The Company
HSBC is a respected international bank with a reputation of credibility. They have good customer service (on the phone and through email) and a wide range of banking products. Because the savings account is provided by an established bank you can rest assured your money is safe.

Requirements
With this bank you don’t have to worry about minimum account balances and there are no inactivity fees. You will need to be over 18 and be a US citizen to set up an account. Make sure you have your social security number and an active checking account (to transfer money to their bank). Over all they don’t ask for anything more than other banks. As a security measure make sure your browser is up to date and that you actively run virus protection software.

Setting Up an Account
Setting up an account is fairy easy but verifying your settings is a little cumbersome. HSBC makes this as easy as possible but like most things online they could improve. But when your financial security is involved it’s worth it to take all necessary precautions. One thing that sets HSBC apart from other sign up processes is that they run a credit check as part of the account setup process. They’ll ask you three questions pertaining to your credit history just to make sure you are who you say you are. They also send you a letter containing a verification password (or temporary password). They actually mail this to your physical mailing address. It usually takes less then a few days. You will get a number of emails that are used in the new account creation. When you have everything you will need to enter it in the verification screen.

Time to Setup Account: 8 minutes
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Signing In
After you setup an account HSBC has some extra security measures. For example, they require you to enter your password through the keyboard and by typing it in using an online keyboard. Having more security is always a good thing so I don’t fault them in this area. I’ve noticed other banks following HSBC in many of their security measures.

Transfering Money
Like other online banks when you make a transfer in or out of your account there is a 3-4 day processing time. In my experience this in normal (even though it can be a pain sometimes). If you have a HSBC bank account the transfer time is next to nothing.

Summary
HSBC is a solid bank with a very secure account creation process. They will take care of you if you need help. They have a competitive savings rate tied to your own ATM card. Overall they have been one of my favorite banks to work with.
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Vampire Energy

The term ‘vampire energy’ refers to anything that is wasting electricity while you’re not actively using it. Just like vampires these things are active at night and suck your blood… I mean money (to the tune of 3 billion dollars a year in the USA). From this info-graphic the biggest culprits are plasma screen TVs, video game consoles, inactive computers/laptops, and VCRs.
How to Stop It: Make sure buy electronics that turn completely off and use a power strip to turn off everything completely. Graphic Source

Holding on to Old Stuff
How does holding on to old stuff sap your wealth? Well, stuff you aren’t using is tying up valuable cash. This cash could be worth a lot in the future, especially if you consider compound interest. Read more in this post about how much is a $100 in the future… you’ll be surprised. In 50 years a $100 could be worth 28,900 at a 12% ROI. In addition, stuff has a way of multiplying until it fills all available space. Some us have grown up never throw anything away and saving everything, from the mundane to the ridiculous. I’ve never understood storage sheds because they seem like such a rip off. If you don’t use your stuff often enough that it can sit in a storage shed its time to get rid of that junk.
How to Stop It: Break the habit of buying stuff and sell stuff you haven’t used in 12 months.

Interest on Debt
This silent killer works while you’re sleeping, on vacation, sick, and working. It works all the time no matter what. Try to avoid interest at all cost. You may be surprised to see how much interest you pay on different APRs each month.
How to Stop It: Rapidly pay off your credit card debt and switch to an all cash lifestyle.

Buying Brand New
The two things that come to mind here are brand new gadgets (technology) and buying brand new cars. These two things can take wealth from you quicker than you can say ‘iphone price drop’. Stay off the bleeding edge of technology and buy when a product is in its maturity phase, not while it’s in the early adoption phase.

If you’ve done your research you can negotiate on your next car purchase. They say the second you drive off the lot your new car losses 30% of its value. Some cars are more likely to depreciate than others. Typically the more deluxe cars depreciate quicker.

How to Stop It: Buy with cash and do your research. Find deals on craigslist and other classifieds for medium ticket items.

Inflation - The Hidden Tax
If you don’t protect yourself from inflation you will be in trouble when you retire. Inflation eats away at your wealth by deteriorating the value of the cash you hold. Because the government has a printing press they can print out as much money as they want. When they do this it ‘waters down the cool-aid’. When the cool-aid is too watery it’s pretty well worthless to everyone. On average you want to have a return on investment of at least 3% or higher each year just to stay above inflation. Cash in a high interest savings account just won’t cut it anymore.

