BitCoin Bubble

Bitcoin Price Chart
Source: Bitcoin Charts, April 5, 2013

I learned to recognize bubbles from William Bernstein’s short history of bubbles in the The Four Pillars of Investing…  here are a few, along with some more I found on Wikipedia…

  1.  Tulip Craze
  2.  South Sea Company
  3.  Mississippi Company
  4.  Railway Mania
  5.  Florida Land Boom
  6.  Stock Market Bubble
  7.  Poseidon Mining Bubble
  8.  Japanese Bubble
  9.  Asian Bubble
  10.  Dot-Com Bubble
  11.  Uranium Bubble
  12.  U.S. Housing Bubble
    2013.  BitCoin Bubble?

I like the idea of the Bitcoin currency, and it certainly does have an advantage that nobody can just print it so normally it should hold it’s value because it should maintain it’s rarity.  People are looking for alternatives to their local currency.  People are afraid because of situations like Cyprus where your money is confiscated, or the United States where your government is so far into debt you don’t see an outcome where devaluing of the dollar doesn’t occur.  So people start buying Bitcoins, which drives the price up (supply and demand), and now everyone is seeing the value of Bitcoins rise so it becomes a speculative investment just like Tulips or Real Estate.   Bitcoins will go much higher in value than they’re worth and at some point when someone realizes they’re not worth that much everyone will try to get out.  Bitcoins may go up to $200 then crash or may go up to $1,000 or higher then crash.  But, with near certainty at some point in the future it will come crashing down in value overnight.  Of course, I could be wrong.

Bank Comparison

Alliant CU Logo
Ally Bank Logo
ING Direct Logo
Fidelity Logo
Charles Schwab Logo

With all the big banks charging fees I’m amazed that people don’t switch over to cheaper online banks.  Two great places to find banking services with low fees are credit unions and discount brokerages.  Here’s a Comparison of Bank Features (Google Docs) I wrote up comparing Alliant CU, Ally, Fidelity, Schwab, and ING Direct.

The highlights from each bank:

Alliant Credit Union

  • Best credit union for ACH transfers and instant fund availability.
  • Consistently competitive interest rates.
  • Highest mobile deposit limit ($20,000).  Most banks have a $10,000 limit.
  • Check deposits are available for withdrawal instantly (literally within seconds).
  • ACH transfers initiated by Alliant to/from external accounts clear next day.
Ally Bank
  • Best for the high interest yield chaser (who knows how long it will last).
  • If you’re mad about not getting anything back from all the TARP money you paid with your tax dollars, or you’re the type who would buy a car from government owned GM today then this is your bank.  See your TARP money at work.
  • Only bank with online chat customer services.
  • Only bank with a high yield money market account (money market accounts are like savings accounts but have check writing capabilities).
Charles Schwab
  • Best bank for international ATM use.
  • Only bank that reimburses ATM fees at any bank worldwide and also charges 0% foreign conversion fee.
  • Unlimited postage paid envelopes for mailing in checks, if you’re the type who doesn’t like mobile deposit.
  • Best bank for large deposits
  • Deposits up to 1.5M are FDIC insured.  Funds over $250,000 are automatically swept into separate banks.
  • Fidelity is probably the best one stop shop (banking, brokerage, cash back credit card at the same institution).  It may not be the best at everything, but it provides everything and certainly isn’t the worst.
  • Dual checking/brokerage account allowing you to make trades directly in your checking account.
ING Direct
  • Best bank for security.
  • PIN entry minimizes risk of keyboard sniffers.
  • Can create read only account for Quicken and Yodlee (e.g. to download transactions.

2003 Honda-CRV cost of ownership (June 21 2011 to June 1, 2012)

(bought used)

Honda CRV
Starting miles: 77810
Ending miles: 94106
Honda Costs

Because we drive less and don’t get typical discounts of having two cars (e.g. multi-car discount on insurance) our cost per mile went up, but total costs are lower.  This is largely because driving fewer miles causes fixed expenses (insurance) to weigh in more heavily against operating expenses (fuel).  In 2011 (remember I realize this at the half year so 2011 is roughly June 2010-June-2011) we had two vehicles, drove 9,532 miles and incurred $4,262 in expenses.  In 2012 we had one vehicle, drove 3,437 miles and incurred $2,863 in expenses.


