Get $45 to spend on Uber

If you have never used Uber before, its a great new cab service that you can request a ride using your smartphone. The prices aren't necessarily cheaper, but at least competitive with other cab services. For e.g. Palo Alto to SFO costs $80. They also add a 20% gratuity by default, which may be a bit higher than what I would normally tip. But the biggest benefit to using Uber is the convenience: no more calling and waiting for a cab, no more getting worried as to when the cab will arrive, no more searching for phone numbers or haggling for prices. Uber's smartphone app is slickly built and makes hailing a breeze. I wanted to highlight this deal, which lets you get up to $45 in credit (no strings attached). This is a great way to try out the service and see if you like it. So here's how you do it. There are 2 steps to it.

1. Go ahead and click this link to sign up for a new Uber account. This is my referral link and we both get a $20 credit when you take a ride.

2. Then head to Amazon local and get this voucher for $25 for free. You should get a link with your voucher in a few minutes and when you take your first ride, you can apply the voucher. Keep in mind the voucher is only valid till August 10th.

And boom there you go, $45 of free credit to spend on Uber

(Hat tip to onemileatatime)

Is there something like a truly free credit report?

At some point or another, each one of us has encountered an ad claiming: "Free credit report". 99% of time, there is nothing free at the other side of link. The FTC actually requires the big 3 credit agencies to provide a free credit report each year. But they have all managed to bury it so deep in their websites that its literally a treasure hunt to find the right website. If after having done all of that, you manage to get hold of your credit report, you would be then disappointed to know that your credit score is no where to be seen. Welcome to the world of subterfuge involving dishonest practices by companies and websites where they are all out to rip you off of your money to get something that they owe it you for free.

Lets start with a fun exercise. Someone told you, "Hey, you don't have to pay for your credit report. You can get it for free. The FTC mandates it". You go ahead excitedly and search for 'Free credit report'. Here's a screenshot of what you would see. Now tell me amongst all the results (sponsored & otherwise) which ones are actually free. Hint: There is only one

Here's the right answer:

AnnualCreditReport.com is the only website that is mandated by the FTC to provide you with direct links to the free credit reports that the big 3 credit agencies are required to give you each year. Stay away from everything else! Now once you get that, there are a few things to take care of. Again, keep in mind that the big 3 credit agencies are reluctantly giving you the free credit report that they are mandated to provide each year. 

You can start off by selecting any of the 3, but before you do that you have to go through an ID verification process where you will be asked a few questions about your background to make sure that you are who you claim to be. Now an ideal strategy would be pick one of the 3 credit reports at any point of time, say for e.g. we start with Transunion and then pick Experian after 4 months and Equifax after 8. Then by the time you wind up 12 months, you can go back and get your Transunion report again. This way you are able to monitor your credit history every 4 months (which is a bit too long of a gap, in my opinion, but there are other solutions to cover for that). 

Another thing to keep in mind when you go and open up your credit report is to IGNORE any and all links that offer you to reveal your current credit score. None of them are free and even worse, they will take you away from you Credit Report, with no way to get back. So the first step is to save the report. Now the best way to do it is do Ctrl+A (Cmd+A in case of a mac) and then copy and paste it in a word doc or just into you webmail and mail it to yourself. Once you've done that, you can then look through your report without fear of timing out. Now, how to read and understand your credit report is a whole different topic and we'll cover it next time.  

In the meanwhile, keep in mind, that your credit scores have nothing to do with your credit report. A company called Fair Isaac Corporation, better known as FICO, provides credit scores. And its kind of difficult to get a proper FICO score for free. In any case, what most of the credit agencies provide is their own version of the FICO score and you've to pay for it. Not worth it, in my opinion. Because you can get those same scores for free from 2 awesome websites: Creditkarma.com and Creditsesame.com. They both will provide you with a credit score - Transunion score and Experian score respectively. And they are well and truly free, no strings attached. They both operate on the Mint.com business model, where they'll try to sell you financial products like credit cards, savings accounts, IRAs, insurance and other such services based on your credit score (anonymized, of course). If you do don't need any of the other services you can steer clear of them and get your score for free literally everyday if you want.