How to Stop It: Buy stock in companies that are inflation resistant (i.e. they can raise their prices when they need to). Try to own real assets with real value (e.g. land, gold, property, rentals).

If you’re talking about hyperinflation that’s a whole different story.

Staying on the cutting edge of technology is costly. As CPUs become faster balancing cost and performance will help you get the best bang for the buck. If you don’t build your own computer please disregard this post.

The cpu chart on paulisageek.com takes the perfomance data from cpubenchmark and the pricing data from Newegg for the end ratio of performance/price. AMD tops the list for the best value and performance for the money. The ideal CPU costs between $70-100, any more or less then that and you’re not hitting the sweet spot.

Click here for up to date deals on computer parts.

Avoiding Current Phone Scams

That’s not to say there aren’t valid ways companies using telephones to contact prospects and customers. Keep in mind that phone companies sell your phone number to telemarketers. We set up a land line for the first time in years. Once we had a dial tone, and before anybody knew our phone number, we were getting telemarketers calling within the hours. The calls came frequently until we added our name to the do not call list.

Identifying Fraud
Never give out your credit card number on the phone.
Fraud on the phone usually are after one thing, your credit card number. They will use a number of techniques to extract this number for you. One tactic involves postcards and letters that indicate you’ve won a prize. When you call the 800 or 900 number you will be asked for your credit card number to claim your prize. Once they have your credit card number it goes down from there. Now that they have your credit card they have all the power and will use all kinds of pressure to close the sale. If you do end up buying something there is a good chance you’ll never receive it. If you do receive the product it will be extremely poor quality. The worst part is that the scammers have your credit card number and will likely change you multiple times. How can you avoid this problem?

Always Ask for written Information before you agree to anything.
The quickest way to shut down a scam is to ask them to send you some written information. If they are a legitimate charity or company they likely have whole departments that can fulfill your request. Scammers and high-pressure salesmen hate when you request things in writing. When things are in writing you can make sound decisions, which isn’t what they want.

If you suspect something fishy, get off the phone right away.
Be polite but assertive. If something doesn’t feel right about the call tell them no thank you (maybe a couple times) and get off the phone.

Call them back
If your bank or credit card calls you and asks for your credit card number or social security number tell them you’ll need to call them back. The the actuall customer service number from their website, phone book, or back of your credit card and call them back. Most financial institutions wont ask for your social (unless you’ve called them and have forgotten your account number). They won’t ask you for your credit card number out of the blue either.

Don’t tell them anything
Don’t tell them anything they should already know. If it’s your credit card company they should have everything in front of them. The exception to this rule is if you called them.

Avoid High Pressure Sells
If you feel you’re getting any type of pressure remember you have control. If you use a free phone service like Google voice you can send the sales calls to the disconnected message.

The Most Common Types of Scams

You’ve won a deluxe vaction!
These involve a combination of mail and phone fraud. First you will receive a letter saying you have won a vacation but you need to be a member to claim the prize. You’ll have to join with your credit card. Once they have you’re credit card… I think you know the rest.

Help us catch a bank scammer
This scam involves someone posing as a bank security examiner. They’ll ask you to withdraw some money and give it to someone that comes to your home. The persons job is to re-deposit it into your bank account. Once they have your cash…I think you know the rest.

Only smart investors are buying
…and if you’re smart, you’ll be buying too. Senior citizens are particularly vulnerable to these types of scams. Most likely there will be a ‘window of opportunity’ or ‘extremly limited time’ to take advantage of the investment. The investment will be described as a ’sure thing’ with returns well in excess of normal returns. Remember, excess profits come with excess risk. Some of these scams can go on for months before the scammer leaves town. Other times these scams can be ‘fly by night’ operations that hit and run. If something is too good to be true, it always is.

Magazine and newspaper subscriptions
Con artists will offer you a very low price on the magazine or newspaper subscription if you buy today with your credit card. Use one of the tactics described above and tell them to get a real job.