Auto service varies wildly from year to year.  2010 was an unexpected A/C replacement and 2012 was 90k maintenance.  I suspect we’ll be buying new tires soon so maintenance will continue to remain high.

Insurance is about the same despite going from two cars to one car when I would have expected it to go up (in 2010 and 2011 we had two cars so I allocated 50% to the Honda).  I suspect it’s because rates are lower in Idaho.

Depreciation was sort of odd in 2011 as the car actually appreciated in value, I suspect that was a one-off adjustment in price due to gas prices or inflation or something so I expect it to remain around 400-500/year.

DMV registration is a lot cheaper in Idaho, about $30/year.  We also haven’t had to smog our vehicle which saves time and money (and also is better for the environment since you’re not driving needlessly).

Odo on Material Wealth

Odo from Star Trek

I’ll never understand this obsession with accumulating material wealth.  You spend your entire life plotting and scheming to acquire more and more possessions until your living areas are bursting with useless junk.  Then you die.  Your relatives sell everything and start the cycle all over again.

— Odo, Star Trek: Deep Space Nine Season 1, Ep. 6.

Ben’s Android App Picks

Updated 10/30/2011

Great improvements for Financial apps this year, most decent banks and brokerages have rolled out mobile deposit allowing you to deposit checks by merely taking pictures of them.

Schwab Deposit Check
Schwab Mobile – Mobile (camera) deposits, trading, transfers.

Fidelity Investments  – Mobile (camera) deposits, billpay, trading (supports trailing stop loss trades), market news, transfers.

(Both Schwab and Fidelity have a $10,000 daily mobile deposit limit, a lot better than J.P. Morgan Chase’s $1,000 limit which makes their mobile deposit app useless).

ING DIRECT – Billpay, transfers, P2P payments.

HP 12 C
Andro12C – This is the best HP 12c emulator for Android that I’ve come across.  The HP 12c is now 30 years old, and also happens to be my favorite financial calculator.  I use it to calculate interest on loans, mortgages, investments, depreciation schedules, etc.

QuickRegister – Record cash transactions then export QIF file into Quicken.

This has been a good year for Bible apps, YouVersion’s Bible app continues to improve and offer more free translations.  Also we also saw the introduction of Logos Bible Software, which links your commentaries and books with scripture references.

Logos Bible Study App
Logos Bible Software – The best Bible Study app.  It can do word studies, translation comparisons, but where it really shines is if you own one of the Logos Base Packages it will synchronize with your library so you have access to any commentary, hymnal, book that you own are licensed to access, and can run a Passage Guide which will pull up every commentary entry related to that passage.  Logos did a good job.

Bible (YouVersion) – Best free Bible reading app.  It can read to you, most popular Bible translations are free (including  NIV, ESV, NLT, NKJV, AMP, NASB, CEV, NET, WEB, NCV, TNIV, HCSB, as well as translations in foreign languages).  For publishers that allow it the Bibles can be downloaded for offline use.  I’m not interested in the social stuff so I haven’t tried it but it also does social interaction during a service (I guess you can comment and ask questions to other people with the app at the same event) with YouVersion Live, and also has hooks into Facebook, and Twitter.

Kindle (Amazon) – Can’t go wrong with Amazon’s Kindle App.  Free classics (G.K. Chesterton, Lewis Carroll, etc.)

Most weather apps could still use some improvements, typically what people want to know is what it’s going to do and when… and most require too many taps to get there.  One weather app did it right… but what I’d still like to see is what will today be compared to yesterday so I’d know to prepare for a warmer or colder day.

AIX Weather Widget

Aix Weather Widget – Quick weather view of the next 24 hours.

Business Calendar – ($4.99, I got it for free from the Amazon App Store) – Much better than the stock calendar, especially since the month view can show text entries instead of colored blocks.


Handy Calc
HandyCalc – The most powerful calculator.  Graphic calculater, currency converter, unit of measure conversions, fraction calculations, formula solving.

Google Voice – Transcribes your voicemail, intercepts dialer to make outgoing calls as your Google Voice number, free text messaging.

Gmail – Native Gmail App

Flickr – Finally, a flickr app!


Evernote -Note taking app (syncs with Evernote on your computer).

