Be sure that you don’t forget to consider those fees when preparing your taxes. Those tender offer fees did not show up in my buy or sell confirmation sheets and they may not show up on yours either. The 1099 tax forms from my broker also didn’t include these fees, but my broker’s tax reporting is rather skimpy. Those fees do show up in my transaction history and monthly statements.

I believe the proper way to handle these transaction specific fees when filing U.S. income taxes is to adjust the cost basis of the stocks. I’m not a tax expert, so please check with a tax professional. You can also consult IRS Publication 550. The publication does not make specific reference to voluntary reorganization fees, but it does generally discuss how to handle transaction based fees.

I hope you didn’t forget to adjust your tax returns for tender offer fees. If you did forget and already filed your taxes, you could always consider filing an amended return.

When you are able to earn more income than your expenses, you will eventually start accumulating cash. For some, this comes easier than for others. The key usually involves living below your means and adopting a frugal lifestyle. Alternatively, you can focus on maximizing your income potential, but that can be difficult in an economic downturn. The best strategy for saving is usually the conservative approach of managing your expenses.

What should you do with your cash savings? Some of the basic options to store your cash include:

1. Your wallet/mattress
2. Basic checking account
3. Interest bearing checking account
4. Savings account
5. Money market account
6. Certificate of Deposit (CD)

The key differences with the above options include security, accessibility, rates of return, minimum deposit requirements, and fees. An optimal strategy for most will likely utilize a blend of several of the above options.

I personally like to keep cash in my wallet for just a few days worth of expenses or what I think a minor emergency might cost, since I can usually rely on my ability to use my credit card or access an ATM. When I travel to less familiar and more rural areas, I tend to increase my cash on hand just a bit to be safe and to avoid fees.

The next place my cash goes is to my checking account. Actually, this is usually the first place my salary and business earnings go. I like to maintain about a full month’s worth of expenses as my minimum balance buffer in this account. The key aspects I look for in a checking account include no fees, electronic bill paying, electronic transfers, and easy access to free ATM withdrawals.

The next place I store cash is in a savings account. FDIC insurance is a must. The account should also be easy to link to my checking account, so transfers are painless to do. After that, I’m most interested in the highest sustainable yield I can find. I include the word sustainable, since I’d rather avoid opening new accounts all the time to chase the highest yield. I’d rather find a savings account that consistently provides a better than average yield than one that briefly provides the best rate but then underperforms. Online savings accounts have provided some of the best higher yield options in recent times.

After I’ve built up about three month’s worth of savings, I start moving my cash into longer term options. If I’m saving for a particular item or event, I utilized CDs to store cash until I need it. CDs often give you a higher rate of return than savings accounts, but the drawback is that your money is often tied up in them for a certain time period. CDs come in all sorts of durations, starting with periods as short as 30 days and all the way up to 5 years.

If I don’t have any specific plans to use a block of cash within the next five years and my emergency savings account is fully funded, I then move my cash to the money market account at my brokerage firm. Money market accounts typically pay higher interest rates than savings accounts. Sometimes they require higher minimum balances. You also need to be a bit more careful with money market accounts, because some are not FDIC insured. Recently some money market accounts “broke the buck” and went down in value temporarily. The money market account at my brokerage is a convenient place to store cash until I find a suitable investment opportunity.

How do you manage your savings? Share your thoughts on banking basics in the comments section below.

I’ve read quite a few online discussions regarding the Coverdell ESA, and I’ve noticed that there is quite a bit of misinformation out there regarding these accounts. Let me clear up a few things by referring to the official authority, the IRS. The IRS’s March 26 edition of Tax Tips provides a good summary of the key features of the Coverdell ESA, and it includes several links to more in depth information. Here are some highlights:

• Earnings on contributions will be distributed tax free, provided that they are used to pay the beneficiary’s school or college education expenses.
• Up to $2,000 may be contributed to a child’s Coverdell ESA each year (assuming your adjusted gross income is less than $95,000 for single taxpayers and $190,000 for married taxpayers).
• You can fund both a Coverdell ESA and a 529 account as long as you don’t exceed the annual gift tax exclusion per child (currently $13,000 or $26,000 for married couples, see IRS Publication 950).

Another good source of information on the Coverdell ESA is Savingforcollege.com. They provide a detailed list of the advantages and disadvantages of the Coverdell ESA.

I decided to open up my Coverdell ESA with Firstrade. There are not many options for opening up a Coverdell ESA with an online discount broker and many of the remaining options charge annual maintenance fees (a major drag on performance for a small account). Firstrade has no annual fees, no account establishment fees and low commissions. The only drawback is that they have a $50 out-going account transfer fee if you decide to move your money to another broker. I have a Roth IRA with Firstrade and I’ve been fairly pleased with their service so far. If you are interested in opening an account with Firstrade, I would be more than happy to send you a referral (Disclosure: I get some free trades for referrals).

Originally published on October 17, 2004. Updated to reflect current rules.

Given that he’s not yet in elementary school, I have plenty of time to figure this out. I think when the time comes to introduce him to stocks, I think it would be best to get him a physical stock certificate to make it more real and tangible. A dividend paying stock would also probably be preferable because the quarterly dividend checks would likely keep my son more interested in the stock. Finally, I think the stock certificate should be attractive looking so I can hang it up in his room.

