Interest rates are constantly changing these days, and it is hard to keep track of the rates that I've been getting in my various money market accounts. I've decided to compile a list of the annual percentage yields (APYs) for institutions that I have accounts at, or have otherwise mentioned in the blog. These rates are sorted by APY.
4.00% Washington Mutual (WaMu) Online Savings
3.40% Countrywide SavingsLink
3.40% Umbrellabank Pot O'Gold Money Market
3.30% E*TRADE Complete Savings
3.25% HSBCDirect Online Savings
3.00% ING Direct Orange Savings
3.00% Citibank Ultimate Money
2.50% Guaranty Bank Gold Rewards Money Market
2.43% Western FCU Money Market
2.29% PayPal Money Market
1.63% TD Ameritrade Money Market
Rates are believed to be accurate as of 10/1/08. I did not include banks that had special, or introductory rates in the list because these are not ongoing interest rates. I am also not including non-liquid accounts such as CD's in the list.
*Note that the PayPal Money Market and the TD Ameritrade Money Market funds are not FDIC insured.
In times of uncertainty, I can offer two pieces of advice that I think few people would disagree with:
1) Never exceed the FDIC insurance limits.
2) Don't keep all of your money in one place.
DC
Thursday, October 2, 2008
Wednesday, September 3, 2008
Coinstar: The Big Lie
I am sure that most readers have seen Coinstar machines at their supermarket. The way it works is pretty simple, you deposit your change and the machine counts up your coins. It then spits out a voucher which you can redeem at the cashier. Typically, Coinstar charges you about 8.9% for the coins counted. You can also choose a gift card and avoid a counting fee.
Coinstar has a slogan "Turn your coins into cash," which I consider to be a big lie. The phase "coins to cash" always rubbed me the wrong way. I've never been a fan of Coinstar, and I refuse to pay them 8.9% to count up my coins. However, their marketing is very effective because they've somehow gotten people into thinking that coins are no longer acceptable legal tender.
Let's back up a moment and think about the language here. Aren't "coins" considered to be "cash" by definition? Since when are coins not acceptable as legal tender, for all debts public and private? I've had half a mind to bring in a big jar of coins to pay for my groceries just to protest the Coinstar machine. If they refuse my money, I could claim discrimination...
Gift cards are not cash either. On eBay, gift cards often sell for 10% less than face value. In any case, when you compare this "counting fee" versus the amount of interest that you can get at the bank, that is nearly 3 years worth of interest that you are losing out on.
If Coinstar wishes to be truthful, they ought to change their slogan to "turn your cash into a voucher or gift card that is worth less than you put in".
DC
Coinstar has a slogan "Turn your coins into cash," which I consider to be a big lie. The phase "coins to cash" always rubbed me the wrong way. I've never been a fan of Coinstar, and I refuse to pay them 8.9% to count up my coins. However, their marketing is very effective because they've somehow gotten people into thinking that coins are no longer acceptable legal tender.
Let's back up a moment and think about the language here. Aren't "coins" considered to be "cash" by definition? Since when are coins not acceptable as legal tender, for all debts public and private? I've had half a mind to bring in a big jar of coins to pay for my groceries just to protest the Coinstar machine. If they refuse my money, I could claim discrimination...
Gift cards are not cash either. On eBay, gift cards often sell for 10% less than face value. In any case, when you compare this "counting fee" versus the amount of interest that you can get at the bank, that is nearly 3 years worth of interest that you are losing out on.
If Coinstar wishes to be truthful, they ought to change their slogan to "turn your cash into a voucher or gift card that is worth less than you put in".
DC
Friday, August 1, 2008
Single Step Personal Finance Challenge
Andy from Saving to Invest, tagged me with the "Single Step Personal Finance Challenge" blog meme started by Mrs. Micah. The challenge is to "find one step you can take to make your financial system better or more organized."
Andy's single step was to open up a Roth IRA account. My only real commentary on this is that I typically contradict the common investment advice to contribute early to an IRA. I don't contribute to my Roth IRA until the end of the tax year so that I can know for sure that I qualify. A person's eligibility to contribute to a Roth is determined by their AGI in the contribution year. Since it is impossible to completely predict future income, there is always a possibility that one will exceed the Roth IRA income limit. If this happens, one must either withdraw the excess, or face an IRS penalty. In either case, this would involve some messy dealings with the IRA custodian.