Pay Day Loans

Pay day loans are these bad, scum of the earth companies out there to rip people off their hard earned money. At first sight, it might seem that they are filling a legitimate need. People sometimes need short term loans. They could have an urgent expense that can't wait for pay date. So one could go to a friend for credit for a while or get it from someone you know. Most times the loan is a personal favor so there is little or no interest paid. Banks generally don't give our short term loans because it doesn't make sense for them financially. What if you didn't know anyone that could lend you money?

Enter the Pay Day loan companies and Cash Advance stores. Traditionally your neighborhood stores would double up as Check cashing stores. Some of them saw an opportunity and started offering pay day loans or cash advance. The way that works is you give a check to the store when they give you money. The store will then deposit the check a day or 2 before your pay date to take back the money with a nice margin fee on top. The fees generally range from $15-$20 for every $100 they lend. Keep in mind, the time frame is less than a month. So if one does the math, this translates to about a 400%-500% APR. Holy mother of God! Yes that's right. So now you know, why I hate them so much.

Now what happens when you take evil business model and mix it with the big bad world of internet. Bazoomba! An instant $6bn industry! Look I get it, its a risky business. The default rates are high and risk of loss of principal. But the 'payday loan sharks' (I came with this new term, just now)  have perfected this business model and optimized it to the most efficient level. Now when you borrow money you're basically mortgaging your credit score and financial future off to them. Plus there is so much data available online about you, that these companies have sophisticated models to predict exactly  the likelihood of someone paying them back. So in essence they reduced the risk of loss significantly. Now one would think that they would pass back some of these efficiencies back the people who avail of their services. But as Gordon Gekko famously said, Greed with a capital G is good. The rates are still the same, the interest rates still ridiculously astronomically high.

I believe this space is ripe for disruption and one I'm not going to feel bad about dying. I think I would put them above music industry and banking industry in my hate list. I can see the signs already. A bunch of startups are trying make a difference. Activehours is interesting idea and their idea seems to be that one should be able to get their salary in advance if they have already put in the hours since the pay back is assured then. Lendup is another company who trying model an alternate credit score using your social and online date. Sociogrammics is also doing something similar.

Good, but not great yet. We need more of the smart young people to work on a real problems instead of building another mobile/social/photosharing app to check-in the next time you fart!

Pennies for a dollar

For a long while now, I have been inspired by amazing bloggers who are living examples of the concept of 'New Rich' . And mind you, I'm talking about 20 something guys and gals who have transformed their lifestyles by various life-hacks. Just to give you an example of what I'm talking about, imagine living a life of a millionaire with only a few hours of work every week, or managing to fly around world for free, or becoming New York Times bestseller at 26 . All these blogs have amazing tips, practical ideas and best of all proven records of them working. Now, for a lot of people all of their advice or tips may not be appropriate. But lets pick what we can and work with that.

I've also been very interested in managing my money and maximizing it. I'm always on the lookout for deals, coupons and discounts. But then who isn't. The key is to be systematic and plan in advance to make the most of the all the deals and coupons. Same goes with investing, saving and money management in general. Inspired by Tim Ferris, I'm going to take a deep dive into cutting deals and trying out these ideas and distill them to find the ones that work the best and the ones that don't. My one peeve with a lot of these tips and blogs is that a lot of the things they suggest take too much time and people have waste a lot of effort on research. One of my biggest philosophies in life is the 80/20 principle. Nothing new but its amazing how every time you have to make a decision, all you need to do is think about the Big things and the rest will take care of itself. So I want to focus on only the stuff that gives the maximum bang for your buck/effort/time whatever you deem important.

And thus my blog!