Archive for December, 2008

Welcome back Franco fan! Please share your thoughts and leave some comments!

“Let me put it on my card…I need the miles.”     ~ Mileage Monkey 

This is just one of the many wonderful phrases you may hear from a devout mileage credit card holder. What is it about airline miles that these mileage monkeys love so much? Perhaps it was the fact that once upon a time they could be used as a flexible, free way to book airline tickets. Unfortunately, those days are gone and airline miles today are a shadow of their former glory. They have been greatly devalued, lack flexibility, and only cover a portion of the flight cost. I’m writing this post to put a stop to all the madness and tell everyone to drop their mileage credit cards.

In the first part of this two part series, we covered the different types of home loans and the role of a mortgage broker in the “no cost refinance.” Now let’s look at what information we need in order to maximize our savings. As previously discussed, the no cost refinance uses a lender credit to cover the cost to close a refinanced home loan. The lender credit is generated when the mortgage broker sells you a loan at a rate that is higher than the current market rate. This is known as the yield spread premium (YSP). The key to having the YSP work in your favor (cover closing costs) as apposed to lining your mortgage broker’s pocket is being well informed on the market wholesale rate and the YSP compensation.

I realize that taxes are a “necessary evil” that are needed to keep the fabric of society in tact, but then again, absolute power (or put another way…extorbitantly high taxes) in the hands of the government is sure to corrupt absolutely. For those that share my point of view, you might find this story to be particuarily amusing.

Wishing everyone a merry Christmas!
Franco

The worst part of refinancing (other than the headache) is paying all those closing costs. With so many hands in the cookie jar, the fees just keep piling up. And some of them are just plain stupid…I mean, why do I need title insurance for a refinance on a home financed in my name? If you have ever gone through the refinancing process, you know it can be quite a hassle. Unfortunately, there is nothing I can do about the refinancing process being a royal pain in the rear, but what I can help you with is the cost of refinancing. There is a way to refinance your home without having to pay any additional out of pocket expenses AND without raising your principal balance.

One of my favorite author/portfolio manager, Vitaliy Katsenelson, just wrote an article called Investing Books for the Stockings. In it he gives a list of his favorite investment books, a brief description of each book, and a case for why you should read it. Some of the books I’ve already read (and recommend on the Favorites tab) while others I have yet to read. I know I’ll be adding a couple of his suggestions to my reading list.

Enjoy!
Franco

I would like to introduce a new friend of mine and guest writer to Frugal Franco who goes by Macro Marco. As his name suggests, he is all about macro economics and has written the following article to explain the role credit rating agencies play in the market.

Franco

Many investors are feeling the pain of being left with close to nothing after putting their money in previously believed to be “safe” investments. They feel betrayed, lied to, and cheated. After all, they were told by the credit rating agencies (CRA) that their investment was of the highest grade possible with only an infinitesimally small chance of ever losing money. So what went wrong? Are the CRAs broken?

The Bargain Burro’s The Diary of a Mad Black Fridayee was selected as one of the editor’s picks in this week’s Carnival of Personal Finance being hosted by The Frugal Duchess. Check out the carnival for a wide variety of personal finance blogs and articles.

Enjoy!
Franco

A billion people in the world live on less than a dollar a day for food. Two social justice teachers recently set out on a journey to find out if they could do the same here in the US. What started out as “just a challenge” has now made international news and is bringing awareness to people on how little so many have for sustenance. They were recently interviewed on Fox News and are blogging about their journey at onedollardietproject.wordpress.com.

Franco

Money and manure … two things most people don’t associate with each other, but the perfect segway into the third part of the Frugal Franco formula (Save + Invest + Give Back … I guess to be a formula it has to equal something, so I would say it equals Fulfillment). Given the time of year, I felt it would be apropos to break out the inaugural “give back” post as many people are in the giving spirit during the holidays.