Anyway, on to my single step... Readers who saw my post about Money Market Interest Rates are aware that I was considering closing one or more of my bank accounts that is paying me a lower interest rate. I've done just that. I closed my Guaranty Bank money market account, and moved the money to Washington Mutual. In one step, I am now earning 1% more interest on my money.
Although I agreed to humor Andy and Mrs. Micah with a response, I thought that this blog tag meme was a somewhat silly one, and have decided not to tag anybody else.
DC
Andy's single step was to open up a Roth IRA account. My only real commentary on this is that I typically contradict the common investment advice to contribute early to an IRA. I don't contribute to my Roth IRA until the end of the tax year so that I can know for sure that I qualify. A person's eligibility to contribute to a Roth is determined by their AGI in the contribution year. Since it is impossible to completely predict future income, there is always a possibility that one will exceed the Roth IRA income limit. If this happens, one must either withdraw the excess, or face an IRS penalty. In either case, this would involve some messy dealings with the IRA custodian.
Anyway, on to my single step... Readers who saw my post about Money Market Interest Rates are aware that I was considering closing one or more of my bank accounts that is paying me a lower interest rate. I've done just that. I closed my Guaranty Bank money market account, and moved the money to Washington Mutual. In one step, I am now earning 1% more interest on my money.
Although I agreed to humor Andy and Mrs. Micah with a response, I thought that this blog tag meme was a somewhat silly one, and have decided not to tag anybody else.
DC
Tuesday, July 22, 2008
Where do Dead Blogs go?
Where do dead blogs go? I have a few of them listed on my blogroll, and I'm not sure what I should do. Money, Matter, and More Musings (link might not work) written by golbguru, has pretty much ceased publishing. For a few months his postings have been sporadic, and increasingly negative in tone. Then in May, he posted what most would consider to be a rant about a need for internet income regulations reform (link might not work). Several commenters on his blog were openly concerned about what happened to golb. Personally, I tried sending a couple of Emails offering him some moral support, but he never responded. I am still scratching my head about what happened.
Retiring Early has been AWOL since last September, though this blog remains on my blogroll. He stopped writing at about the same time that he reached the $1 million mark on his net worth. When I contacted him, he seemed to indicate that he was busy, but would resume posting sometime soon. That was over half a year ago...
There are many other dead blogs in the PF blogosphere. The blog Million Dollar Count Down inspired me to write my post What happened to the exuberant PF bloggers? He has not been heard from for over a year.
And the list goes on. Some other blogs that I used to read include:
Seattle Simplicity who apparently decided to simplify her life by eliminating her blog.
300 @ 30 who expects to live until 120, and is still waiting for 3 unspecified things to happen in his life before posting again.
Money 360, who after a few starts and stops, is in a permanent retooling phase.
My Money Path formerly authored by a young certified public accountant. Leave it to a CPA to explain how shelling out over $1200 for Dodgers playoff tickets doesn't affect his net worth unless the team actually makes the playoffs.
Clutter2Cash whose last post gave us a net worth update, just before she seemed to drop off the face of the Earth.
I did try to contact a few of these bloggers about their apparently dead blogs. In most cases, I didn't get any response. Of those that I did reach, they clearly seemed not to want to be contacted.
Sometimes dead blogs do come back to life. Penny Foolish was one of the blogs that originally inspired me to start my own blog. You can tell that I used the same color scheme as Kira did. Her blog was idle for a long stretch from September until June, but it looks like she is back. Let's hope that she'll keep up the posting.
Another blog, calgirlfinance, went on an 11 month hiatus before coming back. Actually that one was a bit of cliffhanger as the writer informed her readers in the last post before her wedding that she had not told her fiance (now husband) about the blog. Many readers assumed that things didn't go over too well when she finally let him know.
Note: I usually contact a blogger to let them know if I have written a post linking to their blog. However, since it is clear that many of these PF bloggers no longer wish to be contacted, I will not be doing that this time.
DC
Retiring Early has been AWOL since last September, though this blog remains on my blogroll. He stopped writing at about the same time that he reached the $1 million mark on his net worth. When I contacted him, he seemed to indicate that he was busy, but would resume posting sometime soon. That was over half a year ago...