Amazon MP3 – Stream music from your Amazon library.

Pandora – Calm Eli down with music.

Amazon Store – Scan barcodes to see if Amazon beats the price (they usually do).

Amazon App Store – One fee paid app per day.  Some are even good.


Drudge Report
Drudge Report – Can’t do wrong with Matt Drudge..

The Wal Stree Journal Mobile – Read stuff that doesn’t make the socialist news.

Call Accounting Lite – Export phone calls logs to CSV (great for tracking how much time you spend on the phone with clients).

Other apps

Parcels – Track packages from just about any carrier.

Google Maps – Turn by turn GPS Navigation

My Tracks – Track your walks and bike rides using your GPS.  Shows you statistics like your average moving speed and elevation change.

Technology Geek Apps

Wifi Analyzer
Wifi Analyzer – Find out what W-Fi channels will get the least interference.

APG – PGP encryption for Android

KeePassDroid – Implementation of KeePass for the Android

Tasker ($6.49) – What is there that this app can’t do?  I use it mostly for location based actions.  Walk into church and my phone goes to silent mode, if I have a meeting scheduled at work phone goes to vibrate during that meeting.

CSipSimple – The best SIP client for the Android.  It’s sort of like Skype in that you can make phone calls over the internet but unlike Skype, you’re not locked into any particular provider (like email).  It’s pretty useless since I’m the only one who has it.

GrooVe IP – Make VoIP to POTS through Google Voice/Chat for free.


New Credit Card Strategy

Sadly, my favorite credit card, the Schwab 2% Cash Back (and no foreign transaction fees) is being discontinued.  I loved being able to get a straight 2% back on everything without being concerned about which card I was using… so time to re-consider our credit card strategy.

We already have the Costco Amex and Amazon Visa (we buy a lot of stuff from Amazon) which give us cash back in the following categories:

Costco Amex

Costco Amex

3% gas
2% restaurants
2% travel
1% all else
Amazon Visa

Amazon Visa

2% gas (if no amex)
2% restaurants
2% drug stores
2% office supply stores
1% all else

I was thinking about getting this card since groceries is one of our highest budget lines (even after considering the groceries purchased at Amazon):

Amex Blue Cash

Amex Blue Cash

6% Supermarkets
3% gas
3% department stores
1% all else

To see if the above three cards can beat my previous 2% back strategy I ran a PivotTable against my Quicken credit card data to get spending by payee then added what I guessed the merchant would be categorized as.  Here are the results:

6/1/2011 to 10/18/2011 (since we moved to Idaho and had a bit of time to settle in until now).

Spending Analysis
“Row Labels” should be “% Cash Back” and
“Sum of Weight” should be “% weighted
average of spending”

So looking at the data to the left you can see using those three cards we would do quite well.  16% of our spending would get 6% cash back, 24% would get 3% cash back and so on.

Using the cards strategically we would get a weighted average of 2.45% back.  That beats out 2% by a fair margin.

Now the “Other” 1% is a large chunk, lets see what we can do about it…

The two good 2% on everything cards left on the market are the Fidelity Amex (2% into your Fidelity account), and the Capital One Venture card.  If I turned that last 43% into 2% cash back we would get a weighted average return of 2.89%.  Not bad.

One thing I’m not sure of, is how accurate American Express’ categorization is…  I had the Chase Freedom Visa which was supposed to give us 3% in the top 6 categories but since they didn’t categorize all the stores we only got back 1.32% which prompted me to use the Charles Schwab card.  But I’m going to see if American Express does any better (so far our main Supermarket is classified as a Grocery store, our local Wal-Mart is not, but that’s to be expected).  If it turns out we really do beat 2% I’ll stay with that strategy, otherwise we’ll go back to a flat 2% back card.

Nerdwallet is a great site to find the best rewards you can get based on the type of spending you do.

(sorry about the paragraph spacing being off, Google updated their blog editor and it doesn’t obey line breaks the way I’m used to…)

Asset Review: Good Year for Cars

Time for our half-year asset review:

Compared to June 2010 the KBB value on the 2003 Honda-CRV rose from $11,200 to $11,555.  The 2007 Mazda 3 value went up from $13,520 to $13,990 with a total value increase of $825.  This hardly offsets what our house did to our net worth but that’s another story.