At this moment, a Disney stock certificate sounds like a good choice for my son’s first stock certificate. It’s an attractive looking certificate that is illustrated with Disney characters. The colors match the color of my son’s room, which is an important feature for my wife. The Walt Disney company currently pays a $0.35 annual dividend that currently yields 1.1%. While that dividend is modest, it will still be exciting for my young son to receive an annual check addressed to him. The wide economic moat of the Disney brands should keep the dividend safe for quite a while.

A framed stock certificate makes a great gift for child in your family. When considering purchasing such a gift, it might be worth buying the stock though one of the specialists that deal with framed stock certificates. This will likely save on brokerage fees and also provide an attractive frame, which also usually allows for a personalized engraved message. It might be a few more years before I get a stock certificate for my sone, but it is a gift defenitely worth considering for older children.

Disclosure: I do not currently own shares in The Walt Disney Company. This is a sponsored post.

At a basic level, a prime brokerage is simply a broker that offers a group of specialized services to top clients. This service spawned from the needs of hedge funds. A prime brokerage facilitates the clearance and settlement of securities traded by active market participants. The key advantage of a prime brokerage is that it usually provides a client with ability to trade with multiple brokerage houses while maintaining a centralized master account with all of the client’s cash and securities. A prime brokerage often includes the following services:

• Securities lending
• Margin financing
• Trade processing
• Cash management
• Reporting
• Operational support

Other more specialized services may also include assistance with introducing hedge fund clients with hedge fund managers. It can also include office space leasing on-site for clients. There are also a wide variety of risk management and regulatory consulting services offered. Other prime brokers specialize in niche segment of the financial markets, such as IPOs. For example, Triad Securities provides comprehensive data on the global new issue market.

Prime brokerage services are provided by most of the large brokers, such as Goldman Sachs, UBS, Morgan Stanley, and Triad Securities. They offer a more customized and personalized service for their largest and most active customers. It will likely be quite some time before I ever need to consider such services personally, but it’s good to know what is out there for the top market participants.

Sponsored by Triad Securities.

How would I describe the Sumo Omni?
It’s a large (4.5 by 5.5 feet) nylon sack filled with what feels like bean bag material that can be molded into different configurations. You can lay on it flat, fold it into a futon-like position, squish it into typical beanbag chair formation, etc. See for yourself at the website. If you can get past the cheesy, soft-core pornish image of a model giving a “come hither” look while suggestively straddling the Omni on the home page, the pictures are instructive on how to use the thing.

So, what did I think of it?
It really is surprisingly comfortable. I was a bit hesitant at first, as the rip- and stain-resistant fabric didn’t initially strike me as luxurious. But once I sat on it, I was hooked. Although you can make it into a variety of shapes, we seem to like it as is, laying it flat and lounging in front of the TV. The kids treat it as a big toy, alternatively jumping on and climbing all over it. In fact, I set my toddler on it, and turned around a few minutes later to find her asleep. While I would not recommend this as a kid bed for safety reasons, this just goes to show how comfortable it is. It’s large enough for more than one person to enjoy, but can be transformed into an individual seat. It’s perfect for a family/TV room, apartment, teen bedroom, etc. In theory it would be perfect for a dorm room, but since most dorm rooms are slightly smaller than the average closet, the Omni might be too big for it. The shear size of the thing could be a drawback for those with limited space. Also, the $129 price tag may scare some away. However, after a cursory look online for similar items, I was surprised that this price is actually cheaper than comparable items. For example, I saw some “extra large” bean bag cushions advertised for more than $200.

The bottom line is that I would highly recommend the Sumo Omni, although I must warn you that it promotes extreme laziness and lack of productivity. Not necesarily a bad thing for value investors waiting for a fat pitch.

Contest
If the Sumo Omni sounds like the thing for you, I’m actually giving one away for free.  The generous folks at Sumo Lounge International offered me the opportunity to give away one free Sumo Omni to a reader of Fat Pitch Financials. You can win your very own Sumo Omni by leaving a comment below that discusses your favorite place to relax and your preferred Sumo Omni color.  Be sure your comment includes a valid email address and the word “relax” so I can ensure that your comment doesn’t get screened out by my spam filter.  This free Sumo Omni prize can only be shipped to the United States, Canada, and the United Kingdom. I will select one random comment on Sunday, November 11th at 5:00 PM. Your odds of winning will be determined by the number of entries I receive. Good luck.

I wonder if today’s free access has anything to do with the debut of the Fox Business Network yesterday. Nah, I’m sure it is just a coincidence. ;-)

If you like what you see today at WSJ.com, consider signing up for an online or home delivery subscription by clicking here.

I found the book to be very readable.  Part I of the book takes you through all the major household systems, such as insulation, windows, heating, cooling, and more.  Part II of the book actually details the most energy-efficient appliances on the market.  If you are thinking of replacing any appliance in your house, I recommend checking this guide to find the most energy efficient models.

So what can you do right away to improve your home’s energy efficiency right now according to this guide?

• Turn down the temperature of your water heater to the warm setting (120° F).
• Check if your water heater has an insulating blanket. An insulating blanket will pay for itself in one year or less! (I need to do this one soon!)
• If you have one of those “silent guzzlers”, a waterbed, make your bed today. The covers will insulate it, and save up to one-third of the energy it uses.
• Start using energy-saving settings on refrigerators, dishwashers, washing machines, and clothes dryers.
• Survey your incandescent lights for opportunities to replace them with compact fluorescents.
• Check the age and condition of your major appliances, especially the refrigerator. You may want to replace it with a more energy-efficient model before it dies.
• Clean or replace furnace, air-conditioner, and heat-pump filters.

