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Financial Strength Through Unity

By Frugaling 9 Comments

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Union Strikers
Photo: Kheel Center/Flickr

We get paid to go to school?!

I had this misconception about graduate school. See, I thought that when I worked for the university, added to the research landscape, and taught undergraduate courses, my own tuition and student fees would be paid. Even when I entered the University of Iowa for graduate school, I didn’t completely understand the financial obligations that are placed on students.

My first year as an instructor and employee of the university, I was quarter-time. That meant I would get 25% of a salaried employee (just over $10,000 per year). Additionally, because of my graduate student status, I’d receive a “tuition waiver.” This benefit sealed the deal and made graduate school sort of “affordable.”

Across the graduate colleges at the university, the majority of students received a 100% tuition waiver. Inexplicably, my college didn’t receive that benefit. That meant that around $2,000 per year of my tuition would come from the “paychecks.” To make matters worse, student fees cost about $2,400 per year.

If you’re doing the math with me, that means that I was getting paid in my first year of being a graduate student: about $10,000 minus $2,000 for tuition and $2,400 for student fees. It equaled roughly $5,600. Now, that quarter-time salary was decimated. Money for rent, food, and regular budgetary expenses disappeared. I had to take out loans to live.

Aren’t we trying to “better” ourselves?

As the years passed, I was afforded more opportunities and a semi-living wage. I was able to pay off my debt with my side income and stay away from student loans through a better “paycheck.” But the tuition waiver gap and student fees meant that I still paid much of it back to the school.

Those pursuing higher educations and degrees for more competitive employment should be commended. Unfortunately, our society and system doesn’t necessarily allow for all those to succeed.

Considering the cost of a graduate degree and the years of minimized/lost wages, it is an expensive proposition. Inherently, that means that only a select class of privileged individuals are more able to pursue this education. The consequences of pursuing a graduate degree without funding and few assets can be horrific, and lead to massive student loans.

That’s why students sometimes need to collectively bargain, unionize, and ask for better treatment.

Hope for a more respectful future

Last week, the union for graduate students at the University of Iowa accomplished something amazing. After months of consternation, threats to the tuition waivers, and proposed student fee increases from higher ups, the union demanded respect. They wouldn’t budge.

They asked for a 100% student fee waiver. While they didn’t receive that, the bargain was a 25% student fee cut for those on assistantships (working for the university).

They asked for a real 100% tuition waiver for all graduate students across the colleges. And they received that! Now, certain colleges within the university system that charged more tuition will be equalized.

Additionally, the union lobbied to provide better health coverage for transgender individuals, single-parent households, and much more. It was a moment of hope — of acceptance for diverse populations and classes.

And just like that, I received a nearly $3,000 raise! Without the union, I would still be bitterly explaining — to everyone who’ll listen — that my $22,000 ($18,000 after taxes) salary doesn’t actually equal what I take home.

The importance of collective goals

Unions have been villainized recently. Take Governor Tim Pawlenty of Minnesota, who said, “In many cases, [unions] exploit and abuse the taxpayers.” These disparaging remarks undercut the importance of unions for actors, on-air talent, auto-workers, politicians, teachers, students, professors, and countless others.

Historically, collective bargaining and unionization helped employee wages, voting rights, and improved safety in some of the most dangerous industries. Businesses weren’t interested in helping workers, and they didn’t have incentives to change.

When workers came together, worked towards similar goals, and collectivized, employers listened. If history repeats itself, then we ought to reflect on this lesson. Change and respect for students and others across the world will come from the bottom-up — not the top-down.

Filed Under: Make Money Tagged With: college, employees, graduate school, higher education, Salary, Students, taxes, unions, university

Get a 10% Tax Refund Bonus with TurboTax 2014

By Frugaling Leave a Comment

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Intuit Turbotax Deluxe Federal State Refund Return Program

Tax season is nearly here! Over the last few months I’ve worked tirelessly to reduce my tax liability. One method I’ll use to receive an even larger bonus will be Amazon.com’s partnership with TurboTax. TurboTax is the leading tax preparation software and offers some of the best features for receiving your largest deduction ever. But for every dollar of my refund I put towards an Amazon gift card, I’ll get an extra 10% from Amazon!

For instance, if you receive a $1500 tax refund and download TurboTax from Amazon.com, you’ll be able to put up to $500 to a gift card with the 10% bonus! That can quickly give you an extra $50 for doing your taxes. By receiving the $50 Amazon.com tax refund bonus, you can effectively pay for the cost of TurboTax Deluxe 2014. And heck, Amazon can sometimes help us stay frugal!

