November 2006

ING Direct has announced an increase in the interest rate for its Orange Savings Account from 4.40% (APY) to 4.50%(APY). Saw this ad on their website today.

While the rate increase is not that exciting, I am hoping that this rate increase signals an increasing trend. A few years ago, when I opened my ING Direct account, it was offering the highest rate in the market and was aptly called the “leader”. Now, at least 30 banks offer more than what ING has to offer. At this rate it should be aptly called as the “lagger”. I really love ING for how they make things simple, but this is not helping!
Click here to check out what other banks are offering. Click on the “Search By 100 Highest Yields” option.

The 63rd edition of the Carnival of Debt Reduction is up at MightyBargainHunter.com. A lot of interesting articles, as always. For those who are not aware, John of Mighty Bargain Hunter is also the founder of this carnival.

I should have posted this on Monday, sorry about the lazy-ass delay.

While you are here, do leave your thoughts on “Would you donate to charity if you were in debt?” and read other interesting comments on the topic.

The other day, I came across an old article (published 2002) from New York Times reprinted on this website. The article is titled “Hijacking the Brain Circuits With a Nickel Slot Machine“.

The article relates compulsive gambling to dopamine activity (dopamine is a naturally occuring chemical in our bodies that responsible for feelings of “pleasure”; it’s the same chemical that swings into action for drug addicts). This is what it says about gambling:

Many people visit a casino, lose money , and are not tempted to go back. But compulsive gamblers seem to have vulnerable dopamine systems,” he said. “The first time they win, they get a huge dopamine rush that gets embedded in their memory. Then they keep gambling, and the occasional dopamine rush of winning overrides their conscious knowledge that they will lose in the long run.

I was wondering how that paragraph would read if we substituted “gambling” and related terms with “shopping” and related terms. Here is how it will read:

Many people visit a mall, buy stuff, and are not tempted to go back. But compulsive shoppers seem to have vulnerable dopamine systems,” he said. “The first time they shop, they get a huge dopamine rush that gets embedded in their memory. Then they keep shopping, and the occasional dopamine rush of buying overrides their conscious knowledge that they will get into debt in the long run.

That makes sense to me :)…I have seen people who behave/spend in exactly that manner. Forgive me for I am being very unscientific and wishful here, but the way I see it, the gambling and spending problems might be related. If that is true, compulsive spending/shopping might also be related to weak dopamine systems, in the same way as compulsive gambling is related. Such dopamine activity is evident (to me) when women shop for clothes and shoes and when men shop for electronics and hardware.

Now, if they can treat compulsive gamblers with medications, they should be able to treat compulsive spenders/shoppers with some medications too. Wouldn’t it be nice to have a pill that you can take a couple of days before Black Friday (or Cyber Monday) and just watch the crazy days go by without feeling the “urge” to shop? :). In some cases, such pills should work well with pills for stupidity. :)Btw, see what it has to say about money:

Several studies were published last year looking at monetary rewards and dopamine. “Money may be abstract but to the brain it looks like cocaine, food, sex or anything a person expects is rewarding,” said Dr. Hans Breiter, a neuroscientist at Harvard. “People crave it.”

And a few interesting words about economic decision making:

“Economists and neuroscientists use the same mathematical equations for modeling market behavior and dopamine behavior,” Dr. Montague said. “Neuroscience may provide an entirely new set of constructs for understanding economic decision making.”

I was reading this interesting article on MSN titled “Huge debts, paid off fast” and stumbled on something worth a thought. Here is an excerpt from the article:

Thompson also decided to live on a cash system rather than try to “budget every dollar — that would drive me crazy.” She is paid twice a month and allots herself $150 in cash to cover “gas, groceries and anything else I want that is not a bill. … When the money is gone, it’s gone.”

Thompson said she still goes out with her friends but typically uses coupons or dollar menus when she eats out. She still gives $300 a month to her church.

Since February, Thompson has paid off $8,000 of her debt, and she expects to be debt-free by November 2007. She stays motivated by remembering her goal.

I don’t mean to offend anybody’s religious setiments here, but $300 is equal to the woman’s monthly cash expenditure on essentials like gas, groceries, and other “non-bill” items. Consider this, if she has paid off $8,000 since February, which means she is paying roughly $800 a month (assuming this article is recent). The article says that she intends to be debt-free by Nov 2007. She could easily divert the $300 charity-funds to her debt payment and get out of debt much faster. FYI, she makes “about $32,000″ annually.
What would you do? Stop your charity for a while and get out of debt faster? or keep donating and keep you debt alive for a longer period of time?

Here are some snaps taken at my local Best Buy store on Black Friday. The two snaps on the top were taken at 1:15 am and the next two were taken at 4:45 am. That is only half the line at 4:45 am, the line snakes behind the store and into a neighboring parking lot. My estimate is about 400 people at 4:45 am.

Some ridiculous stuff

• Average spending per person on this year’s Black Friday: $790 (!!)
• “This is not a toy,” shopper Nuny Grey says of the big TVs. “This is a necessity in television today. This is really not a toy.”
• Last year, women spent $55 billion on electronics — men, just $41 billion. And given the chance to unwrap a flat-panel TV, diamond jewelry or designer shows, a shopping 77 percent chose … the TV.

Holiday Spending Frenzy

With sales up 7 percent from last year, Black Friday forecasts bountiful spending this holiday season. Bianca Solorzano reports.

Black (and Blue) Friday

Over 137 million people are expected to hit the malls tonight battling it out (sometimes literally) for the best deals. Sharyn Alfonsi reports that holiday sales are up by 5 percent from last year.

