I haven't gamed women in all the exotic places around the world that a lot of you guys have, so in an effort to contribute something valuable to the forum, I'm submitting this financial data sheet. There is so much that can be discussed when it comes to financial accounts and I'm only scratching the surface. These are my recommendations and I'm throwing them out there very quickly so feel free to agree/disagree/contribute. I'll add more thoughts as they come up, as I'm sure I've left something out.
For interest calculations, I'm using simple interest to make the calculations quick and easy (and slightly inaccurate).
Checking Account
Background: Due to the Durbin Ammendment that was passed in the past year, banks are limited on the debit card swipe fees they can charge businesses. Given that banks rely on that revenue significantly, they have started passing the fees to the consumer (you and me) in the form of ATM usage fees and checking account service fees. So for example, Wells Fargo recently announced they would start piloting (in a few states) an effort to charge a $3 one-time fee every month to use the ATM. The big banks (e.g. Wells Fargo, Bank of America) also typically charged a monthly service fee on the account unless you maintain a certain average daily balance or you have direct deposit.
My recommendation: I currently use a credit union because it works for my situation and they have a good "no fees" policy.
If you're a world traveler, I recommend using the Schwab checking account. You have to open a Schwab One brokerage account but there is no balance requirement on that account, so you'll be fine. The down side with Schwab, and most of my recommendations, is there are very few, if any, brick and mortar locations to go and conduct business in person. I can tell you from experience that I am active with my money - always moving it around - and I never have to go to a bank. It's just not an issue.
The reason I recommend Schwab is because of the ATM reimbursement. You can literally go to any ATM in the world, make a cash withdrawal, and they will reimburse the fees. This is a great way for you int'l travelers to get foreign currency.
I also recommend Ally checking (more on them later) due to very similar fee structure as Schwab (essentially, none), but they recently stopped reimbursing foreign ATM fees.
http://www.schwab.com/public/schwab/bank...g/checking
http://www.ally.com/bank/interest-checking-account/
Savings Account
Background: There is only one reason to keep your money is a low interest account - such as those offered by Wells Fargo, Bank of America, and Chase - and that is because you need to store it with the anticipation of needing very quick (same day) access to it. Even then, understand that you are only getting .05% on the typical Wells Fargo account.
My Recommendation: I recommend using a high yield online account such as American Express Savings, Discover Savings, ING, FNBO.
These banks all pay in the 1% range which is historically terrible, but still better than a paltry .05%. I currently use an Ally Money Market Account as a savings account because the yield is comparable to the online savings account (.99%) and it serves as a good holding account until I transfer money into CDs (more on that later).
I know 1% is not a lot of money, but let's consider the following example:
I have $100k in my savings. At Wells Fargo @ .05% I am making $50 every year on that money. That is not even one night out for most guys here. If I stash that cash in an Ally Money Market account @ .99%, I'm making $990 for the year. That still sucks compared to what we're used to, but that is the difference between a night out or an airline ticket to another country. That said, with $100K, I'm going to show you why you should use an Ally Certificate of Deposit instead of a savings account.
http://www.money-rates.com/savings.htm
Certificate of Deposit (CD)
Background: CD's pay a certain interest rate based on a length of time that you are loaning your money to the bank or organization. If you buy a 1 year CD at 1% then you are essentially giving your money away for one year with the agreement you will receive your principle plus interest when the CD matures (or expires). CDs are safe investments that rarely outperform the stock market, but have become more popular choices given the turbulence and uncertainty in the financial world.
My Recommendation: I use CDs for larger sums of cash that I will not need immediate access to. I never lock up all of my money (I use Ally money market account as a stash account for easy-to-access savings). Typically I would not recommend CDs due to the low interest, but since the market is risky and we're trying to preserve wealth (for the purposes of this post), I recommend the Ally 5-year CDs. These CDs are the best because the interst is much higher than a 1-year CD and there is only a 60-day interest penalty if you break the CD early. So, using our $100k example from above, we know with Ally Money Market we can get $990 every year in interest. With a 5-year Ally CD that pays 2.30%, after six months you have already exceeded the money market account and earned 1.54%; 12 months your interest rate is 1.92%; 18 months you're earning an average of 2.05% and so on. That means your first year you earn $1,920 with a 5-year CD instead of the $990 above. Is it a lot of money? No. But that $1,920 is better than $990 and will buy you a nice little vacation to game women and get pussy. All for what? Nothing. You just let your money sit there and earn for you. I split my money across a half dozen 5-year CDs that way if I need a little emergency cash, I just break one CD and the others keep earning 2.30%.