Conclusion
Hopefully this helps you avoid any future scams. If you feel you’ve been defrauded contact the following:

When investigating potential frauds, you should contact several of the following:

AARP (American Association for Retired Persons)
1909 K Street, NW
Washington, D.C. 20049
http://www.aarp.org
(800) 424-3410

The Federal Trade Commission
Bureau of Consumer Protection
600 Pennsylvania Avenue, NW
Washington, D.C. 20580
http://www.ftc.gov
(877) FTC-HELP

If you know of any more please leave a comment below.

Distinguish between wants and needs
Distinguishing between wants and needs depends a great deal on your perspective. The more narrow someone interprets their life, the more likely they are to rationalize some wants as needs. For instance, in high school someone could literally buy status and position by the brand of clothing they wear. In this myopic view teenagers tend to be rather passionate about the brand of jeans they wear (instead of being satisfied with any pair of jeans that covers their behind).

Widening one’s view allows wants to be exposed as wants. Needs hardly need justification to be purchased.

What are needs?
You can’t get through college without seeing Maslow’s Hierarchy of Needs. As you discover what your needs are consider Maslow’s approach. The only things in the diagram that are actual physical (or material) things are on the base of pyramid. The longer someone dwells in the lower level the less likely they are to move to higher levels. From my own life and watching others, the biggest problem comes when we try to fulfill a higher need by ‘purchasing’ it.

When wants become needs.
Consumer debt is a major problem in the United States. This type of debt represents a gluttony of wants justified as needs. One way to curb wants before they become needs is to switch to an all cash lifestyle. As this happens many of the items purchased with consumer debt are never purchased. Saving up to buy big ticket items allows time to make more rational decisions (and give you a chance to shop around).

What do you think?
What have you seen that helps prevent wants becoming needs? Please leave a comment and tell us what you think.

Stop Pre-Screened Offers

Link: OptOutPreScreen
Opt out of pre-screened credit card and insurance offers. Companies can no longer peek at your credit score to see if you qualify for their services. The less mail you receive like this the less likely your identity will be stolen. Your free credit report will show you which companies have pulled your credit report for a pre-screened offer.

Stop TeleMarketers

Link: National Do Not Call Registry
Most telemarketers should not call your number once it has been on the registry for 31 days. If they do, you can file a complaint at this Website. You can register your home or mobile phone for free.

Reduce JunkMail

Link: Direct Marketing Association
There are two kinds of junk mail, prospect junk mail and customer junk mail. If you’ve purchased something from a company you are forever considered a customer. You can opt out of prospect junk mail through the Direct Marketing Association (DMA) see the link above. Hint: Try the deceased person form in the right column. If you are a customer you need to contact each company directly to have your name removed.

Stay Anonymous

Link: iNumbr
Protecting Your Privacy. Talk without sharing your real phone number. Get a virtual phone number that will forward calls to any phone. Google Voice is also a good option if you don’t plan on using the number for a lot of transactions.

Link: 10 Minute Mail
Beat spam with the best disposable e-mail service.

Link: Fake Name Genorator
Gives you everything you need to fill out forms.

Bypass Compulsory Registration

Link: Bugmenot.com
Get access to restricted areas of websites with this service.

1) Pay off all your credit card balances. In 2009 all the credit card companies updated their terms and service agreements. Many of the changes had to do with new laws passed by congress. The laws were an attempt to help protect consumers that were trapped by credit card debt. The laws are also designed to protect consumers that are having financial hardship. But credit card companies are businesses that aim to make money. In the changes I’ve seen there are a few alarming changes: 1) Credit cards are moving to an adjustable rate on all new purchases, fixed rate cards are not very common any more 2) interest rates have increased across the board. This past week I had a credit card agreement increase the late payment APR to 29.99% variable. I haven’t seen that kind of rate in a long time. 2010 is the year to pay off all credit cards and switch to a cash lifestyle with pro-active budgeting.

2) Budget every dollar you spend. This is one thing we have done poorly on in year’s past. We been using Mint.com for 2009 and it’s opened our eyes to where our money is going. But budgeting is the next critical step for us.