What I like about TurboTax:

  • TurboTax is an Intuit product (they own Mint.com, too)
  • It automatically calculates deductions and checks to make sure I’m getting the largest refund possible
  • The company works with collegiate expenses and student loan payments to save even more money
  • Each year’s refund and return is collected for the next year, which saves a ton of preparation time
  • The program includes state and federal e-files for rapid returns and paperless refunds
  • By downloading from Amazon.com, it includes 5 free federal tax return files
  • Using TurboTax is a terrific preventor of getting audited, as it checks to make sure you’ve included everything
  • Instant download for Macs and PCs

Follow this link to get this year’s version: TurboTax Deluxe Fed, Efile and State 2014 with Refund Bonus Offer

Filed Under: Make Money Tagged With: Amazon, Amazon.com, Bonus, Gift Card, Mint, Student Loans, tax, taxation, taxes, Turbotax

Looking Back At 2014

By Frugaling 5 Comments

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Fireworks photo by Scott Cresswell
Photo: Scott Cresswell/Flickr

This holiday I had the fortunate opportunity to celebrate Christmas with my family and New Year’s Eve with lots of old friends. I couldn’t have asked for a better few days. And now, with 2015 upon us, I wanted to take a quick look at the triumphs and highlights of 2014.

More visitors and pageviews

It was an incredible year for website traffic and visitors. There were over 330,000 visitors and nearly 500,000 pageviews. Incredibly, one of my articles went viral. I never really knew what that meant until I saw over 1,000 visitors on my site at one time. Frugaling became so busy that I couldn’t edit, visit, or change the site!

When I first started the website I questioned whether anyone would read it. And if anybody did, I wondered whether it would just be my mom and dad. In my first year, I constantly thought about my audience and building a following. In 2014, I shifted this priority to publishing regularly and meeting a certain journalistic standard.

It’s not that building a following isn’t important, but I realized I was concentrating in the wrong areas. The old adage of “Content is king” is true. By publishing thought-provoking articles and seeking debate, the traffic grew naturally.

More revenue, momentarily

At the beginning of the year I was making staggering amounts of money. Frankly, I wasn’t sure how to talk about it. In both January and February, I made over $5000 per month. With that kind of money, I was able to pay off my student loan debt in record time.

From the very beginning of Frugaling, I knew that I would try to make a little side income from the site. I never expected to make enough to pay off the loans. But it all came at an ethically dubious cost: hawking affiliate banking products. I never felt completely satisfied or confident in sharing about these products, as many suffer tremendously from easy credit opportunities. Credit debt can be nightmarish, and lead to the illusion of “success.”

Over time, the revenue began to fall. Affiliate companies reduced commissions until they were a small fraction of what they once were. Eventually, they pulled individual cards and requested that I constantly update marketing points. I felt tied to another job — one of updating and tidying up credit companies’ messages. The aftertaste was unsettling. Out of this discontent, I decided to pull the remaining articles about credit card companies. Maybe at some point later, I’ll revisit it, but with my debt paid off, I don’t feel desperate enough to be hawking these products.

Top articles from this year

I was repeatedly humbled by the amount and quality of visitors this year. People increasingly participated in the comments section and shared via social networking. It was a pleasure to be able to write with this audience in mind. The following are the top 5 most popular articles from Frugaling all year:

  1. Destroy The 40-Hour Workweek
  2. 5 Tricks To Save Money At Starbucks
  3. Too Poor To Protest: How Income Inequality Silences Your Voice
  4. Debt Is The Illusion Of Success
  5. 8 TED Talks That Will Inspire You To Become A Minimalist

Most popular referrers of traffic

When people start blogging and writing, they often ask me where traffic comes from. It’s both a simple and difficult question to answer, as visitors and readers come from all parts of the globe — finding your site in different ways. Sometimes word of mouth and personal recommendations lead to the most pageviews. Sometimes sites like Reddit and Facebook are best for viral sensations. The following are the top 5 referrers of traffic to Frugaling in 2014:

  1. Reddit
  2. Facebook
  3. Twitter
  4. Becoming Minimalist
  5. Hey It’s Free!

A special thanks to you, my reader!

2014 was a standout year for me. Graduate school has been challenging, but I’ve been able to keep writing articles and participating in the personal finance world. It’s been an honor to share my voice with you, and receive your support.

Thank you for making this an incredible year, and I hope you’ll follow along in 2015!

-Sam

Filed Under: Make Money Tagged With: 2014, annual review, articles of the year, Income, money, pageviews, Personal Finance, revenue, social networking, traffic, Visitors, Website

How Media Makes More Money Publishing About Fake Self-Made Millionaires, Whiz Kids

By Frugaling 7 Comments

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Whiz Kid Story in New York Magazine
New York Magazine Article on a “Whiz Kid”

At the spry young age of 15 and 16, I began trading stocks. I read Jim Cramer’s autobiography and was inspired by his love of markets. Memorizing the two, three, and four-letter tickers for major companies provided a unique joy; frankly, I’m not sure why. I loved watching CNBC and seeing the symbols dance up and down like a permanent Christmas tree of green and red.

Every now and then, a story would catch my eye. It was someone like me; passionate about the markets, but they were making boatloads of cash. They made me jealous, and I wondered how I could emulate their success.

That was until I realized most were fake, underreported, and often, downright lies. These were hardly the role models I should’ve been following. Today, I wanted to point out a few recent stories that highlighted frauds — willingly and with seriously piss-poor reporting.