Here is the irony

Consumer Debt At $1 Trillion

The Federal Reserve reports that the nation’s consumer credit has grown to more than $1 trillion. People are spending more money than they actually have. Sandra Hughes looks at the reasons why.

Oh ! so now we want to wail about consumer debt?

[Numbers and videos source: http://www.cbsnews.com/ ]

Here is an excerpt from the play “The Merchant of Venice” by William Shakespeare. Shylock, the merchant, puts forth this proposal to Antonio who is desperately seeking a loan from Shylock.

This kindness will I show.
Go with me to a notary, seal me there
Your single bond; and, in a merry sport,
If you repay me not on such a day,
In such a place, such sum or sums as are
Express’d in the condition, let the forfeit
Be nominated for an equal pound
Of your fair flesh, to be cut off and taken
In what part of your body pleaseth me.

For those who haven’t seen the play, or the movie, or read a book about it, Antonio readily agrees to this bond (!).

What makes him do this? In our language, he has read the “fine print” and understands what that means, and yet he agress to the debt, signs the bond, and almost looses his heart (literally) over it.

We all get into such deals at times, with a subsequent reaction “What was I thinking?”. We know the dangers involved in the deal, but the impulse is just too great to resist. We give ourselves false hopes that everything will work in our favor, and don’t think about what will happen if things go wrong. In short, impulse blinds our foresight and reason.

Fortunately, Antonio luckily had some clever friends who came to his rescue (in the nick of time). But unfortunately, our life is not a play and we may not be as lucky.
Think about this when you get some time. Who (or what) was responsible for the situation?

I will elaborate on some related issues in our life in a forthcoming post.
By the way, there is a 2004 movie that goes by the title of the play, starring Al Pacino, Jeremy Irons, Lynn Collins…very well made. The soundtrack by Jocelyn Pook is worth a ear.

I am not very pro-black-friday when it comes to electronic stuff, because I have seen better deals on a lot of stuff on non-black-friday days. But, this thing really got my attention. I stumbled on this piece on Electronista.com and just couldn’t believe my eyes. Here is a screenshot:

If you are looking for a laptop, then there is nothing like that, if it exists. There must be a catch though which is not made very clear in the advertisement. Hopefully people will read it before they spend the money. I think it has got to do something with the 12-month Vonage subscription..that costs about $180+taxes, so it might get a bit expensive-er than $99. In that case, you might want to check Bestbuy.com for a $249 deal for a Toshiba notebook with approximately same configuration.

And if you don’t need a laptop, it doesn’t matter if it’s $99 or $249…you will be wasting your money if you buy one when you don’t need one..so keep that in mind.

Happy turkey digesting all you guys.

I have to admit it, I didn’t like Technorati for a long time now, ever since their spiders stopped visiting my earlier blog. My information on Technorati never got updated…no new posts, no new incoming links, and the when I searched for my blog, it always showed me the irritating “Huh?” …man it was crushing my already miniscule ego to nothingness. I must have reported this matter to Technorati like half a dozen times over the last few months, and no one ever replied back. I was almost about to give up on this when I stumbled on a few blogs that mentioned how Janice Myint from Technorati Customer Support helped them to get things back in order.

I emailed Janice about my beef with Technorati and sure enough I got a reply in a few days informing me that everything has been sorted out :). The incoming links count was updated and my latest post also showed up. But, by this time another Technorati trouble started to take shape for me. By the time Janice replied back about my earlier complaints, I had already moved to my current site, and incidently it was having the same problems with Technorati like my former blogspot.com site. This time, however, I wrote directly to Janice instead of Technorati Customer Support. Again, I got a reply within a few hours from Janice saying everything is now back in order for the new site too ! ..now that is some prompt customer service.

So if you have any technical trouble with getting your stats right, claiming your blog, and other related stuff that is causing you some ego problems, don’t waster your time cursing Technorati for all the mess. Go ahead and write to Janice Myint and see how fast your troubles vanish. Here is her email id: jmyint@technorati.com

Click here to read about Janice Myint on Technorati.com

Man this Ebates thing is for real :). I had signed up for a Sharebuilder account about 3 months ago through Ebates and it had promised me $20 at the time. Honestly, I was not really expecting to see anything from Ebates…well just because I had never heard of the name before that. Yesterday, I was surprised to see a “Big Fat Check” from Ebates in the mail…..ok it wasn’t really big or fat or anything, but hey $20 is $20….even sweeter because I didn’t have to do anything for it and also got a $50 Sharebuilder bonus in the process.

Now, that I have “verified” that this stuff works, I don’t have any qualms about recommending it. In fact, you can get yourself a head start of $5 (and I will get a $5 bonus too) if you click on this referral link and sign up:

Update: There is a $10 referral bonus offer (you get $10 and I get $10) valid till March 15th, 2007:

This is the referral link for getting $10 bonus (till March 15th) 

This is the regular referral link ($5 bonus) - does not expire.

For those who don’t know what Ebates.com is: It’s a program similar to something like Upromise.com, you buy stuff from major retailers by going through their website , and in return they give you some cashback, or bonus or discount coupons. Always read the fine print before signing up for anything. To make it a bit easier, I am copy-pasting an important excerpt from Ebates’ terms and conditions:

Every three months Ebates sends to its members the Cash Back that they have earned, provided that the member has earned at least $5.01 in Cash Back Rewards. If the member has earned less than $5.01 Cash Back, Ebates will carry the member’s money over to the next check.