3) Pay cash. When you buy your next car or new toy pay cash for it. Being able to save up and buy bigger ticket items with cash is a good way to get the best price on things you buy.

4) Start saving (automatically). Putting away $10 a paycheck is a good way to start saving if you haven’t already. It is suggested that you pay 10-20% of your income. Most banks will let you set up an automatic withdrawal if you need it. See this list of high interest savings accounts with updated rates for more information.

5) Setup an emergency fund. Learn how much is needed for an emergency fund an get started. Basically you’ll want to cover your basic expenses for three to six months.

6) Start another stream of income. The more sources of income you have the more stable you’re finances will be. In business if a company only has one big customer they are being exposed to a lot of risk. Expand your income streams in 2010 for an improved balance sheet. Ideally, you’ll want to start another stream of income that is low maintenance and something you enjoy doing.

7) Learn and/or Improve your skills and education. Learning a new skill or improving an existing skill is always a good investment. Invest in education, text books, audio books, lectures, and courses. Finish your degree or start an advanced degree. This is one of the best investments you could ever make. Subscribing to blogs is also another great activity (since they are free and have relevant, timely, information).

8 ) Help someone in need. It feels really good to help someone that needs help. Volunteer or give a neighbor a helping hand. Charities have been hit hard by the recession. Try to help where you can.

9) Grow a garden. If all you grow are a few plants a garden is a good way to save money and its good for the environment. Some people think its also therapeutic to take care of things and watch them grow.

10) Spend more time with family and friends. For the first time in many years families have pulled together during the recession. They have spent more time together and have gotten closer. As the economy improves keep that tradition alive in 2010.

11) Do some financial house cleaning. Visit the new year financial checklist and Dilbert’s guide to personal finance for some ideas. Some of the basics include: Update/write your will, get a free credit report, open an IRA with a discount broker,

Photography & Photoshop Alternatives

Sumo Paint

Photoshop Alternative

This is a fully operational photo editor, graphic design, and painting tool. The application works right in your browser without the need to create an account. Most of the features are beyond my skill level. Some of the images people have created are amazing. It doesn’t matter if you use Windows, Macintosh or Linux operating systems. All you need is Flash installed in your browser and you’re off to the races! It allows you to save in .jpg and .png formats. They also have a downloadable version which is $19. The Pro version comes with a lot of nice bells and whistles (which are probably over my head as well).

Note: Other great photo editors Pheonix by Aviary, SplashUp, PixelMator, rSizr,

One-Touch Photo Fixing

This application is like magic. Upload an image, click fix, and presto chango! Your picture looks much better. My wife looked at the example below and asked “Why did they take away her freckles? I like freckles.” If you have people in pictures with freckles this thing may clear them away.

Want an alternative to PicTreat? Try Picnik, FotoFlexer

Communication

Online Phone Service

If you are familiar with Skype you’ll love JAJAH. This IP service is free (in the USA) between account users. No need to install any software. There is no need to be stuck to a computer either. JAJAH connects two existing phones at the local level instead of charging long distance fees.

Online Faxing

The free service lets you fax 3 pages with an ad on the coversheet (which they create for you). Upload PDFs, Doc, or Docx files and press send! It’s that easy.

ScreenToaster - Online Screen Capture Software

After loading a Java Applet ScreenToaster works right in your browser. It is completely free and you can start recording without an account. Once the video is done you can upload your screen capture to ScreenToaster or YouTube. You can also save a hard copy of your video to the .mov or .swf file formats. Editing is no problem either. Now you can easily make a screen capture without downloading anything to your computer. Compatible with Windows, Mac OS X, Linux. Creating an accounts let’s you save videos to screentoaster directly. It also gives you access to their active community.

Note: For a downloadable app, Jing is awesome

TinyChat - Instant Video Chatting

If you like things that ‘just work’ you’ll like this application. Nothing to download. No complicated set-up process. Create your chat room and your mic and webcam take over. You’re live video, audio, and text feed are displayed for other members to see (you can turn your video and audio feed on and off). Blocking other users is also an option. Sign in with a TinyChat, Twitter, or Facebook account. The streaming quality is decent. When you create a new chat room it generates an small URL you can email to friends and relatives. As new people enter the room their video shows up just above the chat window. The video area will resize and adapt to the number of users with their webcam on. If you’d like to keep up long distant ties with friends and family this tool would be invaluable.

