Before things were cleared, I was very nervous as I also had a few other transfers scheduled around that time. Had the withdrawal gone through, I would have paid a lot of fees due to insufficient fund in my account. I also feel quite lucky that I checked my account that morning and did what had to be done. Fortunately, nothing really happened at the end because the stop order I placed on the withdrawal at BofA eventually worked and it stopped the transfer.

When the whole incident was over, I realized that I need a better way to notify myself for situations like this when the account balance drops to dangerous level. Because I never had any such incident before, I didn’t have such alert in place. Instead, I had relied entirely on my manual check of the account for years and that’s not really very reliable. What I did back in July was to set up several automatic alerts in my account that will send me an email when certain events happen, such as

• Available balance
• Account has insufficient funds
• Low balance threshold

The first alert emails me the account balance every morning so I know how much I have in the account without even logging in. The last two occur only when the account doesn’t have enough money. The second alert goes off when the balance is below zero. However, I don’t want to be informed only when there’s no money in the account. If that indeed happens, it is probably already too late. So I created the third alert with a balance threshold at $1,500, a level that requires me to replenish the account immediately.

While that was the first time that I set up bank alerts, I have been using credit card alerts for a long time. Alerts that help me manage my credit card bills include:

• Statement available
• Transaction exceeds a threshold
• Account balance exceeds a threshold
• Payment scheduled
• Payment reminder
• Payment not received
• Payment posted

Because I no longer receive any paper statement from credit card issuers, I rely on email alert to let me know when the monthly statement is available online for me to review. The second and third alerts are for situations when either a large purchase is posted in the account or the total account balance exceeds a threshold. Once receiving these alerts, I usually check the account right away to see if there’s anything unusual. The last four alerts are all related to credit card payment. To make managing my credit accounts easier, I have arranged to have all payment deadlines at about the same time, in the first week of the money, so I can schedule payments on the same day for all cards. Some card issuers, such as Chase, alerts me when a payment is scheduled, others like AmEX remind me when no payment is received xyz days before the due date. In addition to using these alerts, I also check my bank account to make sure that payments are indeed taken from the account when they are supposed to.

With these alerts, I have never missed a single credit card payment and never paid a late fee.

photo credit: apple 94

Original Post on The Sun's Financial Diary

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Recently, I’ve noticed many stores pointing consumers toward the use of online coupons. At first I thought the stores had lost their minds, I mean — showing me how to save money on your products? I know you are reimbursed by the manufacturer and all, but still … it seemed too good to be true.

The more I started to examine this trend the more I realized that it was, in fact, too good to be true because many online coupons aren’t worth more than the paper they are printed on.

How much does it cost to print that coupon?

The coupon sites that I tried used an entire piece of paper to print each little coupon. With printer ink costing up to .10 per printed page and paper coming in around a penny per page, you’ve already spent a good chunk of some of those coupons by the time you are done printing them. If you simply must have the coupon, make sure you set your printer for the lowest quality print and don’t be afraid to print the coupons on the back of junk mail, scrap paper — anything you don’t mind ending up in the cashier’s till.

How much does it cost to go to that store?

Before you print that coupon, ask yourself if the item you printed the coupon for sold at your local grocery store. If it isn’t, you will have to make a special trip to another store in order to buy it. If you have to make an out-of-your-way trip then you need to consider the cost of gas as an expense that detracts from the saving’s offered by the coupon. It might only add an extra couple of pennies but when you add that to the cost of printing the coupon, you are well on your way to saving nothing.

Hello, would you like a virus, spy or pop-up with your coupon?

Many of the coupon websites out there require that you install their proprietary, super-special, secret coupon making programs into your computer. With every mysterious program you install from the wide open plains of the internet, you risk getting a virus. And even if it is downloaded from a company or website you trust you may still be installing their spy program that facilitates customer-targeted pop-up ads on your machine. Not only is this extremely intrusive and annoying but, if you don’t know how to get rid of that junk on your own computer, it could cost you quite a bit of money to hire your neighborhood geek to take it off for you.

Will you use the items you buy?

You know those people who have pantries filled with things that they will never use but that they bought because they were on sale? Well, you could be one of those people — spending money you don’t need to spend on stuff you don’t even want — if you buy things simply because you have a good coupon for them. Only print coupons for those items you want to buy and know you will use within the next month.

Does the coupon make it cheaper than the store brand?

A dollar off coupon on a box of name brand cereal will not make it as affordable as the store brand. If you really want to be frugal, store brand items are almost always a better choice than a name brand item with a coupon. Many of these coupons are used to lure you into making a bad decision for your budget. Remember, if the coupon doesn’t reduce your overall average spending, then it’s not saving you anything — it’s costing you.

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I first knew Revolution Money more than two years ago when it launched a credit card, the RevolutionCard, which it claims can better protect cardholder’s identity by not printing name and account number on the card. I don’t know whether that claim has been proven or not, but I wasn’t very impressed by the card so I never thought about getting one. Then in early 2008, Revolution Money introduced another product, called Revolution Money Exchange, to compete with Paypal in the payment service business. This time, I jumped in and got an account for myself. Unlike the RevolutionCard which I don’t see any direct benefit to myself for using it, the Revolution Money Exchange has a very attractive feature: It doesn’t cost anything to send money between account holders. I don’t make a lot of money transfers online, except between my own bank accounts, but I don’t like that when somebody pays me $15 via Paypal, I only get, say, $14. What Revolution Money Exchange provides is exactly what I am looking for: No fee money transfer, though it doesn’t have the massive customer basis (Revolution Money has 400,000 consumers) as Paypal does.

Now that American Express is acquiring Revolution Money, I am wondering whether AmEx will keep Money Exchange free of fees for individual consumers.

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Those were the exact words I thought when my husband came home and shared with me what he saw his coworker doing. Each week she digs deep into her purse and purges it of all the loose change both in her wallet as well as the coins floating around in the bottom. And when I say “purge” I really mean “throw away.” Yes, you read that correctly: in the trash can, the garbage, with the refuse. My husband must have been anticipating my reaction because just as my jaw hit the floor, he pulled a small sandwich baggie from his pocket chuck full of coins.

