Using Credit Monitoring To Prevent Identity Theft, Is It Worth It?

Identity theft is a big concern tome so I subscribe to a service that does credit monitoring and I find it very useful. The service provides the following items as part of the credit monitoring:

1) Access anytime to my credit report for all three credit bureau
2) My credit score (FICO)
3) Email and a written letter notifying me of any changes in my credit file when they happen
4) Email and a written letter notifying me when someone checks my credit

I pay about $150 for this service per year and I do realize I overpay a little for the credit monitoring. I have used the same service for several years and have not taken the time to compare fees and possibly switch credit monitoring services.

A recent article in one of the personal finance magazines stated identity theft risk is low and paying for a service like this is overkill. I don't agree as I like the peace of mind knowing that there are no surprises hidden in my credit file. I also enjoy being able to look at my credit reports at anytime. In addition, having access to my credit file has helped me manage the information and close dormant credit card accounts.

The service I use is Privacy Guard. If you use a credit monitoring service and have bad or good comments, please be sure to add them. I am sure it could be useful for not only myself but the readers this site too.

The peace of mind and reducing the chance for identity theft is worth the price to me.

Here is an excellent e-book about protecting your identity. It's a good read.

Small Cap Stocks, Index Funds and Trust Deeds

With better spending habits taking control of my finances, I anticipate investing more in 2006.

Here is a list of investments I made in 2005 and how they are doing:

I subscribe to a monthly newsletter on small cap stocks. Small cap stocks are small publicly held companies. By their nature they are riskier but have potential for great return. I have invested in 5 different small cap stocks in the last 9 months. My return has fluctuated and currently sits at about 5% for the year. Not really worth getting excited other than I am not losing money.

My second investment is an Index Fund which represents the entire market. In theory, if the stock market goes up the fund should go up. An Index Fund generally has lower expenses than mutual funds so some people prefer them for this reason. My return for the year is about 4.5%.

My third investment is in a trust deed. A trust deed is a note payable against a commercial property. The owner of the property promises to pay me a portion of the loan and interest each month. Trust deeds can be a risky investment. The borrower can decide to stop paying and then I would need start legal proceedings. This is a hassle and costly to do. There is no guarantee the borrower will pay timely either. At this point, I have been paid timely every month and my return is 10% on my money.

All three of the investments have pros and cons. My goal this year was to diversify into different investments hoping the small caps would give me a huge return and if not the other investments would still maintain a decent return. I can't complain so far and hopefully my investments continue to grow and I can add to them in 2006.

If you are buying a car, do this one thing...

This may sound super basic but I guarantee you it will save you thousands of dollars when you are buying a car.

Bring a financial calculator that can calculate car loan payments. This probably is the number one factor in you getting the best deal possible when you are buying a car.

When my wife and I went to buy a car last month, the first thing the salesman said was he would sell it for $550 per month over 6 years. Well, I asked him what the purchase price was and I got a blank stare. I am asked him what the interest rate was and I got a blank stare.

With calculator in hand, I knew what the car sticker price was and knocked a thousand off of it and added an estimate for sales tax. I then took the lowest interest rate that I had seen advertised by local dealers. I then subtracted my down payment and cranked out the car payment for a 5 year loan.

Guess what, the car payment was $50 per month lower and one year less. Over $6,000 lower than the amount he quoted. Ouch!

I showed the salesman and told him that was my final offer. It took a few times going back and forth but I got exactly what I calculated. When you are buying a car, please do the same thing.

You will end up overpaying when you are buying a car if you negotiate based on the amount of the monthly payment. Instead, focus on the purchase price, sales tax, interest rate, down payment and loan term and you will get a better deal.

If you have some tips for when you buy a car, please add them in the comment section.