Note: For easy voice chatting try Voxli.

Combine Chat Accounts

Combine all of your chat accounts under one roof. Users can keep in touch with friends across dozens of IM platforms, including AIM, Yahoo!, MSN, Google Talk, MySpace IM, Facebook Chat, and more. Visit Meebo

Charts, Diagrams, & Flowcharts

Drag and drop simplicity and power. Create nice looking charts and flow charts to communicate the structures and processes you have in mind. LovelyCharts requires an account creation to start using their software. They require a name and email address. As a free member you get to save one project at a time. It is possible to export as many .jpg and .png charts as you’d like. The graphics that come pre-loaded with this app are professionally designed and charts come out looking high class. This is defiantly one to have in your arsenal.

Note: DrawAnywhere is a nice free tool too. Creately has a nice free edition with no limit on diagrams just space. Need an online whiteboard? Try Twiddla.

Browser Operating Systems

Browser Based Desktop

Ever forget an important file on your home computer? Have you ever wanted to show someone something but they didn’t have the software needed to show your file? This solves those problems and more. Upload files, edit, and login from any computer with an internet connection. The application comes with a host of common programs like spreadsheets, writing software, and more. The advantage of using a portable OS is that the software is the real software (not a watered down version). It may not make sense for the bulk of daily work but if you are traveling this could be a life saver. Visit StartForce

Note: There is also an opensource browser OS called eyeOS that is both lite and powerful. Google is also releasing ChromeOS in the middle of 2010. This is the next big step for personal computing.

Audio & Multimedia

Multi-track Audio Editing

In the past professional audio editing software has been expensive. With the advent of Garage Band from Apple and other open source alternatives these types of programs have gotten very reasonable. My first recordings were done on a cheaply made four track cassette recorder. Those days are gone and now you can mix a track in your browser. Chop, Loop, Stretch and Reverse a number of tracks. Perform fade-ins, apply none destructive effects, and throw some automation on those faders for the perfect mix. This software seriously rocks!

Edit Video Clips Online

Jaycut lets you upload and edit video files online for free. The interface is simple to use and understand. Go give it a try.

Office Suites - Word, Excel, PowerPoint Alternatives

Writer, Sheet, Presentation, & More…

While writing this post I could have just included this one link to Zoho and called it a day. They do everything a freelancer, student, or average user might need. They have a wide range of software solutions from writer, sheet, presentation, wikis, chat, CRM, invoicing and more. They could be your one stop stop for most productivity solutions. Everything they do is online and browser based.

Note: Google Docs is also very good. ThinkFreeOnline lets you open, view, or convert any office document without downloading any software. Writeboard let’s you collaborate on a single document for free.

Upload & Share PowerPoint Slides

This is a nice way to share your PowerPoint presentations online. In addition to being able to privately share your presentation you can also make it public. Embedding the slide show is the slickest way to publish online. You can record audio on top of each slide show to make a nice presentation/webinar. You will need an account to use the software.

Note: Prezi is a fun web app that changes the way slideshows are displayed.

Files & Data Stuff

File Conversion

Convert document, image, video, music, and compressed formats. Heck, they even convert between Auto CAD formats. Just about every file format of each type is supported. If you’ve ever been stuck with an odd file that you can’t open or read, this will save you. Using the software doesn’t require you to open an account. Although, opening an account lets you convert big files and store them for later.

One more thing, Zamzar can download and make a downloadable video file from YouTube. Good videos die young on YouTube.

Drag & Drop File Backup

DropBoks is a little website that allows you to securely store your files online. No bells and whistles, just simplicity. 1 GB in total with a limit of 10mb per file size. Use this for school papers and assignments, songs, pictures. This is like an online jump drive.