I’ll admit it. I get tired of having my purse weighted down by lots of change, but money is money. Want to make the best use of your change? Here are some ideas to help you make every penny count:

Count it out, roll it up and trade it in

Skip paying for the rolls and visit a local bank instead. Most will give you complimentary paper rolls for just this purpose. If you have young children, this can be a great family activity. Picking up the coins helps improve fine motor skills. Counting out and grouping the coins helps reinforce mathematics skills. It’s also a great way to enable children to actively help the family’s bottom line in a very real way. (Not keen on all the counting? Employ the use of a Coinstar machine to do all the counting for you. Be warned, though, you will employ it by paying it a fee to the tune of 8.9%.)

Convert to bills without the counting

Think rolling coins or paying a fee is your only option? Think again. Some banks (especially credit unions) have machines that do all the counting for their tellers-and you-for free. Call your bank to find out if they’re one of them or check out TheUnderStory.com to find one near you that does.

Always keep 4 pennies in your wallet. Doing this can help you minimize the number of pennies you get back in return, leaving you with much more silver change which is easier to spend.

Give the ultimate gift to a coin collector

An old jar of coins can literally be the equivalent of a treasure chest to a coin collector, especially the junior variety. Give the gift that literally only costs you the change in your pocket and you’ll be giving the gift of a great treasure hunt.

Consider it forced savings or an emergency fund

I actually have a small tabletop, battery operated machine that automatically rolls the coins for me. Truth is, even after I accumulate a massive amount of rolls, I still don’t necessarily trade them in for bills. Instead, I keep them tucked away as a “ready-to-go” emergency fund. During times when things are especially tight, I quickly trade in a few rolls of coins for cash immediately in order to buy a few groceries. This enables me to stretch the food I’ve already got in my pantry, leaving my usual budgeted grocery amount to go towards paying for other, unexpected expenses. Another great way to look at loose change is to treat it as a sort of forced savings, similar to how others few tax withholding throughout the year. Forbid yourself to spend any change and instead collect it all. Watch how quickly a bit of change here and there can add up to help stash away a college savings or vacation fund without even trying.

photo credit: Nicholas Bonanno

Original Post on The Sun's Financial Diary

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I have been using Quicken Home & Business for investment tracking for years. It is a powerful and convenient tool that does a lot of other things than tracking stocks and mutual funds. However, the convenience comes with a price tag of $100. It’s not cheap for sure. If you only want to have a tool to manage your investments, then you don’t need Quicken. In fact, there are plenty of tools to help you do what you want to do for free. One of them is Google Doc.

I recently created a Google Doc Stock Portfolio Tracking Tool based on a Google Doc Template. What makes it easier to create such a tool with Google Doc is that I can simply use GoogleFinance functions to retrieve values I need. You can do the job with an Excel Spreadsheet, but then you will need to figure out where to get the data and so on. With Google Doc, a function call to GoogleFinance() is enough. Here’s how my stock portfolio tracker looks like.

In addition to the columns in the original Google template, I added Purchase Date, Purchase Price, Position, Daily Change, Total Market Value, and P&L into the spreadsheet. At the end, I also have total daily change ($ and %), market value of the entire portfolio, and profit & loss ($ and %). I have published the spreadsheet, so if you want to use it, you can download the spreadsheet and save it as your own copy.

Right now, the spreadsheet only has a few stocks I own. To track the stocks you own,

1. Delete rows from the top and only leave the last row (row # 4 as in the screenshot below);
2. Highlight the last empty row by clicking the row number from the leftmost (# 8 in the picture below);
3. Click Insert from the menu bar on the top and select Row Above;
4. Copy the last row that’s left in the spreadsheet from Step 1 and paste the entire row to the new row just created

Now that you have the new row with identical information as the last row, all you need to do next is replace Ticker Symbol, Purchase Date, Purchase Price and Position with the new stock you want to add to the spreadsheet. The spreadsheet then will automatically calculate the rest for you.

Remember, when you add new investments to the spreadsheet, always leave a blank row above Total and always insert a new row above the blank row and copy and paste the entire row to the new empty row you just created. Each row is only for one transaction, even if it’s the same stock (as I have two rows of C above).

I am sure there are other functions, such as Year-to-date return, etc., that can be added to the spreadsheet to make it more useful, I just haven’t figured out how to do it yet. If you have ideas on what to add, please let me know.

Original Post on The Sun's Financial Diary

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PerkStreet Financial is offering a PerkStreet Online Checking Account that allows account owners to earn cash back with their Visa debit card. Every time you use the debit card in non-PIN transactions, you can earn 1% cash back. Right now PerkStreet Financial is promoting the new checking account by giving each new customer who opens an account with $25 deposit a $50 bonus.

Online Checking Account

In order to receive the $50 bonus, you will have to make a deposit of at least $25 when opening the account. However, the checking account itself doesn’t have a minimum balance requirement. In addition, the free checking account also offers a free book of checks and free online banking and bill pay. The account does charge a monthly account maintenance fee of $4.50 if you don’t use your debit card even once in the month. If you use debit card more often than cash or credit card, this shouldn’t be a big problem. The monthly inactivity fee can be avoided if you do any of the following: making a transaction with your debit card, writing a check that clears the account, using online bill pay, initiating a withdrawal or making a deposit to the account.

You can also use the debit card to withdraw cash within STARsf network without paying a fee. If you use out-of-network ATMs, there will be a $2 fee for each cash withdrawal.

The Perks

With the PerkStreet debit card, you can earn 1% cash back for every dollar spent in non-PIN transactions. The cash back you earned can be redeemed for gift cards, free music or coffee. How’s how the cash back program works:

1% Cash Back

• Every $100 in non-PIN purchases earns you a dollar in perks.
• Every dollar perk you redeem gets you $1 on a PerkStreet Financial Visa Gift Card or a gift card from Target, Best Buy, Amazon.com, GAP or Ticketmaster.

Music

• Every $100 in non-PIN purchases earns you a song.
• Every song you redeem gets you $1 in credit at iTunes, Rhapsody or Amazon.com Gift Cards for MP3s or millions of other items at Amazon.com.

Coffee

• Every $200 in non-PIN purchase earns you a cup of coffee.
• Every cup you redeem gets you $2 in credit on a reloadable gift card from Starbucks, Dunkin Donuts, Peet’s Coffee and Tea and Bruegger’s Bagels.

About PerkStreet Financial

The PerkStreet Financial Debit Card is issued by The Bancorp Bank. According to the FDIC, The Bankcorp Bank is established on July 28, 2000 and has been a member of FDIC since July 28, 2000 (FDIC Cert: 35444). The bank is headquartered in Wilmington, Delaware and operates only one branch.

