What financial products I use and recommend
While this site will go into greater depth on various products, this is a good summary of my recommendations on various products and services. This list is based on my experiences and mistakes over the years.
I’ve used at least 50 over the years and the goal has always been to get a no annual fee card with the best rewards program with minimal or no foreign transaction fees. Interest rates do not matter. This list is strictly based on you completely paying off the credit card at the end of the month. There is no point in selecting a card for its rewards only to lose those rewards paying exorbitant credit card interest.
The best way to select a credit card is to decide how much work you are willing to do to accumulate and spend points. There are no shortage of websites that will assist you in finding and selecting a credit that will assist you in collecting points.
Fidelity Elan Visa – This credit card gives you 2% cash back on all purchases directly into your Fidelity account. It has two drawbacks:
- You really should have a Fidelity account to make it worth the trouble
- It does have a foreign transaction fee, so you’ll need a second card that does not have that fee
The positives are:
- No limit on the rewards
- No fees
- It’s cash, not hotel, airline or other points programs that can sometimes be challenging to redeem. It is the ultimate “set it and forget it” option.
I have done the Credit Card non-cash rewards process many times and easily the best deal I’ve found if you want to do the work is the Southwest Companion fare. These steps allow you to sign up for two credit cards, pay their annual fees, make $10,000 in purchases and then get 12 to 23 months of a free companion fare on Southwest to any destination during that period for as many trips as possible. The best site for understanding these steps is here: https://thepointsguy.com/2017/01/earn-southwest-companion-pass-2017/. We did this is 2017 and can tell you it is incredibly generous and has saved us thousands.
Banking and Brokerage
It will be surprising, but the best option for both of these is Fidelity since they offer full banking services along with their discount brokerage services. They even have brick and mortar buildings in most cities allowing for even more assistance. Fidelity offers more than enough asset classes for index funds and is either the leader or nearly the leader in expenses for all of their funds. See my review on the comparison between Vanguard and Fidelity for a more detailed comparison.
Banking is where Fidelity really surprises people. They offer reimbursement of ATM fees for any ATM worldwide. They also offer the standard banking services including debit and credit cards, bill pay, check writing and many others. Ultimately, banking is becoming so commodotized, it really doesn’t make sense to have a real brick and mortar bank that you visit. Using the same company for brokerage and banking services simplifies your life.
Whatever you do, pick something here, do not overlook a comprehensive monitoring of your financial situation.
I have used Quicken for over 25 years and still love it for what it can do for me, but I would only recommend it for someone who is really passionate about personal finance, budgeting and tracking investments. The tool has every possible feature that you’d want and plenty you don’t need, albeit only as a Windows or Mac-based installed product using an interface that hasn’t changed significantly in a decade. I normally recommend mint.com and personalcapital.com. These tools can meet most consumer’s needs and unlike Quicken, run as a cloud-based product so setup is quite painless. PersonalCapital is continuously improving and has far fewer annoying adds than mint.com.
A new alternative is to use the built-in monitoring tools offered by companies like Fidelity and Vanguard. Fidelity offers multiple tools for planning retirement as does Vanguard. Fortunately, these tools will normally allow you to collect data from financial sources outside their company. Unfortunately, they can be less easy to use and more error prone than Personal Capital, but they are rapidly improving and you can certainly use them in conjunction with Personal Capital.
Auto and Home Insurance
Recommending a specific company here doesn’t make sense since everyone’s circumstances are so different that no one company is going to be best. There are so many variations by state, past driving history, children on the policy, military background, etc. The main recommendation is to always have the highest possible deductible for every coverage to minimize the costs. The simple rule for all insurance is to only purchase coverage for the catastrophic losses that will seriously damage you financially. Low deductibles are expensive and in the long run, even if you make some claims, are going to be far more expensive to you. What you shouldn’t scrimp on is liability insurance since this is where you could potentially be subject to a large lawsuit. Totally destroying a car would only have you out for the value of the car. Injuring someone with your car could cost you hundreds of thousands or even millions of dollars. When you have a higher net worth, typically over one million dollars, you should consider purchasing an Umbrella Policy that will give you an increased level of liability protection across both auto and home.
A good unbiased discussion on insurance can be found on the Bogleheads site.
If you have dependents depending on your income, you must have life insurance. Unlike disability insurance, though, if you have no dependents, do not purchase this insurance through your employer or elsewhere. Life Insurance is one of the most foolish purchases that can be made if no one actually relies on your income. Many employers offer this benefit, but it probably won’t be enough or a better price than a term Insurance policy you can purchase outside your employer. You can shop prices on term4sale.com for free with no obligation. You can certainly purchase a subsidized plan from your employer, but supplement it with Term Life insurance purchased elsewhere.
This is a good article on how much life insurance to buy.
Personal Finance Books and Sites
bogleheads.org – best, unbiased site with a comprehensive wiki. Their forum tends to lean towards older and wealthier contributors, but is extremely active and quite accurate.
CanIRetireYet.com – Excellent, deeply in depth analysis on many topics for someone who has retired early living a frugal lifestyle and careful planning.
These tools are proliferating at an incredible rate and are more important than ever. I prefer CreditKarma. It is quite easy to use, highly recommended and free. They obtain data from all three major credit reporting services and is the cheapest way to monitor credit and understand why your credit rating is going up or down.
This is a category that is changing rapidly for the better. At the moment, if you don’t care about live sports or local news, there is normally no reason to subscribe to a cable or satellite service. You should just subscribe to a combination of steaming services (Netflix, Hulu, HBO, Amazon Prime) and then either use your wifi-enabled TV or steaming box (AppleTV, Roku, Google Chromecast) to view the content from those services. Currently, the main challenge with streaming is watching live sports TV and some events like the Academy Awards, Super Bowl, Grammy Awards, etc. But that is rapidly changing and may have already been resolved by the time you read this. The hassle factor for streaming is dropping quickly and the reality is that cable and satellite are quickly going the way of the land-line in the house. Very few people under 30 are paying for cable or satellite because it makes so little sense for them.
It’s important to note that its the subscriptions in your life that cost you far more than the big purchases. That $100 monthly cable bill doesn’t sound like that much, except that it is $1000 per year and never ends, especially once you get used to it and don’t want to go through the cancellation hassle. Do everything you can to keep subscriptions to a minimum or non-existent.
For my situation, I have combined DIRECTV with AT&T for cell phone service and satellite television. I’m still devoted to an out of market NFL team and this is my only method to see entire games using Direct TV’s Sunday Ticket. In a future blog post I’ll discuss how I get Sunday Ticket for free every year and a large package of channels for $19/month via negotiation. I also have a family of five with cell phones and been with DIRECTV for 16 years, so I have some advantages over most and have some compromises I’m not willing to make yet.