You can visit the Consumer Guide Online for more advanced tips and condensed online guide.  Conserving energy saves you money and benefits the environment. Many of the environmental benefits are not easily quantified in dollars and cents but are just important to your well-being as financial wealth. 

Home energy use can contribute to urban smog, acid rain, harzardous waste, habitat loss, and global climate change. Do your part by trying to reduce your home energy use using the tips and research on the most energy efficient appliances in the Consumer Guide to Home Energy Savings.  I did my part today by participating in Blog Action Day.

Fat Pitch Financials is the personal blog of a value investor with a strong interest in personal finance. Here at Fat Pitch Financials you can learn how to taken the next step beyond investing in index funds. I have learned to exploit some of the advantages of being an individual investor (yes, there are advantages) by investing is special situation opportunities in the stock market in a similar manner to the way Warren Buffett used to invest in what he called “workouts” when he was younger. Fat Pitch Financials is also the birth place of another blog carnival, the Festival of Stocks, which was inspired by the Carnival of Personal Finance.

This week’s Carnival of Personal Finance submissions have been placed in specific categories below and listed in no particular order. The categories include banking, debt, frugal living, investing, planning, taxes, and other topics. Now fasten your seatbelts and enjoy the ride.

Carnival of Personal Finance

Banking

• PrsnlFinance.com shares some thoughts on finding the right bank account for your needs.
• Online Savings Blog provides 5 ways to improve online savings accounts. These are tips for the banks to improve their services.
• Money and Values warns us to look out for abusive overdraft charges at your bank.
• Queercents notes the benefits of online banking and bill pay. I love both!

Debt

• Growing Up… shares their cautionary tail of how credit card debt could impact your quality of living in the future in This is Your Life on Consumer Debt.
• Mortgage Blog shares some of the reasons they are increasing their mortgage term from 30 years to 47 years.  I’m not sure I agree with the reasoning present in this article.
• Everybody Loves Your Money warns anyone thinking about cosigning a loan to consider the whole situation.
• Ask Mr Credit Card presents 10 credit card practices that he disapproves, as do I.
• Single Ma’s Fabulous Financials discusses how to close credit cards without affecting your credit scores.
• Grad Money Matters provides a great myth busting article about the relationship between credit cards and credit scores.
• Plus6 provides some advice on how to get out of an auto lease. My advice is to avoid getting into an auto lease in the first place.
• Searchlight Crusade on “My Payment Is Too High and I Can’t Make It“

Frugal Living

• A Canadian and Her Money is amazed at the amount of money she spends on her car each year and wonders if car-free living is the path to financial independence.  My family only has one car, which I never seem to have. I live fairly car free in the Washington, DC area and I love how much money I save.
• Frugal Finance provides 10 tips on saving money on a family trip.  I’m going on a family trip in a few weeks and hope to use some of these tips to save some money.
• Advanced Personal Finance details 10 ways to save money in your budget.
• Cash Money Life’s take on a a recent article titled, “How to Earn $1 Million by Not Watching TV”, is called Earn $10 Million by Not Building Model Trains.
• SavingsAdvice.com also explores how much you could save by dumping TV inspired by the “How to Earn $1 Million by Not Watching TV” article.
• The Happy Rock also looks at the costs of cable and TV.
• FILAM Personal Finance is doing Christmas shopping early and provides the 5 laws of retail negotiation.
• Baby on a Budget looks at cloth diapering and why it is so controversial.

Investing

• The Dough Roller explains how you can technically buy real estate for no money down, but that doesn’t mean that it won’t still cost you cash to deal with capital improvements. Discover the myth of zero-down real estate investing.
• Accumulating Money provides an interesting profile of Carlos Slim. It sounds like Carlos Slim created his wealth from intelligent value investing and I’m interested in learning more about him.
• Smart Saving and Investing explains how to select mutual funds. While I liked the graphics that illustrate the information from Morningstar and FundAlarm, I think the article missed two critical things to keep in mind while selecting mutual funds. It is important to remember that past performance doesn’t necesarily indicate future performance and fund fees can really cost you so it is important to keep them as low as possible.
• The Finance Buff deconstructs some market stats provided by Schwab about market returns from 1996-2006 if you missed the ten best days.  I didn’t check all the math but the approach and answers looked about right to me.
• Kmull goes over his 401K options.
• The Time & Money Group is using basket trading to get ahead of the herd.

Planning

• You Incorporated discusses why it is important to continue to save for your retirement while giving advice to his older brother on paying for college.
• Journey 2 Retirement expects some budget changes after his wife gave birth Monday night.  Congratulations!
• Cheap as chips provides five pieces of advice for getting financial advice from trusted sources.
• Simple Pound provides a plan for how to start budgeting. It is as simple as keeping your receipts and updating a spreadsheet.
• Blunt Money provides three ways for getting rid of financial junk. I definitely need to cut down on the number of accounts I have.
• Free Money Finance explores what percent of your net worth should be in your house.
• Mighty Bargain Hunter also provides his take on your home’s value and your net worth.

Taxes

• InsureBlog discusses a news item about someone suing the IRS over a disputed medical deduction for a sex-change operation. Who said tax law couldn’t be interesting?
• Personal Finance Math shows us how to calculate your average tax rate. This could come in handy when planning.
• No Credit Needed reminds us of the value of an emergency fund with a real life story.
• Rocket Finance argues that lowering taxes on the rich may one day help him become rich.  Ah, the wonders of supply side economics, if only things were so simple.