Note: The Ally 5-year CD has since gone down a few basis points but still above 2%.
http://www.ally.com/bank/high-yield-cd/
ATM/Debit Cards
There are only two reasons you should regularly use a debit card:
1) To withdrawal cash from an ATM
2) If you are too financially irresonsible to use a credit card instead.
Otherwise, you should pay for EVERYTHING with credit or cash.
Credit Cards
Background: I pay for everything with a credit card. Every time I swipe my card I want to be earning something from it. You should never swipe your card and pay it off without getting miles or points.
My Recommendation: Keep track of the latest offers through forums (fatwallet.com or personal finance websites).
I use the Chase British Airways card because I picked it up during a recent special where you got 50k miles for opening the account and an additional 50k for spending $2500 in three months. That's 100k miles I picked up in just a few months. I get 1.25 miles for every purchase and pay a $95 annual fee. I paid the fee once and will cancel by next year, but not before I get at least two int'l tickets out of this. All for what? A $95 annual fee and using my card for everything. If I choose to use one of British Airways partners, I can fly domestic U.S. with American Airlines and get at least four tickets (25k miles each) with the miles. If Southwest is your airline of choice, they have a great card with great bonuses. American Express Starwood is probably the most popular because you can use it for hotels around the world (among other things) and you get a bonus 20% miles when you convert your points to miles (20k points gives you 25k miles and thus a domestic U.S. ticket).
Just remember, you should be getting SOMETHING EVERY TIME YOU SWIPE YOUR CARD. Throw away your Wells Fargo or Bank of America credit card.
http://www.nerdwallet.com/
Brokerage Firm
Background: When you're trading, access to quality chart software (i.e. your trading platform) and low transaction fees are absolutely critical. If you're an investor, it's more about access to funds and indexes.
My Recommendation: I have friends who use Trade King (http://www.tradeking.com/) and love it. It's kind of the Southwest Airlines of the brokerage world; that is, low-cost and no-frills trading. I personally use Fidelity because they're service is top-notch and their trading platform is very good. Important to note that right now, for me, cash is king. I haven't made a trade in about a year. Prior to going all cash, I was making about 300-500 trades every year. Fidelity charges about $8 per trade and that trends on the higher side for what active traders pay, but I was ok with the fee structure because their trading platform (Active Trader Pro) is one of the best. I am comfortable with it and I personally believe this helps me trade better (and negates the higher transaction price). I don't look forward to trading for awhile, or at least until we recover from this shitty fiscal environment (probably never). I keep my retirement accounts with Fidelity as well.
For interest calculations, I'm using simple interest to make the calculations quick and easy (and slightly inaccurate).
Checking Account
Background: Due to the Durbin Ammendment that was passed in the past year, banks are limited on the debit card swipe fees they can charge businesses. Given that banks rely on that revenue significantly, they have started passing the fees to the consumer (you and me) in the form of ATM usage fees and checking account service fees. So for example, Wells Fargo recently announced they would start piloting (in a few states) an effort to charge a $3 one-time fee every month to use the ATM. The big banks (e.g. Wells Fargo, Bank of America) also typically charged a monthly service fee on the account unless you maintain a certain average daily balance or you have direct deposit.
My recommendation: I currently use a credit union because it works for my situation and they have a good "no fees" policy.
If you're a world traveler, I recommend using the Schwab checking account. You have to open a Schwab One brokerage account but there is no balance requirement on that account, so you'll be fine. The down side with Schwab, and most of my recommendations, is there are very few, if any, brick and mortar locations to go and conduct business in person. I can tell you from experience that I am active with my money - always moving it around - and I never have to go to a bank. It's just not an issue.
The reason I recommend Schwab is because of the ATM reimbursement. You can literally go to any ATM in the world, make a cash withdrawal, and they will reimburse the fees. This is a great way for you int'l travelers to get foreign currency.
I also recommend Ally checking (more on them later) due to very similar fee structure as Schwab (essentially, none), but they recently stopped reimbursing foreign ATM fees.
http://www.schwab.com/public/schwab/bank...g/checking
http://www.ally.com/bank/interest-checking-account/
Savings Account
Background: There is only one reason to keep your money is a low interest account - such as those offered by Wells Fargo, Bank of America, and Chase - and that is because you need to store it with the anticipation of needing very quick (same day) access to it. Even then, understand that you are only getting .05% on the typical Wells Fargo account.
My Recommendation: I recommend using a high yield online account such as American Express Savings, Discover Savings, ING, FNBO.
These banks all pay in the 1% range which is historically terrible, but still better than a paltry .05%. I currently use an Ally Money Market Account as a savings account because the yield is comparable to the online savings account (.99%) and it serves as a good holding account until I transfer money into CDs (more on that later).