There are many other dead blogs in the PF blogosphere. The blog Million Dollar Count Down inspired me to write my post What happened to the exuberant PF bloggers? He has not been heard from for over a year.
And the list goes on. Some other blogs that I used to read include:
Seattle Simplicity who apparently decided to simplify her life by eliminating her blog.
300 @ 30 who expects to live until 120, and is still waiting for 3 unspecified things to happen in his life before posting again.
Money 360, who after a few starts and stops, is in a permanent retooling phase.
My Money Path formerly authored by a young certified public accountant. Leave it to a CPA to explain how shelling out over $1200 for Dodgers playoff tickets doesn't affect his net worth unless the team actually makes the playoffs.
Clutter2Cash whose last post gave us a net worth update, just before she seemed to drop off the face of the Earth.
I did try to contact a few of these bloggers about their apparently dead blogs. In most cases, I didn't get any response. Of those that I did reach, they clearly seemed not to want to be contacted.
Sometimes dead blogs do come back to life. Penny Foolish was one of the blogs that originally inspired me to start my own blog. You can tell that I used the same color scheme as Kira did. Her blog was idle for a long stretch from September until June, but it looks like she is back. Let's hope that she'll keep up the posting.
Another blog, calgirlfinance, went on an 11 month hiatus before coming back. Actually that one was a bit of cliffhanger as the writer informed her readers in the last post before her wedding that she had not told her fiance (now husband) about the blog. Many readers assumed that things didn't go over too well when she finally let him know.
Note: I usually contact a blogger to let them know if I have written a post linking to their blog. However, since it is clear that many of these PF bloggers no longer wish to be contacted, I will not be doing that this time.
DC
Tuesday, June 3, 2008
Net Worth Comparison
I have found that posts about net worth are very popular in the PF blogosphere. Perhaps it is people's natural curiosity -- wanting to assess how one is doing compared to others. When you read new blog, do you find yourself asking questions like: How old is this blogger? How much does this person make? Am I doing better than them?
One of the most popular posts at PFStock asks the question: Are You Wealthy? This post examines a formula from the book The Millionaire Next Door. For your reference, the formula is repeated here:
From this formula, I used the example of a 40 year old who makes $100,000 a year. In this case, the expected net worth of that person is $400,000.
In addition to this formula, I want to mention a couple of other websites to look at. CNN Money has a Net Worth Comparison Tool that asks you to enter your age and annual income. It then gives you the median net worth a particular age or income level. In the case of the 40 year old making $100,000 a year, the median net worth based on age is $44,875 and based on income is $363,125. You can see that although it is a realistic scenario, these median values are very different. The result is also much different from the Millionaire formula, and it does not tell you what your net worth should be. But, it does give you an idea of how you compare to others based on age and income.
Another website that I would like to mention is NetworthIQ. This site has compiled a set of Net Worth Statistics based on what its members have reported. In the case of a 40 year olds, the median net worth was $462,658. And for for those making $100,000 a year, the median net worth was $260,828. This data was current as of 1/26/2008. In addition to age and income you can compare net worth based on education, occupation, and state of residence.
Some would argue that the NetworthIQ data is not a good representation of the population as a whole. This is because the net worth people report is not audited, and you can see only what people choose to disclose. Arguably, there are those who may have overestimated the value of their home, cars, and personal property in order to inflate their net worth. But taken with a grain of salt, one can still find some usefulness in the numbers.
So there you have it: three ways that you can compare your net worth to others. Enjoy.
DC
One of the most popular posts at PFStock asks the question: Are You Wealthy? This post examines a formula from the book The Millionaire Next Door. For your reference, the formula is repeated here:
Multiply your age times your realized pretax annual household income from all sources except inheritances. Divide by ten. This, less any inherited wealth, is what your net worth should be.
From this formula, I used the example of a 40 year old who makes $100,000 a year. In this case, the expected net worth of that person is $400,000.