Other Topics 

• INTJ Personal Development reminds us how it is often more efficient to Just Do It versus wasting time just thinking about doing stuff.  I hope you enjoyed your time at Cornell as much as I did.
• MoneyNing provides a great checklist to help you learn how to avoid losing more things. There are some great tips in this article for absent-minded folks like myself.
• Chief Family Officer questions how much is your privacy worth. You definitely have to trade off your privacy for many so called free offers.
• PowerWealth.com has a well written article on the basics of personal finance called, “To Consume, Save, Invest, or Speculate? That Is The Question.” I loved the definition of speculate provided in the article.
• Family Finance Blog discusses the spending patterns in marriages: the saver and the spender.  I’m not sure this model always works, but worth thinking about.
• Clever Dude provides some information on what people should consider in determining whether adoption is for you.
• The Financial Blogger reflects on two different financial paths in his article, Am I Waking Up or Am I Falling Into a Bigger Dream? The “go to school, work hard and get a job with a good salary and job security” approach vs “do what you like and concentrate all your efforts in it, money will come afterward”.
• My Two Dollars asks, do you own your stuff or does your stuff own you?
• The Financial Philosopher asks whether there such a thing as “original thought?” If so, what would you pay for it? Find out what some have paid for it (including Mohnish Pabrai) in The Pursuit (and Price) of Original Thought. I’m a little bit biased based on the topic, but this was one of my favorites this week.
• The Simple Dollar confesses the ten biggest money mistakes he’s made since his financial meltdown.
• The Digerati Life delves into the topic of wealth and social class in “Does Achieving Wealth Make You “Upper Class”? Facts About Class“
• My Wealth Builder confesses to being a personal finance junkie.  Are you one? If you made it this far, you probably are.
• Millionaire Mommy Next Door continues her series on Baby Steps to Financial Freedom with part three: How to Make Money Management a Family Affair.

That’s it for this week’s Carnival of Personal Finance.  I hope you enjoyed the ride.  Next week’s host will be Blogging Away Debt.  You can catch up on past editions of the Carnival of Personal Finance, submit an entry, or even volunteer to host a future edition of this carnival by following any of these links.

I still have a copy of The Ernst & Young Tax Guide 2007. I’ll give it away to the reader that provides the most interesting and/or unusual story of why they need an extension for their federal tax return this year. By the way, if you are wondering, you can find out how to appy for an income tax extension at the IRS website.

Now let us know how your dog ate your taxes. Be sure to include all the interesting details. My my sympathies go out to all of you late filers. Get cracking!

CreditMe.com is a credit card comparison site that I was recently asked to review.  I’m actually in the market for a new credit card, so I decided to take this site for a test drive.  I haven’t shopped for credit cards in over two years, so I expect that there are some new and interesting products out there on the market now.  I do not carry a credit card balance, but I do enjoy using credit cards for routine purchases while also earning rewards.

The main features of this site that I noticed immediately include the credit card directories that you can browse by issuer or by type of card.  I was surprised to see that only nine issuers are listed.  However, the list does include most of the main card issuers.  Some of the large card issuers that I did not find in the directory listing include Capital One (NYSE: COF) and National City (NYSE: NCC).

The directory also lists card by types. The listing by card types includes:

• Airline Credit Cards
• Balance Transfer Cards
• Business Credit Cards
• Cash Back Credit Cards
• Credit Cards for Bad Credit
• Instant Approval Cards
• Low Interest Cards
• Prepaid Debit Cards
• Reward Credit Cards
• Student Credit Cards

I’m mainly interested in cash back cards and reward cards since I don’t carry a balance.  However, I also was curious about prepaid debit cards.  I can see the security advantages of prepaid debit cards and the potential to use them to teach kids about credit.  I noticed on CreditMe.com that many of these prepaid debit cards allow direct deposit. However, I also noticed that many of the prepaid debit cards also had annual fees. I guess they have to make money somehow.

Each credit card provides a table that displays the following information:

• Intro APR
• Intro APR Period
• Regular APR
• Annual Fee
• Balance Transfers
• Credit Needed

I wish CreditMe.com also provided the length of the payment grace period and late fees for each card.  I recommend that at least these two pieces of information should also be reviewed before picking a credit card.

CreditMe.com also includes an extensive list of resources on credit cards.  I was impressed with the length of the FAQ section and the credit guide is also very extensive.  In addition, there is the option to sign up for a newsletter, but that page does not indicate how often the email newletter is sent.  Finally, there is a page where you can share your experience with your credit cards.  However, only one review is posted there at this time.

My main concern with using a credit card directory like this one is actually clicking on a credit card offer link.  I am worried about security when actually clicking a link to apply to a credit card.  You never really know where a link will actually redirect you. Therefore, I would either type in the URL for the actual bank or do a Google search for the bank’s name and card offer to insure I’m not getting redirected to a fake site.

I believe that CreditMe.com is planning to earn money with the affiliate links on their site, so they might lose out on revenue from people like me who shy away from providing personal information on sites I arrive to via clicking on a link.  CreditMe.com does not provide  any third party verification such as BBBOnLine or VeriSign (Nasdaq: VRSN) that could make me feel a bit more comfortable actually trusting their links.  In addition, there is no information on who runs CreditMe.com.  I recommend they provide their business name, address and phone number on their About CreditMe.com page.