The bonus offer expires on December 31, 2009. To receive the bonus, in addition to the $25 deposit, you will also keep the account active for three straight months. The bonus will be deposited into your account within 15 business days of the end of the third month.

Original Post on The Sun's Financial Diary

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The day after Thanksgiving – traditionally known as Black Friday – is the day that unofficially kicks off the Christmas shopping season. Retail chains have worked hard to turn this into THE shopping event of the year by opening up stores in the early hours of the morning and offering plenty of doorbuster deals. Some even offer free breakfast!

With the economy still struggling to recover and unemployment rates at their highest level in decades, overall holiday sales are expected to be down but that won’t stop that throng of dedicated deal finders from loading up their carts.

If you’re one of those people, here’s what you can expect to find at some of the country’s largest retailers.

Target

Opening: 5:00AM

Deals: Target has been getting some press for offering a Westinghouse 32-inch LCD TV for $246 as well as select toasters and coffeemakers for $3. Additional deals on electronics such as HDTVs, DVD players, GPS units and cameras can net savings of up to 50%.

Extras: The store is offering a $10 gift card when you spend $100 or more from 5AM to noon on Friday.

Best Buy

Opening: 5:00AM

Deals: Many TVs will be 30% off. GPS units are 50% off. You can get up to 50% off major appliances and both the Playstation 3 and Xbox 360 are priced at $299.99.

Extras: How about your own safety? Learning from the recent disasters at stores like Wal-Mart, Best Buy will be handing out tickets for doorbuster deals guaranteeing the holder of that ticket the product ahead of time so there is no stampeding through the front door.

Kohl’s

Opening: 4:00AM

Deals: Up to 50-60% off jewelry, clothing and appliances and up to 70% off on housewares. Discounts of 50% can be had on some of their specially priced electronics.

Extras: “Early Bird” specials will run from 4AM to 1PM providing extra incentives on already discounted merchandise. Additionally, Kohl’s will offer $10 in “Kohl’s Cash” for every $50 spent.

Wal-Mart

Opening: 6:00AM on Thursday – In an effort to manage the crowds, many Wal-Mart retailers will open early on Thanksgiving and remain open 24 hours leading up to the deals starting at 5AM on Friday. Instead of waiting in the parking lot, shoppers will be able to enter the store and line up at in-store displays for the items they want.

Deals: Wal-Mart has been pretty tight lipped thus far about their Black Friday plans but it appears they’ll be offering deals on several smart phones with a two-year agreement including the AT&T Curve 8310 for free and the Bold 9000 for $78.88. HP notebooks for $298 also look to be on the list.

Extras: Like Best Buy, Wal-Mart has taken steps to manage the potential madness by opening Thursday instead of Friday. Given the negative publicity that came with a worker death last year, this should be a welcome change.

Home Depot

Opening: 6:00AM

Deals: Select power drills, nail guns and tool sets will be on sale for 50% off or more. Appliances like refrigerator/freezers and washer/dryer combos will be available for 30-50% off. Christmas trees and all the accessories will be on hand at deep discounts as well.

Extras: Don’t want to fight the crowds at the store? Try shopping Home Depot online and get free shipping on most orders over $49.

Toys ‘R Us

Opening: 12:00AM

Deals: You name it and it’ll probably be on sale. Bikes, video games and accessories, and electronics are all being marked down. You’ll find 50% off Razor scooters in addition to 50% or more off of selected VTECH, Little Tikes, Leapfrog, and Playskool merchandise.

Extras: You can get a $10 gift card with any purchase over $75. Plus, check out their “Biggest Big Book” for loads of deals that you can get before Black Friday.

Amazon.com

Opening: Monday, November 23rd – Amazon is replacing the Black Friday day with Black Friday WEEK. Starting Monday, you’ll find discounts on items like TVs, DVDs, Blu-Ray players and computers with deals continuing to be added throughout the week.

Deals: Amazon has been relatively silent about this year’s offerings but expect markdowns on everything from electronics to clothes to their trademark book selection. In fact, Amazon has already engaged Wal-Mart and Target in a price war by offering several new release titles for just $9.

Extras: Keep an eye out for the Gold Box where you’ll find discounts of up to 75% on specially marked items.

Sears

Opening: 4:00AM

Deals: In addition to digital cameras and GPS units, hot doorbuster deals this year consist of several specials on HDTVs including a Samsung 22-inch LCD TV for $249.99 and a Panasonic 42-inch plasma TV for $649.99.

Extras: Go online and enter the promo code “SEARS5OFF50″ to receive an additional $5 off a $50 purchase.

Original Post on The Sun's Financial Diary

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The IPO stock I bought today is Dollar General (DG), the discount retailer backed by Kohlberg Kravis & Roberts (KKR). With more than 8,700 chain stores mainly in the south and midwest,  DG is the largest retail store by the number of stores operated. Though items sold at DG are mainly priced around $1, the retailer is generating $10 billion in annual revenue with positive same-store growth for 20 straight years. Even in this tough economic environment, DG has increased its sales by 11% so far this year, according to IPOHome. Despite the growth potential, the stock, priced at $21 a share, is rather rich with its 26.9 price-to-earning ratio, higher than its competitors such as Family Dollar Stores and Dollar Tree. A Morningstar analyst said the stock is only worth $18 a share.

Anyway, I bought 83 shares of DG at $22.69 apiece at Scottrade.

Speaking of IPO stocks, my purchases so far are a mixed bag. On one hand, I got China Life (LFC) and Visa (V) on the day they were issued and they are doing very good. On the other hand, I also had Black Stone (BX) and Giant Interactive (GA) which are total disasters. Let’s see how DG will do.

Another stock I bought today is Boston Properties (BXP) through its direct stock purchase plan at ComputerShares. I have been looking at BXP for a long time, mainly for its dividend payout (currently at $2 a share), like other dividend-paying stocks I purchased through ComputerShares (except Bank of America which cut its dividend to 1 cent early this year after receiving massive bailout from the government). However, since BXP’s DSPP program requires $250 for each recurring purchase, I am not able to set up an automatic investing plan as I did with other stocks.

photo credit: Karen Apricot New Orleans

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Anyway, my investments are not what I want to talk about here. It’s the platform that allows ordinary investors to buy stocks traded on exchanges outside the U.S. Until last week, the only broker that lets investors invest in international stocks directly is E*Trade as far as I know. But now, it has a competitor. On October 30th, Fidelity introduced its own international stock trading platform as the appetite for investing in foreign stocks grows. The move puts Fidelity in direct competition with E*Trade. So how are these two compared against each other? I took a quick look at Fidelity’s new platform and the following are what I found.