Need to send files up to 2GB? Try YouSendIt. If you’re into a downloadable app dropbox is cool. For a password protected place to store up to 25GB try SkyDrive from MSN; you will need a hotmail/msn account. Here’s a place that allows you to transfer 5GB with a link FileDropper

Edit & Combine PDF Files Online

Combine, edit, and make PDFs secure. Simply upload your PDF file(s) and PDF Hammer will let you go to work. No need to download or install anything. It works in your browser. Updating the PDFs meta data is also included. Start a new project

Personal Finance

Personal Finance Software

Track your spending across multiple accounts. Create a budget, view historical trends, and more. Mint is dead simple and free. Don’t spend money on personal finance software, mint.com does it for free.

Want another option, try JustThrive.com Their software will help you reach your saving goals. Also try, Wasabe

Just for Fun

Create & Share Floorplans

Floorplanner is the easiest, quickest, and best looking way to create and share interactive floor plans. Using point-and-click, drag-and-drop tools, you can make your house plan in minutes, and rearrange it as often as you want. Then you can save, send, and print your designs to share them, or place them on your own website.

Fast Online Dictionary

This is the fastest best online dictionary. Works just like it should without all the popups and ads on other dictionary sites.

Make & Share Custom Fonts

Create, share, and download completely custom fonts. You build your font design with their flash work area. Choose from a number of geometric patterns, shapes, and designs. Don’t want to spend the time making a font from scratch? Browse through the library of hundreds of fonts you probably have never seen before.

Make Small Images Big

Convert images like JPEGs, GIFs and PNGs to the crisp, clean, scalable vector art of EPS, SVG, and PDF. World class tracing software. Automatically traces over blocky bitmap lines and converts them to smooth vector lines/shapes. Free to try, no account required.

Create Scrapbook Pages

Scrapblog’s drag-and-drop tool is so easy that everyone can use it. They have a lot of cool ‘one click’ things that are really fun. You can create and download pages.

Paint your Home without Paint

Want more free stuff? Visit our lists of downloadable free essential software.

He went on to describe microfinance and the power of helping people that needed small amounts of capital to lift themselves out of poverty. Because of the nature of the loans and the social structures the re-payment rate is very high (well above 90%). In a small village many of these loans were taken out in groups. The group structure provided the needed pressure for individuals to pay loans back. Most of the loans were for a short period of time; less than 90 days.

The problem with microfinance came when he discussed the interest rate they charged on these loans. A one month loan would have a 10% fee. These kinds of interest rates are still the norm even today.

APRs over 120%….Are you kidding me?

This summit was attended by MBAs from the best schools in the nation. Mike Murray seemed like a very nice person and very intelligent. Why wasn’t anyone asking the question about the absurd interest rate? If the default rate was higher I could understand the lending rate being higher. An annual percentage rate of 120% being sold as “helping end poverty” seemed wrong to me.

I love the idea of microfinance and helping entrepreneurs in 3rd world countries. Are there any microfinance organizations that don’t charge “pay day loan” type fees and interest rates?

Primarily I wanted to see the difference between self made and inherited wealth. Inherited wealth always seems like a cheap way to be included on this list. Those people that inherited their wealth didn’t have to work as hard for their money. As I looked through the pictures and read the stories of each billionaire it became evident that those billionaires that inherited their money are less attractive than those that had to earn it. I know that is really shallow but go take a look for yourself. You’ll likely come to the same conclusion.

The other thing that stood out to me is that the only women on the list inherited their fortunes, none of them earned their fortunes. Take that as you will but the fact remains. In the future this may change. 60 years ago segregation and all kinds of social prejudice ran rampant. Only time will tell if this will change.

Lastly, I looked for any correlation between countries that fostered entrepreneurs (thus having more self-made billionaires) and the average income per capita. Using PPP (Purchasing Power Parity) as a guide to the average person’s wealth I found some interesting factors.

1)The middle east had more self made billionaires that what I would have expected.

2)The USA, Hong Kong, and the Middle East have about the same ratio of self made to inherited fortunes.

3)Europe and India both have similar ratios.

4)Russia surprised me by even making the list. Changing from a communist to a free market government would make any inheritance impossible. As the couple generations pass their ratio should change.

Copy of Excel File