I know 1% is not a lot of money, but let's consider the following example:
I have $100k in my savings. At Wells Fargo @ .05% I am making $50 every year on that money. That is not even one night out for most guys here. If I stash that cash in an Ally Money Market account @ .99%, I'm making $990 for the year. That still sucks compared to what we're used to, but that is the difference between a night out or an airline ticket to another country. That said, with $100K, I'm going to show you why you should use an Ally Certificate of Deposit instead of a savings account.
http://www.money-rates.com/savings.htm
Certificate of Deposit (CD)
Background: CD's pay a certain interest rate based on a length of time that you are loaning your money to the bank or organization. If you buy a 1 year CD at 1% then you are essentially giving your money away for one year with the agreement you will receive your principle plus interest when the CD matures (or expires). CDs are safe investments that rarely outperform the stock market, but have become more popular choices given the turbulence and uncertainty in the financial world.
My Recommendation: I use CDs for larger sums of cash that I will not need immediate access to. I never lock up all of my money (I use Ally money market account as a stash account for easy-to-access savings). Typically I would not recommend CDs due to the low interest, but since the market is risky and we're trying to preserve wealth (for the purposes of this post), I recommend the Ally 5-year CDs. These CDs are the best because the interst is much higher than a 1-year CD and there is only a 60-day interest penalty if you break the CD early. So, using our $100k example from above, we know with Ally Money Market we can get $990 every year in interest. With a 5-year Ally CD that pays 2.30%, after six months you have already exceeded the money market account and earned 1.54%; 12 months your interest rate is 1.92%; 18 months you're earning an average of 2.05% and so on. That means your first year you earn $1,920 with a 5-year CD instead of the $990 above. Is it a lot of money? No. But that $1,920 is better than $990 and will buy you a nice little vacation to game women and get pussy. All for what? Nothing. You just let your money sit there and earn for you. I split my money across a half dozen 5-year CDs that way if I need a little emergency cash, I just break one CD and the others keep earning 2.30%.
Note: The Ally 5-year CD has since gone down a few basis points but still above 2%.
http://www.ally.com/bank/high-yield-cd/
ATM/Debit Cards
There are only two reasons you should regularly use a debit card:
1) To withdrawal cash from an ATM
2) If you are too financially irresonsible to use a credit card instead.
Otherwise, you should pay for EVERYTHING with credit or cash.
Credit Cards
Background: I pay for everything with a credit card. Every time I swipe my card I want to be earning something from it. You should never swipe your card and pay it off without getting miles or points.
My Recommendation: Keep track of the latest offers through forums (fatwallet.com or personal finance websites).
I use the Chase British Airways card because I picked it up during a recent special where you got 50k miles for opening the account and an additional 50k for spending $2500 in three months. That's 100k miles I picked up in just a few months. I get 1.25 miles for every purchase and pay a $95 annual fee. I paid the fee once and will cancel by next year, but not before I get at least two int'l tickets out of this. All for what? A $95 annual fee and using my card for everything. If I choose to use one of British Airways partners, I can fly domestic U.S. with American Airlines and get at least four tickets (25k miles each) with the miles. If Southwest is your airline of choice, they have a great card with great bonuses. American Express Starwood is probably the most popular because you can use it for hotels around the world (among other things) and you get a bonus 20% miles when you convert your points to miles (20k points gives you 25k miles and thus a domestic U.S. ticket).
Just remember, you should be getting SOMETHING EVERY TIME YOU SWIPE YOUR CARD. Throw away your Wells Fargo or Bank of America credit card.
http://www.nerdwallet.com/
Brokerage Firm
Background: When you're trading, access to quality chart software (i.e. your trading platform) and low transaction fees are absolutely critical. If you're an investor, it's more about access to funds and indexes.
My Recommendation: I have friends who use Trade King (http://www.tradeking.com/) and love it. It's kind of the Southwest Airlines of the brokerage world; that is, low-cost and no-frills trading. I personally use Fidelity because they're service is top-notch and their trading platform is very good. Important to note that right now, for me, cash is king. I haven't made a trade in about a year. Prior to going all cash, I was making about 300-500 trades every year. Fidelity charges about $8 per trade and that trends on the higher side for what active traders pay, but I was ok with the fee structure because their trading platform (Active Trader Pro) is one of the best. I am comfortable with it and I personally believe this helps me trade better (and negates the higher transaction price). I don't look forward to trading for awhile, or at least until we recover from this shitty fiscal environment (probably never). I keep my retirement accounts with Fidelity as well.