Eligibility

I opened my E*Trade Global Trading account without any eligibility issue. At that time, I didn’t have any account with E*Trade and there was nothing that prevented me from getting the account. However, that doesn’t seem to be the case with Fidelity, which requires to have a non-retirement account  that trades 120+ times per year and $25,000+ in assets, or
$1 million in household assets. Well, I have to say that the requirement is very high for a small investor like me. I may like Fidelity better than E*Trade, but I am not eligible to have Fidelity International Trading account for sure.

Foreign Markets

If you are eligible for trading with Fidelity International Trading, then you do have a wider selection of foreign markets offered through the platform. In addition to Canada, Hong Kong, France, Germany, Japan, and United Kingdom that are available at E*Trade, Fidelity also provides investors access to six more developed markets: Australia, Italy, Belgium, Netherlands, Norway, and Portugal.

Commissions

My biggest concern when trading stocks is how much a trade is going to cost me, whether it’s a domestic stock or a foreign equity. I am always looking for the cheapest brokers. However, there’s no such thing as cheap in foreign stock trading. It cost me a lot to buy ICBC and Alibab with E*Trade.  Here how much Fidelity and E*Trade charge to trade in a particular market:

So basically, E*Trade charges a lot more in commission than Fidelity does. However, if you are like me, who wants to buy foreign stocks but don’t like a lot of money to meet Fidelity’s requirement, then E*Trade is the only choice, despite the high cost.

Currencies

When I bought those two stocks through E*Trade two years ago, I had to convert my fund into Hong Kong dollars before I could use the money to purchase the shares because E*Trade requires all trades be conducted in local currencies. At Fidelity, it seems that things a little more flexible as you can settle your trades in both local currencies and U.S. dollars. But, there is a price on settling with U.S. dollars. According to Fidelity,

If you choose US dollars as the settlement currency for your international stock trade, a foreign currency exchange fee (in the form of a mark up or mark down) based on the size of the currency conversion will be charged when the foreign currency exchange executes.

So you still have to pay for converting local currencies into U.S. dollars, not that Fidelity will do it for you for free. Thus, Fidelity recommends that if you trade in a particular market very often, it’s better to exchange “a certain amount of currency to avoid currency exchange fees on each trade”.

Currencies Exchange Fees

Since you may need to convert your U.S. dollar into the local currency before making a trade with either E*Trade (required) or Fidelity (recommended), another cost of buying foreign stocks is the fee that you pay to make the conversion. I wasn’t able to find the exact mark-up at E*Trade, but last time it cost me $11 to convert $1,000 to Hong Kong dollars. At Fidelity, the more money you convert, the less fee it charges. For $100K or less, the fee is 1.0% of principal. So if I exchange $1,000 into Hong Kong dollars, pretty much the same as what E*Trade charges. However, I am not sure whether the fee is also proportional to principal at E*Trade as the information is not available.

Well, from what I have seen, even though it costs more to trade with E*Trade, but it is still an affordable choice if you want to invest in foreign stocks unless you have a lot of money to be eligible for Fidelity’s International Trading.

Original Post on The Sun's Financial Diary

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But this year’s isn’t the only tax bill you should be thinking about. The planning and choices you make now could have a significant impact on how much you can be sheltering from Uncle Sam next year. Some decisions should be part of a normal yearly financial assessment and some you will need to address in the next month or so before you miss the boat altogether.

Here are five questions that you should be focusing on right now for 2010.

1. How much should I be contributing to my flexible spending accounts?

Health care and dependent care flexible spending accounts are some of the best deals the government has going.

These plans allow you to set aside money to pay for qualifying expenses free from federal taxes. For someone who places the IRS limit of $5,000 per year into a dependent care flexible spending account, that could mean hundreds of dollars in tax savings. But be careful how much you commit. Any unused money left in the account at the end of year is forfeited.

Individuals are generally only able to sign up for the flexible spending account as part of their employer’s open enrollment period so if you don’t sign up for it now you’ll have to wait until next year.

2. Should I choose the regular or high deductible health plan at work?

This one requires you to do some forecasting of what your medical expenses will be. Unfortunately, that will always be more art than science.

People are enticed by the high deductible plan due to the lower monthly premium they’ll have to pay out of pocket. The drawback is that you’re on the hook for a higher deductible before insurance starts covering your expenses. One medical procedure or trip to the hospital and you could find yourself with some significant bills.

If you’re young, healthy, and don’t expect a need for health services in the next year, the high deductible plan may be a good way to keep a few extra dollars in your pocket.

This is another choice you’ll need to make before your employer’s open enrollment period ends.

3. How much can I contribute to my 401(k)?

In terms of retirement planning, the answer to the above question should always be “as much as possible”. The same answer also applies when it comes to tax planning.

Traditional 401(k)s have the added benefit of reducing your taxable income. The IRS sets an annual 401(k) contribution limit of $16,500 (and higher for those over 50) so someone in the 25% bracket could save over $4,000 on their taxes by maxing out their 401(k).

If the prospect of maxing out your 401(k) seems too much, try the incremental approach of raising your contribution by 1% every three months until you get there.

4. Do I have any losers among my investments?

In light of the recent recession, odds are you have some. When selling them, the losses can be used to offset any capital gains you’ve incurred during the year or some of your taxable income.

The sale needs to be made in the year you want to take the loss for tax purposes. Preparing a plan ahead of time can help put some of those losses right back in your pocket.

5. How much do I plan on donating to charities?

Making a donation to charity may be the easiest way to lower your tax burden.

If you itemize, the money you give will offset any taxable income you have. Donations could be in the form of cash, cars, stock or any of a number of other things that a charitable organization will accept.

Give a gift to charity and keep a gift for yourself in the form of a tax write-off. What better deal is there than that?

Original Post on The Sun's Financial Diary

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After long delays, I finally opened the account in July. The process is a little bit longer than other bank accounts, but not tricky. There are five steps in the opening process.

At first, you will need to select the type of account you want to open. EverBank offers a quite few banking and investing accounts for you to choose from, including Money Market account, Checking account, CD account, World Currency account and investing accounts. If the Money Market Account is what you want to have, select it from the list accounts available.