While the CreditMe.com card directory is interesting to browse, I feel that several improvements are needed before this site can really be a good resource.  CreditMe.com has a clean and attractive layout and looks fairly young. If this site invests a bit more in building its reputation and is able to differentiate itself, then it might have a good future.

As I’m starting to thumb through this giant tome, the first thing that has caught my eye is a list of the 50 most easily overlooked deductions. Some of the deductions that look useful include:

• Accounting fees for tax preparation services and IRS audits
• Amortization of premium on taxable bonds
• Cellular telephones
• Depreciation of home computers
• Fees on safe-deposit box to hold investments
• Foreign taxes paid
• Margin account interest expense
• Mortgage prepayment penalties and late fees
• Penalty on early withdrawal of savings
• Subscriptions to professional journals
• Worthless stock or securities

A couple of tips for investors also stand out. The first one involves foreign dividends.  The Guide states, “Don’t report the net amount on your tax return. Instead, you should report the full amount of the dividend (before withholding) and claim the foreign tax withheld either as a credit or as a deduction on your return.”

The second item involves identifying specific shares of stock or bonds sold. Keeping good records on specific lots of stocks or bonds you purchase can save you money in taxes.  You can save money by matching shares with the highest basis when you sell in order to minimize the amount of gain you will need to recognize.

This year I might break down and seek professional assistance with my taxes. I started a business this year to support this site. I have concerns about the revenues I earned from the site before I established the business, since I only registered the business in the middle of the summer. I’m stubborn so I’ll probably still do my taxes using TurboTax and then seek professional assistance of an accountant or tax advisor. In the mean time, I’ll be using the Ernst & Young Tax Guide to get educated on the issues I should be aware of as I organize my documents.

We decided that we could both use a new pair of jeans. After pouting a bit, I reluctantly agree to accompany my wife to our local Hecht’s, which was recently rebranded a Macy’s after Federated Department Stores (FD) acquired the franchise from May Department Stores.

After searching around the store for a half hour, my wife discovered that this new Macy’s had a pathetic petites section.  It had a dismally small selection of jeans for her to choose from and none of them appealed to her.

That left us with the only viable option, visit the Macy’s online store.  After browsing the site for a while, my wife chose a nice pair of Ralph Lauren Polo (RL) jeans and I selected my usual boring pair of Levi’s. My wife was a little unsure of her size, but Macy’s advertised “Easy Returns” on their homepage. She figured if she got the size wrong, we could return it to the brick and mortar store. Surprise surprise, returns were anything but easy.

The jeans took about a week to arrive (kind of slow given how much shipping cost).  My wife discovered that her jeans were too short.  I shook my head. She assured me that it wouldn’t be any problem with Macy’s return policy.  The “Easy Returns” policy states:

Returns are easy and convenient at macys.com. You can exchange or return your purchase to any Macy’s store (find the one nearest you). You can also return purchases directly to macys.com by mail. It’s up to you!

RETURNING TO A STORE
Inside your package you’ll find an invoice like the one shown here. Simply take your purchase, this invoice (make sure the bar code is attached) and the original packing materials to any Sales Associate to process your exchange or return – it’s that easy! You will receive a credit to the original tender (e.g. major credit card).

So we headed back off to our local Macy’s store. When we got to the store, we looked around again for the Ralph Lauren jeans to do an exchange, but we did not find any. While we finished looking, we spotted an employee heading to a service desk. It looked liked she just finished helping a customer. We stood right in front of the cash register, items in hand, when a store employee walked by.  We briefly made eye contact, to no avail.  The employee kept walking, not bothering to tell us that that particular register was closed, and/or pointing us to the closest operating customer service desk.  A simple acknowledgment of our presence would have made all the difference.

We then walked around until we found the service desk in the front with several people in line.  We waited in line while our kids started to fuss.  You know how young kids get in lines (heck, I get that way too).  When it was finally our turn, my wife handed over her jeans still in the original plastic shipping pouch with the invoice and all the other paper work it came with.  The cashier started punching all sorts of buttons (Why does it always take so many keystrokes for clothing store employees to ring up an order?).

She then asked my wife for her drivers license.  It seemed like a semi-reasonable request to verify her identity and help avoid return fraud, so my wife dug our her drivers license.  After some more serious key mashing, the cashier pointed to the credit card terminal and asked my wife for her Social Security Number. Wait a minute! Time out! There is no way we are giving my wife’s Social Security Number after this sales associate just took down my wife’s driver’s license info (full name, address, eye color, etc.).  The thought of this employee opening a home equity line of credit with this info flashed through my mind.

I responded that there is no way they need a Social Security number for a return. We only wanted store credit anyways so my wife could order the larger size online. The line we heard parroted to us: “it’s the store policy.”  Fine, but that doesn’t make it right. 

Another employee who approached the counter during this exchange actually tried to justify the policy by stating that she enters her social security number every time she clocks into work at Macy’s and to access her employee information via the computer terminal.  I told her that I understand that you have to supply an employer your Social Security number for tax purposes but that does not justify putting it out there for a simple transaction like a store return. She tries to even say that using the keypad is secure, which she is watching closely in addition to the actual cashier, and the keypad will protect my Social Security number from being heard or seen. (Professional con artists can watch your fingers and determine what numbers you are punching in at ATMs I’ve read.)  I totally disagreed with her and she finally backed down when I recounted how a waiter stole our credit card number a few years ago.

They finally pulled the dreaded, “I need a manager approval.”  My kids are now entering full meltdown mode and for once I decided not even to hold them back.  The other shoppers in line gave up and left. (At least maybe I hurt the store’s sales for the day after they decided to rob me of my time.)