In addition to this formula, I want to mention a couple of other websites to look at. CNN Money has a Net Worth Comparison Tool that asks you to enter your age and annual income. It then gives you the median net worth a particular age or income level. In the case of the 40 year old making $100,000 a year, the median net worth based on age is $44,875 and based on income is $363,125. You can see that although it is a realistic scenario, these median values are very different. The result is also much different from the Millionaire formula, and it does not tell you what your net worth should be. But, it does give you an idea of how you compare to others based on age and income.
Another website that I would like to mention is NetworthIQ. This site has compiled a set of Net Worth Statistics based on what its members have reported. In the case of a 40 year olds, the median net worth was $462,658. And for for those making $100,000 a year, the median net worth was $260,828. This data was current as of 1/26/2008. In addition to age and income you can compare net worth based on education, occupation, and state of residence.
Some would argue that the NetworthIQ data is not a good representation of the population as a whole. This is because the net worth people report is not audited, and you can see only what people choose to disclose. Arguably, there are those who may have overestimated the value of their home, cars, and personal property in order to inflate their net worth. But taken with a grain of salt, one can still find some usefulness in the numbers.
So there you have it: three ways that you can compare your net worth to others. Enjoy.
DC
Friday, May 23, 2008
PF Stock Welcomes Cruise Critic Readers
PFStock has recently been mentioned by the critically acclaimed cruise website Cruise Critic. An editor for Cruise Critic contacted me after reading my posts about Cruise Line Shareholder Benefits. He was interested in writing a news piece about the shareholder perks that were offered by Carnival and Royal Caribbean, and to get some background information from me.
I have actually been a reader of Cruise Critic for over 10 years, so I was pleased to have the opportunity to be profiled there. Welcome to my new readers; I hope that you will stick around to read some of my personal finance posts.
PF Stock
I have actually been a reader of Cruise Critic for over 10 years, so I was pleased to have the opportunity to be profiled there. Welcome to my new readers; I hope that you will stick around to read some of my personal finance posts.
PF Stock
Thursday, April 17, 2008
I Changed My Mind about Yodlee
After I had written about giving up on Yodlee in my post, So Long Yodlee, I received a comment from an apparent Yodlee representative. I also received another message from Yodlee's senior VP Peter Hazlehurst. Together, their comments expounding the benefits of Yodlee made me think that we were talking about two different products. Their messages mentioned the features of their Yodlee 8.0 platform.
Taking a step backward, Yodlee is an account aggregation service that polls different websites where you have online accounts. These accounts can be aggregated so that you can get a "big picture" look at your financial data. As someone with more than 20 accounts at several different financial institutions, I understand how this type of service can be useful. I mentioned before that I was using two different sites that were "powered by Yodlee". Specifically, these sites were MSN Money and Smith Barney's "My Accounts" feature. Due to problems that I experienced with these websites, I decided to give up trying to make Yodlee's Account Aggregation service work with my finances.
As I mentioned, comments I received on my earlier post got me to reconsider using Yodlee. It turns out that these aggregation services (MSN and Smith Barney) are different from the services offered by Yodlee directly. Intrigued I decided to establish an account directly with the Yodlee MoneyCenter rather than using the other two sites. The differences are like night and day. Let me go over each point that I mentioned in my previous post:
1) Not all banks participate in Yodlee. Countrywide Bank is now available on Yodlee. About three or four of my accounts are still not supported, and I would need to add them manually if I wanted to use Yodlee. According to Peter Hazlehurst, some credit unions use a technology called "CAPTCHA" which shows "squiggly" letters, and Yodlee doesn't support them. The term CAPTCHA is an acronym that means "Completely Automated Public Turing test to tell Computers and Humans Apart". And, I have no idea what a Turing test is.
2) The security and "Secure Sign On" concerns are still there. This is a question of risk versus reward, and should be up to the individual user. How comfortable are you with storing your personal information online with Yodlee? While Yodlee's security is probably very good, if their security was ever compromised, fixing the problem would be a massive headache for its numerous users.
3) The duplicate account problems are taken care of with Yodlee Money Center. By contrast, if I use either MSN Money or Smith Barney, my duplicate accounts are double counted by Yodlee. As far as I know there is no way to eliminate this double counting in these third party applications. So, I have stopped using MSN Money and Smith Barney (Citigroup) for my account aggregation needs.