Once you selected the account, you will need to provide personal information in the next step. All the information are pretty standard, such as your name, address, email, employment, etc. However, EverBank does conduct a credit inquiry as part of the procedure to verify your identity. You will be asked to answer a few questions based on your credit history, which is retrieved from your credit report during the process.

Not every bank verifies a new customer’s identity through credit inquiry. In the case of EverBank, the credit inquiry is a hard inquiry as it will show up in your credit report, even though it will be different from those when you apply for a loan or credit card. As EverBank puts in their Q&A section:

What kind of inquiry does EverBank obtain and how will it affect my credit score?

EverBank obtains a credit inquiry for the purposes of opening an account. While such an inquiry will show on your credit report, it’s coded differently than an inquiry for a loan and would have less of an impact on your credit score.

So even though it is a hard pull, it won’t affect your credit score that much, if any. However, if you are concerned about the impact on your credit, you can stop the process right there.

After your identity is verified, you will proceed with your application by selecting how much you want to put in your account as initial deposit and how you would like to fund your account. To avoid monthly account maintenance charge ($8.95 a month), you will need at least to have $5,000 in your account, but the minimum balance required to open the account is $1,500.

There are several ways to fund the account, including ACH, which is the method I chose. If you also choose to ACH, you will need to provide your bank’s name, routing number, and account number. Before you can use ACH to transfer funds between your EverBank account and external accounts, EverBank again needs to verify your ownership of the account by making two small trial deposits into accounts to be linked to EverBank. That will take a couple of business days.

After you finished the online application, your account won’t be active until you send a printed form with your signature back to EverBank to complete the process. EverBank will send you an email once they receive the paperwork to let you know that the account is now active. That will take some time, depending on how fast they process your paperwork. For me, it took about a week, so it isn’t too bad.

Oh, one more thing. During the online application, you will not be able to set up access to your account. Rather, you will have to enroll in online banking after the online application is completed. To set up your online account access, you will need to provide your account number.

Well, this is the whole process of opening a savings account with EverBank. As I mentioned earlier, the process is a little bit longer than what other banks have and it asks you to mail the application back to the bank, plus a hard credit inquiry. If you think you EverBank is the bank you want to have, the bank is actually pretty good after going through the application process.

Original Post on The Sun's Financial Diary

Special bonus offers

• OptionsHouse 100 Commission Free Trades
• Lending Club $25 Sign Up Bonus
• TradeKing $50 New Account Bonus in November
• CollegeAdvantage $50 Bonus

1. You deserve to have whatever you want, even if you can’t afford it

You work hard, don’t you? Okay, well, even if you don’t work hard what does it matter? We are here to enjoy ourselves and withholding cool toys, cars, gadgets and handbags from our lives is not enjoyable. You are an adult now and, as such, you make the rules for your life. There are no more parents making you do stupid things like eat healthy, go to work on time, or save money. Don’t let your budget become a surrogate parent — show it who’s boss and get what you want — whether you can afford it or not.

2. It’s fun to always get what you want immediately upon wanting it

If you want something, you should have it immediately, almost as if there is a genie in a bottle on your living room table just waiting to answer your call. If you think about it, waiting to get something until you have saved enough money is always very uncomfortable. There is no fun in the whole process because you spend all that waiting time NOT enjoying the cool new item. When you get everything you want immediately, your life is filled with fun experiences that you never have to earn and whose novelty NEVER runs out.

3. Working for things is boring and makes you feel used

Earning the things you want is for suckers. There is no reason why you should have to go out and earn money to buy the things you want—you should just put them on a credit card. This isn’t the third grade and you don’t need any gold stars to show what a good little worker you are. After all if you don’t pay the credit card bill, who cares? They’ll just charge it off or…something…

4. Stress over finances can’t be as unhealthy as everyone says it is

You’ve heard it all — ulcers, high blood pressure, insomnia, weight gain — sheesh, is there any medical illness that isn’t attributed to stress over finances? It can’t be all that bad. Look, millions of people live paycheck to paycheck each week and just skate by on what they are earning and they don’t all end up sick all the time…or at least…they don’t talk about it if they are. They don’t worry about boring stuff like emergencies, retirement and college savings — why should you?

5. You CAN have everything you want if you just rationalize it enough

There are about a million ways you can make yourself think you can afford something. You can tell yourself that you won’t go out to eat next month (even though you know it’s not true). You can tell yourself that this is the last splurge you’ll have until Christmas (even though you already plan on splurging again next week). You can tell yourself that your budget will be back on track in a couple more weeks, so this won’t be a big deal (even though you have been telling yourself for the past year or two but it never seems to actually get, “back on track”). Just tell yourself whatever you need to hear to make it okay and then spend!

photo credit: ladybugbkt

Original Post on The Sun's Financial Diary

Special bonus offers

• OptionsHouse 100 Commission Free Trades
• Lending Club $25 Sign Up Bonus
• TradeKing $50 New Account Bonus in November
• CollegeAdvantage $50 Bonus

• Get a 1.70% Annual Percentage Yield on balances of $2,500 or more.
• Get a 10% bonus on your interest earned four times a year. Just open and use your Capital One credit card at least once a month or keep an average balance of $15,000 in your savings account each month to qualify.
• No Fees
• FDIC Insured

Original Post on The Sun's Financial Diary

Special bonus offers

• OptionsHouse 100 Commission Free Trades
• Lending Club $25 Sign Up Bonus
• TradeKing $50 New Account Bonus in November
• CollegeAdvantage $50 Bonus

I got my free subscription of both the BusinessWeek and Forbs last time when the free offer was available early this year, so the deal is real. Now it’s alive again, so if you are interested, you can use this link to get the free magazine if you want to have it. All you need to do is taking a few minutes to finish a short survey about MP3 players.

Original Post on The Sun's Financial Diary

Special bonus offers

• OptionsHouse 100 Commission Free Trades
• Lending Club $25 Sign Up Bonus
• TradeKing $50 New Account Bonus in November
• CollegeAdvantage $50 Bonus

Anyway, since I already have an account, I won’t be able to take advantage of this offer. But if you are interested in getting the free trades (valued at $295), here’s the information you need to open an account.

There are a total of nine steps to go through in the process. At first, you need to select the type of account you want to have, individual or joint account. Then you will need to create a profile by providing your email address and selecting a user name and password. You will use the user name and password to log into your trading account once it is established. The other information are pretty standard, such as employment and financial information.