When the manager came, she did not even speak to us.  I indicated that I wanted to complain about this dangerous and horrible policy of asking for Social Security numbers for returns.  She just shrugged and the cashier then defensively parrotted back again, “It’s the store policy.” Neither the manager nor the cashier wanted to document or hear anything about my complaint about this “corporate headquarters” policy that they could do nothing about.  The manager tapped some keys, twisted a key, and then typed some more keys.  We then finally got credit added back to our gift card.  Did this really have to be so hard?  In the end, my wife never gave up her Social Security number but we still got credit on the gift card.

It looks like Federated Department Stores has the same attitude toward customers that Home Depot (HD) has had. CEO Nardelli recently abruptly left Home Depot.  I wonder what the future holds for Federated Department Stores’ CEO Terry J. Lundgren. Federated Department Stores might be trying to build a wide moat in the mall anchor store niche, but with this kind of attitude I see them loosing customers to smaller stores if they don’t make major changes in the way they treat customers.

Federated Department Stores is now on my pass pile for both my future shopping and investing. Is Federated alone in this abysmal policy of asking for Social Security numbers for returns? I invite corporate staff from Federated Department Stores or Macy’s to use the comments section below to explain to us here how they justify the collection of Social Security numbers for store returns.

While you are here, I encourage you to look around Fat Pitch Financials. You might find my articles on personal finance to be of interest. I also think you might find what I’ve done with my son’s Coverdell Education Savings Account to be unique. Finally, if you are really into investing, I encourage you to visit my new site, Value Investing News.

Now that you know a little about me, you can better appreciate my take on this week’s Carnival of Personal Finance. I have sorted the articles by subject and I’ve noted my favorite articles. There are a lot of articles on saving money and investing this week. On that final note, here are this week’s entries to the Carnival of Personal Finance:

Book Review

Review of The Money Coach’s Guide to Your First Million at Mighty Bargain Hunter
A book worth reading according to Mighty Bargain Hunter.

Debt

“Nightmare Mortgages” — What Business Week didn’t report at The Mortgage Reports Blog
Details about Option ARM mortgages and who they may be right for.

Paying Off Old Past Due Bills Without Hurting Your Credit at Searchlight Crusade
A fancy way to pay off your old past due bills without hurting your credit. Hopefully, you won’t have to use this technique because you won’t have past due bills.

Student credit reputation at All Tips and Tricks
All I can say is that I’m glad I’m not a poor student anymore.

Employment

What is the most unusual thing you have done for money? at It’s Just Money
* Editor’s Choice *
A fun article on the unusual things people do to earn money.

ALERT! Open Enrollment Time! at Mapgirl’s Fiscal Challenge
It’s time to start your planning for next year’s benefits. Do you have a budget? Do you know where you have room to save on taxes and maximize your company’s benefits plan for healthcare, dependent care, and retirement? I need to start working on this. Thanks for the reminder mapgirl.

And the Survey Says… at InsureBlog
What’s YOUR favorite “bennie?” InsureBlog’s Henry Stern reports that vacations and paid holidays top the list (dunh!), but you might be surprised at some of the others that made the Top 10.

Do What You Love and the Money Will Follow at My Financial Awareness
Why does the cliche do what you love and the money will follow work so well? Ah, but having money can often make doing what you love more enjoyable. My advice: Save what you truly love to do as a hobby, because work will always be work.

Introduction to COBRA at Understand COBRA
It looks like there is a new blog out about COBRA, a very important post employment benefit to learn about.

Picking money over time – Are we working too much? at Money and Values
Some thought and tips on how to take back your time.

Starting a business not as risky as thought? at Adventure Money
The statistics for business failure rates are a bit over inflated. Starting a business may be a viable alternative to employment for some.

The Underpaid Middle Class at Manage Your Dollars
Middle class America is feeling the squeeze while corporations are posting record profits. What’s going on here? Maybe we just need to invest in these corporations are recoup some of the squeeze.

General

How Much Would You Spend Without Asking Your Spouse? at Free Money Finance
Now that is a dangerous question.

Humor

Four Simple Steps to Becoming a Billionaire at Long or Short Capital
Tongue in cheek about becoming a billionaire. I had a little chuckle with this one.

Junk Mail Humor Better Than Comedy Central at Wisdom from Wenchypoo’s Mental Wastebasket
Junk mail can be so entertaining, especially when it tries to sell you on financial products.

Insurance

Disability Insurance at Canadian Financial Stuff
The importance of disability insurance to protect your family.

Investigate Gaps In Your Homeowner’s Insurance at Home Insurance Guide
A good reminder to make sure you have proper coverage on your home.

Never A Dull Moment at Getting Out of Debt
A story about the impacts of hitting a deer with your car. The lessons learned from this incident are shared by the blogger and well worth reading.

Investing

How to Calculate Tax-Equivalent Yield at AllFinancialMatters
* Editor’s Choice *
A good post on how to determine if a tax free investment is as good as a taxable bond investment.

How to use XIRR in Excel to calculate annualized returns at Experiments in Finance
* Editor’s Choice *
A great post about using the XIRR function in Excel to calculate annualized returns when you put in money to invest regularly instead of the simple situation where you put something in at the beginning of one period and that’s it.

Index Fund Valuation Matrix at The Real Returns
* Editor’s Choice *
A smart attempt to look at comparing the various P/E values of various index funds. I need to get this data for my own research.