The already-rich, “self-made” millionaire

Anton Ivanov was a serial entrepreneur and personal finance blogger for years. I had multiple conversations with him after starting Frugaling. To avoid anything slanderous, I’ll just say that I planned on never working with him. Something just didn’t make sense about his riches and efforts in the personal finance world.

Then, shortly before his 27th birthday a slew of stories were written about Ivanov. He even wrote an article for the occasion in one of my favorite personal finance sites, Budgets are Sexy. Yahoo Finance interviewed him to discover how he had succeeded to save, invest, and make wealth in record time.

Being a 27-year-old, self-made millionaire is a unique club that’s generally reserved for entrepreneurs and young tech whiz kids. The Internet has enabled a new generation — Millennials — to see millions and billions in record time with the sale of apps and sites.

Ivanov reported that he did it with old-fashioned hard work and dedication. Remarkable! His advice centered on a few steps: set clear and actionable goals, track net worth, save more income, avoid consumer debt, have an emergency fund, save for large expenses, and invest.

Yahoo Finance reported that Ivanov had successfully entered the workforce at a young age, started hustling at a young age, and then got into the real estate game. The article is filled with blasé quips like,

“He hopes to own at least 10 properties by the time he hits his 40s, but he’s in no rush.”

See, it’s not that his advice was fraudulent and questionable. The heart of the problem was that he wasn’t actually a “self-made” millionaire (as if anyone magically prints money themselves). Here’s what Yahoo Finance then wrote,

“Since the publication of this story on Nov. 4, new details have come to light which have made Anton Ivanov’s claims of becoming a self-made millionaire highly suspect. On Monday, Ivanov admitted to Yahoo Finance that 75-80% of his wealth consists of an inheritance that was left to him by his parents, who died several years ago.”

This kid made $72 million… From his parents

Ivanov isn’t the only fake “success story.” New York Magazine found a “whiz kid” that supposedly made millions trading stocks on his “lunch hour.” It was the ultimate viral article. With a catchy title that spoke to ridiculous riches — $72 million made from trading — and a young man looking to become a hedge fund manager.

Mo Islam was a 17-year-old kid who had already been profiled by Business Insider, as a “20 under 20.” He was going somewhere in life because of his vast wealth creation. Islam supposedly started buying penny stocks — over the counter and paper-based companies that don’t necessarily trade on the major exchanges. These stocks vary greatly and are dangerous for 99.99% of investors to even think about.

The penny stocks didn’t pan out, so Islam swiftly switched to oil and gold. That’s when New York Magazine says he struck bank account success. He quickly amassed about 8-figures of wealth.

If the story is unbelievable and astonishing, it might just be unreal and manufactured. Only a couple days later, every major media outlet was discrediting the kid and New York Magazine’s story. It was all made up, and while the “whiz kid” did have a large bank account, it is because very wealthy parents.

The media is rewarded for good, fake stories

Over and over again, false stories are reported in the media. They used to make me envious for their success. I thought, “Wow! If they can do it, why can’t I?” Well, there was an essential distinction between them and me — lots and lots of money to start. Both Ivanov and Islam started with wealth that was either inherited or given to them. The trading, saving, and investing that came afterwards didn’t essentially make them rich — it just added to their earnings.

These weren’t the mythical “self-made millionaire” and “whiz kids.” No, they were privileged with familial riches. Today I’m writing this story, not to further discredit these two people, but to highlight the severe media mismanagement and horrific reporting that was associated with both stories (and many others I don’t have time to cover).

With each story, the media outlet claimed that the individual told them that he had made boatloads of money. With each story, they reported that claim without properly vetting the source. And with each story, the media outlets made vast advertising dollars in spite of their errs. In fact, they made even more than they would’ve if they honestly vetted and reported the stories!

Ordinarily, these people are singular stories — one-hit wonders. They’re popular for a little while and then the media company moves to the next story. They make money from that one story, but here’s the genius: if they get it wrong, there’s at least two stories to come!

Here’s how you make more money as a news company by reporting fraudulent stories:

  1. Publish a poorly vetted story
  2. Make money from visitors to the “incredible” story
  3. Receive harsh critique and censure from observers of the story, which sends a surge to the original article
  4. Make more money from visitors to the “incredible,” fraudulent story
  5. Publish a story highlighting the “truth” regarding the “self-made millionaire”
  6. Make even more money from visitors to the “incredible truth” about the fraudulent story

All the while, media outlets work diligently to discredit the source, while excusing the journalist’s poor reporting. And meanwhile the mythical narrative of the “self-made millionaire” continues, stubbornly. The narrative doesn’t change, despite the blow to accuracy. Everybody wins when the narrative stays the same, right?

What do you think, can people actually be “self-made” millionaires? What’s the best way to make and build wealth? Is there actually one-size-fits-all advice that works for everyone?

Filed Under: Make Money, Social Justice Tagged With: cash, market, Millionaire, millions, money, New York Magazine, self-made, stocks, trading, whiz kid, Yahoo Finance

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