After you agree the terms and conditions, you will need choose how to fund the account in the next step. OptionsHouse offers several options to make deposit to the account, by wire, ACH, check or ACAT account transfer (OptionsHouse can reimburse up to $100 account transfer fee). If you are not planning to transfer your account from another broker to OptionsHouse, then ACH may be a better choice. To set up ACH, you will need your bank’s routing number and your account number. And as you know, it takes some time to set up ACH transfer. OptionsHouse uses trial deposits to verify bank account ownership which takes a couple of business days.

The online application process is rather simple, but the application isn’t completed yet. Once you finish the online process, you can log into your account immediately. However, you will need to printout you finished application form and fax it to OptionsHouse before your account becomes active. If your account isn’t active, you won’t receive real-time streaming quotes (of course, your account also has to be funded).

Now that you know the whole process, are you ready to open an OptionsHouse account and get the 100 free trades?

Original Post on The Sun's Financial Diary

Special bonus offers

• OptionsHouse 100 Commission Free Trades
• Lending Club $25 Sign Up Bonus
• TradeKing $50 New Account Bonus in November
• CollegeAdvantage $50 Bonus

In the latest job report, the government said that the nation’s monthly unemployment rate reached 10.20%, the highest level in more than 26 years. For a long time, we have been warmed that the unemployment rate may reach double-digit, but it seems that it came a little earlier than expected.

Despite the huge amount of money the government has spent to pull the economy out of the deepest recession in 70 years, the job market is still very weak. In October, U.S. employers shed 190,000 non-farm positions. The number of jobs lost in a month is the lowest so far in 2009, but the number of unemployed person increased 558,000 in October, pushing the total number of people without a job to 15.7 million. Since the recession began in December 2007, more than 8.2 million workers have lost their jobs.

The economy may be recovering (GDP grew 3.5% in the third quarter), but we probably won’t feel any real improvement until we all have jobs.

Original Post on The Sun's Financial Diary

Special bonus offers

• OptionsHouse 100 Commission Free Trades
• Lending Club $25 Sign Up Bonus
• TradeKing $50 New Account Bonus in November
• CollegeAdvantage $50 Bonus

Early this week, Charles Schwab, who introduced Schwab S&P 500 Index Fund in May with 0.09% Expense Ratio (ER), launched its first batch of exchange-traded funds that are again featured with super-low expense ratios. Four ETFs debut this Tuesday are

• Schwab U.S. Broad Market ETF (SCHB): Index - Dow Jones U.S. Broad Stock Market Index; ER - 0.08%
• Schwab U.S. Large-Cap ETF (SCHX): Index - Dow Jones U.S. Large-Cap Total Stock Market Index; ER - 0.08%
• Schwab U.S. Small-Cap ETF (SCHA): Index - Dow Jones U.S. Small-Cap Total Stock Market Index; ER - 0.15%
• Schwab International Equity ETF (SCHF): Index - FTSE Developed ex-US Index; ER - 0.15%

So how are these ETFs compared against similar offerings from Vanguard?

• Vanguard Total Stock Market ETF (VTI): ER 0.09%
• Vanguard Large-Cap ETF (VV): ER 0.13%
• Vanguard Small-Cap ETF (VB): ER – 0.15%
• Vanguard Europe Pacific ETF (VEA): ER – 0.16%

Well, Schwab’s ETFs are cheaper, but the difference isn’t that significant (percentage wise it is) except the large-cap ETFs. However, the Vanguard funds have already established a track record (at least two years) in terms of returns. For the new funds at Schwab, there’s no way to evaluate the performance. So I won’t be jumping in any of these funds right away, despite the lower expense ratios.

In addition to the fee charged by the fund in the form of expense ratio, the other part of the cost of owning ETFs is the commission charged by brokers to invest in ETFs. Since ETFs are traded on exchanges the same ways as individual stocks are, buying and selling ETFs usually involve commissions, anywhere from $2.95 per trade to $10+ depending on which broker you are using. That’s why you can dollar-cost averaging mutual funds from fund providers (if you buy mutual funds from a broker, you may also have to pay a fee), but can’t DCA ETFs. However, there’s an exception for these Schwab ETFs if you also use Schwab as your broker because it appears that you can get these funds with zero commission. If you don’t have to pay any commission, then buying ETFs regularly with a small amount makes sense.

Original Post on The Sun's Financial Diary

Special bonus offers

• OptionsHouse 100 Commission Free Trades
• Lending Club $25 Sign Up Bonus
• TradeKing $50 New Account Bonus in November
• CollegeAdvantage $50 Bonus

Even though that I-Bonds purchased in the past six months didn’t earn me anything, I still kept my monthly purchase of $100 I-Bone intact because the investment was made through an automatic purchase plan and I was too lazy to cancel the orders that I planned for many years. Plus, since most savings account interest rates were below 2% during that period of time, it wouldn’t make much difference if I put the $600 somewhere else. So I decided to avoid the hassle and stick to my plan.

Now, six months later, a new I-Bond rate is announced for the next six months from November 2009 to May 2010 and it is too bad, at least for six months. According to the Treasury, the total earning rate for I-Bonds from November 2009 to May 2010 is 3.36%. The rate for I-Bonds consists of two part: A fixed rate plus an inflation adjusted rate. Of the 3.36% rate, 0.30%  is fixed throughout the life of the bonds, which is 30 years.  The inflation adjusted rate is 3.06%, not too bad but it lasts only 6 months.

I have been buying I-Bonds for more than 6 years, but I never maxed out (I believe putting the money in the stock market will give me a better return). Since I don’t have any bond mutual funds in our taxable investment accounts, I treat the I-Bonds I own as the fixed income portion (which they really are BTW) of our investment portfolio, even though I never really considered it in the asset allocation. However, I do want hold them for the long term

Original Post on The Sun's Financial Diary

Special bonus offers

• OptionsHouse 100 Commission Free Trades
• Lending Club $25 Sign Up Bonus
• TradeKing $50 New Account Bonus in November
• CollegeAdvantage $50 Bonus

As the stock market did poorly last month, so did our net worth as we have a large portion of our assets invested in the stock market. Fortunately, we got a huge boost from the proceeds of selling our house. So October still turned out to be a very good month for us as we saw our net worth grew $90, 460.66 (12.45%) from the month before to $817,099.39, another record high for us.