25 Rules to Grow Rich By at Dividend Guy Blog
Highlights and comments on 6 of the 25 rules regarding investing.

6 Financial Cliches That Will Make You Rich at The Digerati Life
Even though these are cliches, some of them have value.

A Quiz: Can you ‘Take Control’ Over Your Investments? at Taking Control Over Money
A reprint of a quiz from Vanguard Investment Services.

Are Timeshares A Scam? at Adventures in Money Making
Timeshares are a service to be used; they are not (normally) an investment. End of story.

How To Turn $100,000 into $98,361 in Six Years! at My Money Path
Sort term profits don’t always lead to success in investing.

Ideological Bear at My 1st Million At 33
Taking an unpopular bearish stand in this market, but one I too share.

Investing In Companies – Stocks or Options? at MillionDollarCountDown
A nice simple overview of the options you have when investing in a public company. The post doesn’t also mention the potential of also investing in a company’s debt.

PFCollege: Try Paper Investing at Blueprint for Financial Prosperity
Jim recommends trying your hand in investing by starting a paper port. Good advice, but it is hard to take stock investing seriously until you have some money on the line.

Southern Peru Copper (PCU) at Dividend Money
A look at Southern Peru Copper’s whopper of a dividend.

Stock sell rules at Investing Guide
It looks like the author of this post is coming to the conclusion that selling overvalued companies is the way to go. I agree!

Withdrawing Funds From Upromise at fivecentnickel.com
I’m a user a Upromise so I found this post about withdrawing funds without investing in a 529 rather interesting.

Other

Ten Money Questions for Abigail Garner at Queercents
“For several years, Abigail Garner has been at the forefront of the Queerspawn movement. Queerspawn means that you are an adult child of one or more LGBT parent(s). Abigail is the author of Families Like Mine: Children of Gay Parents Tell It Like It Is. She provided Queercents with poignant views on family finances, the challenges of owning a small business and trying to fuse the label “rich and famous” with reality.”

Personal Development

Napoleon Hill’s Law of Success Podcast Series #02/16 – A Definite Chief Aim at Cultivate Greatness
Part of a podcast Series covering Napoleon Hill’s Law of Success

The Secret of Highly Productive People at My Bubble Life
A few tips on staying productive.

Planning

Are you being “managed” out of your money? at Enough Wealth
Fees, especially hidden ones, can really cut into your investment earnings, so focus on keeping them low. Apparently financial fees are not just a problem in the U.S., Australia appears to be gaining on us in this category. I hope they discover fee-only planners.

How Do Independent Couples Divide Up Expenses? at Lazy Man and Money
A look at how couples split their expenses. Surprisingly, I’ve never spent much time on this issue. It seems to come naturally for me and my wife even before we married.

Inflation: Your Portfolio’s Worst Nightmare at Smart Money Daily
I too fear inflation but I don’t overlook it.

Planning on the Cost of Our Baby at Amateur Investor
Oh man, I don’t need another reminder as too how expensive kids are. However, now that I have no life, I’m saving a lot in entertainment costs.

Teaching Kids the Value of a Dollar at raising4boys.com
This is a topic I need to start working on with my son.

The Power of a Good Graph at We’re In Debt
An article about the motivational power of a financial graph. Just be careful that you don’t lie to yourself with statistics.

Using a Financial Advisor at My Wealth Builder
A bloggers relationship with their financial planner.

When Should I Collect Social Security? at My Retirement Blog
A good question to ask when your planning your retirement. (What’s up with the colors on this site?)

Real Estate

The Real Return on My Rental Property at 2million
* Editor’s Choice *
A good breakdown of one real estate investor’s rental returns.

Build Your Wealth in Real Estate #2 at eFIPO
It’s hard to believe the interest in investing in real estate is still so strong, at least by bloggers (maybe they are real estate agents). This article covers flipping, renting and lease to own options. I’ll pass unless your selling at half off.

How Freakonomics Killed The Deal at The Mortgage Reports
“An extra $5,000 on a sales contract only earns $350 extra to the Realtor
- incentives are not aligned and this was exposed in Freakonomics. In a rising
market, the seller is the loser. Same phenomenon in a flat or declining market,
however, and the Realtor may be saving the day (and the deal).”

Spotlight on Cape Verde at Renthusiast
International real estate investing is very tricky. Make sure you really understand local laws and have a trusted local representative, especially investing outside of developed countries. This article is way outside my circle of competence.

Three Mistakes That Can Cost You Thousands When You Sell Your Home at Debt Free
Tips for avoiding money loosing mistakes when selling real estate. My tip: Avoid selling in the current market.

Retirement

Do Worry About Retirement But Beware Of Overkill at Money, Matter, and More Musings
I’m not sure I agree with this one. A good does of healthy worrying is needed to prevent a disaster of a retirement. I see too many worrying too little.

Saving

Eating Breakfast to Save Money? at The Simple Dollar
* Editor’s Choice *
I like eating breakfast and I like saving money even more. This article is a winner worth reading.

6 (Worthless) Excuses for Not Saving Money at Single Ma’s Fabulous Financials
A bloggers take on a recent Bankrate.com article on excused used for not saving.

6 excuses why people don’t save money at The FRAUDFiles Blog
A summary of a Bankrate.com article on excuses why people don’t save money.

Are you missing some money? at Don’t Mess With Taxes
“You don’t have to go digging under couch cushions to find unexpected
cash. You state treasury may have some money for you that you simply forgot about.”