4) Similarly, extraneous accounts can be turned off in Yodlee MoneyCenter. But they cannot be turned off if I use MSN Money or Smith Barney. Before this change, I had a couple of accounts that I closed years ago, but are still associated with an existing bank login. These accounts would show up as extraneous zero balance accounts.
5) So things definitely work better with Yodlee 8.0 in MoneyCenter. However, I wouldn't consider all of my concerns to be fully resolved. To make a long story short, many of my issues were indeed corrected. But, there still are a few lingering problems. I think that one issue is how much effort one is willing to put in to make Yodlee work for a particular situation.
I will mention two features that I do find very useful in Yodlee are alerts and auto-login. The alerts feature allow you to set alerts if, for example, your account balance drops below a certain amount, or a very large transaction is processed. This feature can help in the early detection of fraud. The other feature I like is auto-login where Yodlee can automatically log you in to some (but not all) accounts with the click of a button. You don't need to remember or type your password. This, of course, makes it all the more important that you keep your Yodlee password secure.
Anyway, I now consider Yodlee to be satisfactory for my purposes. While I still use an Excel spreadsheet to periodically get a complete picture of my finances, Yodlee is a quick way to check on my account balances.
DC
Taking a step backward, Yodlee is an account aggregation service that polls different websites where you have online accounts. These accounts can be aggregated so that you can get a "big picture" look at your financial data. As someone with more than 20 accounts at several different financial institutions, I understand how this type of service can be useful. I mentioned before that I was using two different sites that were "powered by Yodlee". Specifically, these sites were MSN Money and Smith Barney's "My Accounts" feature. Due to problems that I experienced with these websites, I decided to give up trying to make Yodlee's Account Aggregation service work with my finances.
As I mentioned, comments I received on my earlier post got me to reconsider using Yodlee. It turns out that these aggregation services (MSN and Smith Barney) are different from the services offered by Yodlee directly. Intrigued I decided to establish an account directly with the Yodlee MoneyCenter rather than using the other two sites. The differences are like night and day. Let me go over each point that I mentioned in my previous post:
1) Not all banks participate in Yodlee. Countrywide Bank is now available on Yodlee. About three or four of my accounts are still not supported, and I would need to add them manually if I wanted to use Yodlee. According to Peter Hazlehurst, some credit unions use a technology called "CAPTCHA" which shows "squiggly" letters, and Yodlee doesn't support them. The term CAPTCHA is an acronym that means "Completely Automated Public Turing test to tell Computers and Humans Apart". And, I have no idea what a Turing test is.
2) The security and "Secure Sign On" concerns are still there. This is a question of risk versus reward, and should be up to the individual user. How comfortable are you with storing your personal information online with Yodlee? While Yodlee's security is probably very good, if their security was ever compromised, fixing the problem would be a massive headache for its numerous users.
3) The duplicate account problems are taken care of with Yodlee Money Center. By contrast, if I use either MSN Money or Smith Barney, my duplicate accounts are double counted by Yodlee. As far as I know there is no way to eliminate this double counting in these third party applications. So, I have stopped using MSN Money and Smith Barney (Citigroup) for my account aggregation needs.
4) Similarly, extraneous accounts can be turned off in Yodlee MoneyCenter. But they cannot be turned off if I use MSN Money or Smith Barney. Before this change, I had a couple of accounts that I closed years ago, but are still associated with an existing bank login. These accounts would show up as extraneous zero balance accounts.
5) So things definitely work better with Yodlee 8.0 in MoneyCenter. However, I wouldn't consider all of my concerns to be fully resolved. To make a long story short, many of my issues were indeed corrected. But, there still are a few lingering problems. I think that one issue is how much effort one is willing to put in to make Yodlee work for a particular situation.
I will mention two features that I do find very useful in Yodlee are alerts and auto-login. The alerts feature allow you to set alerts if, for example, your account balance drops below a certain amount, or a very large transaction is processed. This feature can help in the early detection of fraud. The other feature I like is auto-login where Yodlee can automatically log you in to some (but not all) accounts with the click of a button. You don't need to remember or type your password. This, of course, makes it all the more important that you keep your Yodlee password secure.
Anyway, I now consider Yodlee to be satisfactory for my purposes. While I still use an Excel spreadsheet to periodically get a complete picture of my finances, Yodlee is a quick way to check on my account balances.
DC
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