The following is the breakdown of the net worth:

• Credit card balance(++): The total credit card balance increased another $308.71 (5.01%) last month to $6,468.15. The increase is entirely due to the whole month of tuition we charged on our credit card. Without that, the everyday charges is actually less than the previous month as we settled in our new home in Virginia. BTW, more than $1,800 of the credit card balance is from 0% loan. Subtracting that and the monthly tuition, we only charge about $2,700 a month for our daily expenses.
• Cash(+++++): This is where the positive gain came from. We finally sold our house last month and received the payment of about $96K at the end of October after commissions and fees. Since we have lived in the house for more than 5 years and have done some upgrades, we actually didn’t make any from the sale. But we are glad that we sold the house in the tough market. At the end of October, we have $220,480.31 in our bank accounts. That’s an increase of $105,370.60 (91.54%) from the month before.
• Taxable accounts(–): Our investments in taxable accounts didn’t do very well last month, in line with the performance of the general market. At the end of the month, the total market value of our taxable investments is $293,632.16 in various brokerage and mutual fund accounts. That’s was $4,009.63 (1.35%) less than what we had a month ago. Initially, I thought I may be a few IPO shares last month, but that didn’t happen. The only new investments made in taxable accounts last months were monthly mutual funds purchase of $600 and $400 in DRIP stocks.
• Retirement accounts(—-): It kind of surprised me that the biggest loser last month is our retirement investments, despite that we made our last quarterly contribution to our IRA accounts this year. Overall, we lost $11,055.97 (4.00%) on paper in our 401(k)s and IRAs. The total market is $265,006.36 at the end of October. The good news is that we now both contributed to the maximum amount allowed in our IRA accounts.
• 529 plans(+): We got a few more bonuses last month from the Ohio CollegeAdvantage 529 accounts referral program (see how you can get $50 bonus from CollegeAdvantage), which helped this part of our investments to stay positive. On October 31st, we had $25,844.11 in 529 accounts, an increase of $238.03 (0.95%) from September.
• Bonds(+): Our investment in bonds grew $154.68, (0.95%) last month to $16,384.24.

Year-to-date, our net worth has increased $344,339.08 (72.84%). Year-over-year, the net gain is $351,162.66 (75.37%).

Now that our *old* house is gone, we want to buy our next *new* permanent place next year before our current lease expires in September. For that, we have been saving quite aggressively for the downpayment, with a large portion in our savings accounts. Our goal before we buy the house is to have $1 million in net worth and $300K in cash for next house. To reach that goal, we will need to increase our net worth by a little short of $200K in about 8 to 10 months, which is quite ambitious. Is the goal reachable? I think we have a good chance given that we had increased our net worth by more $250 in the first 9 months of this year. Of course, we have to get a lot of help from the stock market to reach $1,000,000 next summer

Original Post on The Sun's Financial Diary

Special bonus offers

• OptionsHouse 100 Commission Free Trades
• Lending Club $25 Sign Up Bonus
• TradeKing $50 New Account Bonus in November
• CollegeAdvantage $50 Bonus

Firstrade Commission

Firstrade, as a leading online discount broker, offers investors a wide range of investment products, from stock and options trading to mutual fund and fixed income investments. When I first opened my account with Firstrade, I was actually attracted to it by its free mutual fund trading. Unfortunately, that’s not the case any more.

The cost of trading with Firstrade is rather high compared with what other discount brokers charge. For example, the commission for stock trade is $6.95 at Firstrade, which is lower than Scottrade’s $7.00 per trade, but significantly higher than Zecco’s $4.50 commission and TradeKing’s $4.95. Options trading at Firstrade will add another $1.95 per contract, where at Zecco and TradKing, the extra cost is $0.50/contract. However, Firstrade does have an edge over these brokers when it comes mutual fund investment: Firstrade $9.95, Zecco $10.00, TradeKing $14.95, and Scottrade $17.95 for each no-transaction fee mutual fund order.

Firstrade Trading Platform

So what can you expect to see when you first log into your Firstrade account?

Firstrade’s main website isn’t very impressive and I find it also not very useful. At the main account page, I expect to see the status of my account and my holdings so I can have a clear idea of how my account is doing. But that’s not the case with Firstrade, as you can see from the above screenshot. What I really don’t like about Firstrade’s account main web page is that the Important Notices section, which is supposed to list important announcement to users, takes a large space right in the center of the platform. I don’t find those notices very important at all and many of them are outdated and rarely updated. In my opinion, that place can be used for information that’s more useful for investors.

Overall, I can’t do much on the account homepage alone because, as you may have noticed, what displayed on the homepage are not all related to trading, or even investor’s personal account information. There are only four pre-determined indices and two index charts to display. There’ s a list of stocks to watch, but it looks like I can only enter up to seven symbols. There’s even no list of positions on the homepage, only an account number with the current market value.

Other Tools

If you want to make a trade, you will have to go to a different page to place your order by entering transaction type (buy or sell), symbol, shares, and order type (market or limit). This is the same as most other web-based trading platforms. Though there’s no streaming quotes on its homepage, Firstrade does have another tool, called X-Stream, that provides real-time streaming quotes, which can launched by clicking the Real-time Streaming on the top right corner of the main page.

Firstrade’s java-based X-Stream tool allows you to track up to 20 stocks simultaneously (I’d say 20 is a quite small number). Every field and color is fully customizable and all quotes are updated in real-time as the market moves. In addition to quotes, you also have access to streaming charts with real-time technical analytics, streaming time and sale information, quick order entry, company profiles, and many other features. What I find weird is that though there’s a TRADE button in X-Stream, I can’t really trade from it. If I click the button, it takes right back to the same web page to make the trade. Not very convenient at all.

In addition, Firstrade also has another tool that allows you to track multiple portfolios in real-time and updates your profits or losses on each position and the entire portfolio in real-time without having to refresh. It’s called MarketAce Portfolio Manager. MarketAce shows you to track each stock’s performance for that day and from the purchase price. You can specify your portfolio name and customize all the positions for each portfolio. You may also enter the cash balance of your portfolio to get the total value of your account updated in real-time. This is a unique tool to Firstrade as far as I know.