Car sharing services save you money and make you money! at The Good Human
I like car sharing services but they won’t make you money unless you invest in one of these companies or start your own and even then I’m not so sure.

Costco Doesn’t Save Me Money at Getting To Enough
How is it that a favorite store of frugal shoppers doesn’t save shoppers money in the end? I knew Charlie Munger was too smart to be involved in a money loosing business. Also, check out the percentage of profit at Costco made up of the annual fees reported in the company’s annual report.

Getting Off The Dime at Ask Uncle Bill
A smart daughter gets ahead.

Getting the Most from a Savings Account at How Do People Get Rich?
Can’t argue with moving to a high interest online savings account. However, this article misses several good online bank options, but commentors have already filled in the blanks.

Hide Money From Yourself at Binary Dollar!
Saving money by hiding it in separate accounts.

Reports – Summer Wonders Of The Free Money Forest at FIREFinance
A creative post on credit card and bank account signup bonuses.

Saving More on Your Christmas Shopping at Mom Advice
A discussion about using Ebates for holiday shopping.

Ways I Save Money: The 90-Day Ruleat Blogging Away Debt
Some tips to curb impulse spending.

That concludes this week’s Carnival of Personal Finance. You can learn how to submit articles or even host a future Carnival by visiting the Carnival of Personal Finance’s website. Next week’s Carnival of Personal Finance will be hosted by It’s Just Money.

I’m dedicating all my Amazon.com sales to my daughter’s Diaper Fund.  To help me earn enough to keep the Diaper Fund cash flow positive, I’ve opened up the Fat Pitch Financials Store. I encourage you to browse my selection of top value investing books and other items investors might need and enjoy.

If I manage to generate enough revenue for the Diaper Fund to keep my daughter in diapers until she is potty trained, I’ll put the remainder into her college fund. To help kickstart her college fund, I’ve enrolled her into upromise.com.

Upromise is a rewards program that earns your child college money when you buy selected products using your grocery cards, shop online through the upromise.com website, use the Citi Bank Upromise credit card, or dine at one of the participating restaurants.

You can open up a 529 college savings plan through Upromise to help the rewards you earn grow. I found their New York State plan to be fairly low cost with its use of Vanguard Funds. I encourage you to sign up for upromise.com if you have young children or if you want to help someone in your family save for college. Heck, if neither situation applies to you, feel free to contact me and I’ll add you to my daughter’s friends and family list at Upromise.

Waiting definitely paid off. My account upgrade went smoothly with no performance delays. The directions were clear and easy. The biggest change was coming up with the five security questions that accounts now need.

I really like the new site. There appear to be several new features and now it also looks like you can add more accounts to connect to the EmigrantDirect American Dream Savings Account. However, the best new feature is the new 5.15% APY savings rate. This is one of the best deals around right now for cash. The only shame is that I’ll likely be moving some of my cash out soon to be used to purchase any new fat pitch stock opportunities that present themselves.

On the 4th of July, Emigrant Direct announced that they have raised their American Dream Savings Account rate to 5.00% APY. Emigrant Direct’s rates are now competitive with even HSBC, which had recently taken the savings account rate leadership position.

Just two weeks ago, one of my readers, Patrick, noted that HSBC had raised their savings rates to 5.05 percent, which exceeded Emigrant Direct’s 4.8 percent rate at that time. I thought Emigrant Direct’s savings rate might have started to slip in this highly competitive online savings account environment. However, now that Emigrant Direct’s 5.0 percent savings account rate is in place, I feel that Emigrant Direct still maintains a top FDIC insured savings account rate. It will be interesting to see how other banks react.

I have been very happy with EmigrantDirect.com. They have kept their savings account rates competitive with the highest rates being offered in the market. There are no fees and no minimum account balances. I also like the fact that I can do everything I need with this account online. Emigrant Direct is even in the process of improving their website. It looks very likely that I will be maintain my savings account here for quite some time.

“Did you know that there are comic books that are completely focused on money and wealth management issues, published by the Federal Reserve?”

I didn’t until I recently read this line in Stuart E. Lucas’ recent book, Wealth : Grow It, Protect It, Spend It, and Share It. Since I have one kid in my household and one on the way, I was interested to see what these comic books were like.

After a quick search, I discovered the financial comic books on the Federal Reserve Bank of New York’s website. Twelve comic books were listed but two of them are not currently available. The currently available titles include the following:

• The Story of Inflation
• The Story of Monetary Policy
• The Story of the Federal Reserve System
• The Story of Checks and Electronic Payments
• The Story of Banks
• The Story of Money
• Once Upon a Dime
• The Story of Foreign Trade and Exchange
• A Penny Saved…
• Wishes & Rainbows

I put in an order for these free comics. None of the titles look particularly exciting but I’m curious as to what they contain. I’m sure my office coworkers will get a kick out of them at the very least.

While I was looking for the comics, I also discovered that the Federal Reserve has and an educational site appropriately called Federal Reserve Education. My macroeconomic skills are pretty rusty so I might spend a bit of time browsing through this site. Since I’m primarily a bottom-up stock researcher, I rarely spend much time on macroeconomic issues besides the basics of interest rates and inflation.

It looks like Emigrant Direct is working hard to maintain its superior savings account rate. They also recently introduced CDs as well. I’ve been happy with the service Emigrant Direct has provided for me.

I encourage you to making sure your cash is working as hard as it can, even your emergency funds. Emigrant Direct might be a good choice for you to consider.

Have a great Memorial Day weekend!