account makes automatic withdrawals from my checking account for different things we want to save for. Each transfer takes three business days, so think a little ahead, but also, it’s good to keep a small “safety net” amount in your checking to cover unexpected costs that come up inside of the three day window. But don’t keep too much in your checking! Remember, the whole point is to earn as much interest as you can on as much money as you can.

Pay yourself. This high interest online savings account should change the way you think about money and saving. It opens up a lot of new opportunities, and with automation, like automatic transfers, it is quick and easy to start saving, all without you having to remember to set money aside. I, like most people, have a hard time setting money aside. If I see it, I may end up just spending it, instead of saving it. We have six accounts set up inside our online savings account at Capital One. Each one takes out a specified amount from our checking account, on a specified day. I have all six take money out of our checking on the 25th of the month — that way I know there is money in there from my paycheck. The six accounts are: Main savings, House, Cars, College, Vacation, and Furniture. Each month we have a certain amount go into each one. This is where it really gets good. We have certain bills that re-occur annually (house insurance) and biannually (property tax, car insurance, etc). Pay yourself these bills each month and make money on the interest until the bill comes due! For example, lets say our property tax is $2,400 dollars a year, or $1,200 dollars every six months. In our county, taxes are due twice a year, so in this example, you would want to pay yourself $200 dollars a month, every month, for six months. This method is much easier than trying to cough up $1,200 dollars all at once when the bill comes in the mail. Put the money away, since you have to pay it anyway, but now you are making interest off that money. So, instead of having $1,200 dollars at the end of six months, you would have $1,254 dollars in your account to pay your $1,200 dollar tax bill because of your interest rate. Once the bill is paid, you have $54 dollars left. Start paying yourself $200 a month again, and in six month, you’ll have $1,254, plus the $54 you started with, and you’ll have over $1,310 dollars. And as this cycle continues, you’ll continue to make money. Do this with any recurring bill. Set it up so that the transfers are automatically done each month so you don’t even have to think about it. When I get our car insurance bill, tax bill, or whatever, I don’t even sweat it because I know I’ve got the coin in the bank, plus interest. (I then pay those bills with our credit card and get either 1 or 3 percent back!)

With some online savings accounts, they even provide a debit card linked to it, so spending is easier (not necessarily a good thing: harder access to your money means you are more likely to save it! Just like not carrying a credit card or cash.) If you keep your spending under control, the debit card is a great convenience factor.

Where else can you set up a way to earn nearly 5% on your money, have it cost you nothing, provide an easy way to start saving for rainy days or special expenditures like vacations or toys, and earning interest with only one dollar (opposed to banks which have tiers where the first $50,000 may only pay half a percent of interest)? Open one today! Even if it is only 10 bucks a month, because one day, you will be glad you did. People who fear the internet ultimately lose out. Don’t be afraid, the internet is safe, if you stick with reputable web sites (not: Jim Bob’s savings accounts). I feel bad for all the people who fear the internet and put their money away in something “safe” like a CD. A CD may pay 4.5% for one year, just like an online savings account, but with a CD, you lose access to your money for a whole year!

Finally, credit card usage. This is another great way to earn free money. With disciplined use, we earned almost as much in one year by using our credit card that pays us back, as we did with our online savings account. How about that? Finding a good card is half the battle, but once you do, life is wonderful. A word of caution here: credit cards must be used with diligence and discipline. I DO NOT buy into the idea that some people aren’t cut out for using credit cards because of overspending. We are as responsible as we choose to be. It takes practice, but with a little foresight, a little thought about “How long will this take to pay back?” and “Do I really need this?” everyone should be able to use a credit card responsibly.

Credit cards are not for increasing your wallet size! If you do not have the money in your bank account, do not put credit on your credit card. How simple is that? Do not use a credit card to cover expenses that you can’t pay for, even in an emergency. If you need cash, talk to a rich relative, your local bank, or get a second job, but don’t put bills on a credit card — the interest will kill you and your whole plan of earning wealth via interest. Embrace the mindset that these banking jokers have to pay YOU interest, not the other way around! Use them to your advantage, and see things from the viewpoint that you won’t be a sucker or slave to the banks. Make THEM play the fool for once and have them pay you.

So what card should you use? Reward cards are the only way to go. There are as many reward cards as their are preferences. I personally don’t care what interest rate credit cards charge in interest because we pay our bill off every month. Reward cards (ones that pay you back or give you something in return, like airline miles) usually have higher interest rates on balances, but who cares? My card could have a 50% interest rate, but since we pay it off each month, it doesn’t matter. Cards that don’t pay rewards usually don’t have as high an interest rate, but why fool with them if they aren’t going to pay you to swipe your card? Don’t be the sucker; make them be the sucker and make them pay you for using their card. Since we never carry cash, we put almost everything on our card. Why use cash or checks when I get paid to use a credit card? Our rewards add up fast . . .

The best card that I have found is the Chase Freedom card. I know there are lots of cards out there, and many people have their own ideas on which card is best, but in my opinion, the Chase Freedom card is the best and is what we use. Why is it the best? For three main reasons: it pays us back at either 1% or 3% for each purchase, depending on what the purchase is. (3% off any gas, pharmacy, grocery, fast food, and many other categories, and 1% back on all other purchases). Secondly, it will allow us to switch between cash back and points, like airline miles, and back again. One month I may want to cash out some rewards in the form of money. The next month, I may want those points to go toward airline miles that can be used on my next airline ticket purchase. They are switchable. Finally, it is one of the few cards that will allow you to pay the balance in full, each month, automatically! You heard right: never pay late fees or finance charges with this card, because every month, it deducts the monthly balance from our checking account. Most cards won’t let anyone do this because they love it when you only pay the minimum balance or are late because then they get to make more money off you and charge late fees! But the wise financial wizard that you are will never have to worry about this with a Chase Freedom card because it will pay off your balance without you having to remember to do so, or even be home. If you are on vacation or celebrating during the holidays, it pays off your card. Who hasn’t forgotten to pay a bill? With this card and a properly set up online bank account, you won’t have to worry about it again, and you can earn money too! Click on the picture of the card above to sign up.

I don’t type any of this to gloat, preach, or be condescending. I know that most people who read this will already know most everything I’ve mentioned here. I do hope though, that this motivates you to get out there and sign up for online banking, a good rewards credit card, and most importantly, a high yield online savings account. Do it today — you’ll be glad you did.

For more, visit TobyLaura.com!