Oddly, both vehicles appreciated in value despite adding miles and age.  I have two ideas why:

  1. Gas prices are higher than last year so vehicles which get decent mileage are in high demand.
  2. The value of the dollar has actually decreased.

I’m not an economist so I don’t know, but regardless, the last 12 months have been a good year to hold assets in vehicles and not dollars.  Anyway, now for the fun stuff:

Note: My asset review fiscal year starts in May or June (I roll the year whenever I feel like reviewing and realizing the assets so some years can be shorter than others).  The Year 2008 refers to June-2008 through May 2009, The Year 2009 refers to June 2009-May-2010 and so on.

2007 Mazda3 Costs

2007 Mazda3

2007 Mazda3 cost of ownership (May 23, 2007 to June 15, 2011)

(bought new)

Asset Review Year2008200920102011TotalMean
Interest Expense727691347681833458
New car tax1274nilnilnil1274318
DMV Registration362171217199949237
Documentation Fee55nilnilnil5513
Jury Duty parking ticket14nilnilnil143
Total Costs6851512738332363181744543
Miles Driven1861910090783169604350010875
Cost per mile0.370.510.490.340.430.43
I sold the Mazda3 since we don’t need two cars now that I walk to work, and if we did we would rather have an AWD anyway.  I’ve closed the books on it.  Total cost of ownership was $18174.  $378/month or $0.43/mile.  I will miss that car, but I’m happy it has a good owner (the new owner has been driving his previous car since long before I was born and finally decided it was time to replace it).

I booked the difference in KBB value and selling price to service since the tires were getting close to being needed to be replaced so that’s why the service is very high.  I probably should have booked that to depreciation, but I’m not regulated so I do accounting my way.

2003 Honda-CRV cost of ownership (June 8 2009 to June 20, 2011)

(bought used)
Honda CRV
Starting miles: 77810
Ending miles: 90669
Asset Review Year20102011TotalMean








DMV Registration


Total Costs
Miles Driven


Cost per mile
So glad we got out of California just in time to not have to pay the DMV registration again.  The $490 last year was because the DMV didn’t send us the invoice.  We were unable to pay online because you can’t pay without knowing a code that’s on the invoice.  We were honest and told them they needed to bill us.  The DMV apologized for not sending the invoice and being grateful for our honesty gave us a discount for our trouble was late seeing us for our appointment and slapped us with hundreds of dollars in extra fees and fines for not paying a bill that we couldn’t pay because they wouldn’t let us pay without the code that’s on the invoice that we didn’t get; then made us go smog the vehicle but wouldn’t extend a temporary registration for more than two days even though it was a three day weekend and all the smog shops were closed.

Insurance is allocated 50% to each car.


As of April 13, 2011

United States debt: $14,279,000,000,000.00
United States Population: 310,383,000
Debt per U.S. Resident: $46,000.00

California Debt: $368,502,000,000.00
California Population: 37,555,000
Debt per C.A. Resident: $9812.00

So, our family of three owes: $167,000.00

We don’t make that kind of money so the government will have to wait until Eli makes enough money to pay it off.

If I may propose a modest petition on the next California ballot:
All candidates, including positions for the legislature, assembly, senate, governor, controller, etc. must have a positive net worth to be considered for placement on the ballot.  The purpose of this law is to discourage candidates who cannot manage their own finances from running for public office under the pretense that they are capable of managing public finances. 

Complaining About Gas Prices?

Here’s how to be happy when gas prices go up by hedging your fuel expense:

  • Set a reasonably high gas budget, perhaps 25% higher than your average monthly expense.
  • Whatever is left in your gas budget at the end of the month, move to your brokerage account.  
  • When you have enough money (say $1000) buy stock in an oil company (find out which oil company supplies your most often visited gas station, but the next time buy a different company and so on).
  • If you go over your fuel budget just transfer the dividends you’re making back to your checking account to cover you on the months when fuel prices are exorbitantly high.  If you don’t have enough cash from dividends, then if necessary sell off some of your oil stock.
Now that you own part of an oil company, you won’t complain about the “evil” oil corporations raising rates. You now partly own that oil corporation–and you’re getting dividends.
Hope that helps.