So overall, Firstrade isn’t very competitive in terms of trading cost, unless you also want to buy mutual funds through the broker. However, it does have some features that you won’t find at other brokers. If you are interested in trading with Firstrade, the broker is running a triple-bonus promotion that will give you 100 free trades when opening a new account, plus $100 account transfer reimbursement (if you transfer from another broker to Firstrade) and $100 cash back, depending on your account value. Check it out to get more details on how you can earn the bonuses.

Original Post on The Sun's Financial Diary

Special bonus offers

• OptionsHouse 100 Commission Free Trades
• Lending Club $25 Sign Up Bonus
• TradeKing $50 New Account Bonus in November
• CollegeAdvantage $50 Bonus

Drew at 21 and Heather S at 38. Congrats to the two lucky winners! The Quicken software you won will be mailed to you shortly.

Weekend Readings

And some interesting reads from The Money Writers and beyond:

• How to Keep a Customer Happy
• Thoughts On Technical Analysis of the Investment Markets
• Economically Shopping For Christmas Toys
• How to Satisfy Your Need for Books and Movies Without Spending a Fortune
• What if You were Required to Share your Finances?
• The Dreadful Bill Collector – How to Handle Them
• Variable Annuities Overview
• Earning Interest and Dividends on Someone Else’s Dime
• Restaurant Meals You Can Make at Home For Half the Price
• 9 Great Gifts to Give Without Blowing Up Your Budget
• Poor Financial Planning For College Will Cost You
• Downsides of Automated Finances

Original Post on The Sun's Financial Diary

Special bonus offers

• OptionsHouse 100 Commission Free Trades
• Lending Club $25 Sign Up Bonus
• TradeKing $50 New Account Bonus in November
• CollegeAdvantage $50 Bonus

I opened the account in June when I found that it charges only $2.95 per stock trade, much less than other brokers I use (Zecco offers free trade, but the requirement is rather high for small investors). However, it disappointed me when I found during my first trading experience that the broker required at least $100 be kept in the account to cover commission cost. I even wrote a post to complain about what I saw as a unfair and unnecessary requirement. Later on, OptionsHouse, after hearing similar complains from other investors, decided to remove the $100 minimum requirement, which was a welcome news as it means that every dollar in the account can be used to buy stocks. And at $2.95/trade, the commission is the lowest among other popular online discount brokers such as Scottrade, TradeKing, or Firstrade.

If you are considering open an OptionsHouse account, now there’s a good opportunity for you to do so. The broker is running a promotion for November and December which will give each new customer 100 commission free trades when a new account is opened during the promotion period with a minimum of $3,000. Sure, the account minimum is higher than what it usually requires for a new account at $1,000, but the value of the 100 commission free trades equals $295, so it’s still a very good deal if you have the money to meet the minimum requirement. One more restriction of this promotion is that the free trades have to be used within 60 days. That’s a lot of trades you will have to make in just two months to take the full advantage of the promotion if you are not a heavy trader.

Anyway, if you can use those free trades, or even a portion of it, you must use this link to open an account using promotion code FREE100 and fund your new account with $3,000 within 45 days of account opening in order to receive the bonus free trade. This offer will expire on December 31, 2009.

To learn more about OptionsHouse, check out my previous post on OptionsHouse review and first trading experience for details.

Original Post on The Sun's Financial Diary

Special bonus offers

• OptionsHouse 100 Commission Free Trades
• Lending Club $25 Sign Up Bonus
• TradeKing $50 New Account Bonus in November
• CollegeAdvantage $50 Bonus

I  have a bunch of brokerages accounts myself. Though I no longer actively use every one of them now, I did try every one in the past to make a trade. And from my experience, transferring fund from my bank account to the brokerage account and using the money to purchase the stock I want on the same day is NOT possible at other brokers except Scottrade. As far as I know, brokers like TradeKing, Firstrade, and Zecco are all having electronic fund transfer (ACH) as an option to fund the account. However, the ACH fund transfer all requires a period of holding times, from 3 to 5 business days. This means that you have to wait 3 or 5 business days for the fund to be cleared before you can use it to buy the stock today at today’s price. But even 3 business days later, the price may not be acceptable anymore.

When it comes to funding the trading account, Scottrade is quite unique. The system it uses, called Money Direct, is also an ACH system like what other brokers use (meaning that you have to follow the same procedure to setup the Money Direct as you do with ACH: bank routing number, your account number, etc.). However, with Money Direct, fund is available almost immediately and can be used to buy stocks that are priced $4 or more. This is one restriction on using the fund to buy stocks in cash account. If  you have a margin account and want to use the fund to satisfy margin sell letter, then you will have to wait for 3 business days, or if you want to buy stocks that are below $4.

Early this year, I bought quite some cheap stocks through Scottrade and most of the time, I had to use Money Direct to transfer money to the account first before making the purchase because I didn’t have the money in the account (I don’t want to have any significant amount of money in the account). It was impossible with other brokers.

Another reason why I trade with Scottrade

BTW, if you decided to open a Scottrade account, use promo code KGKP0724 to get 3 commission free trades.

Original Post on The Sun's Financial Diary

Special bonus offers

• OptionsHouse 100 Commission Free Trades
• Lending Club $25 Sign Up Bonus
• TradeKing $50 New Account Bonus in November
• CollegeAdvantage $50 Bonus

Now it seems that Prosper is back, finally. While I am quite with happy with the performance I have with Lending Club so far, a little competition is always good, even in the P2P lending business.

Speaking of competition, Prosper is now offering $50 bonus to lure more lenders and borrowers. I have opened my Prosper account a long time ago. However, because of my previous resident status, I wasn’t allowed to invest, the same as what happened to Lending Club before. Then after updating my address to Virginia the other day, I got my $50 bonus and am eligible to lend directly It basically doesn’t require anything to get the bonus, except one Financial Suitability Requirement, which is like this:

The Notes are being offered only to a lender (a husband and wife are treated together as one lender) who satisfies the suitability requirements set forth below. You must meet one or more of the suitability requirements (a-b) in order to purchase Notes from Prosper.

1. I have an annual gross income of at least $70,000 and a net worth as set forth below, of at least $70,000, and I will not purchase Notes that in the aggregate, exceed 10% or more of my net worth as set forth below, or
2. I have a minimum net worth of $250,000 and I will not purchase Notes, that in the aggregate, exceed 10% or more of my net worth as set forth below.

Note: Net worth is calculated exclusive of home, home furnishings and automobiles, and Lender members may not value assets included in the computation of net worth at more than their fair market value.

The bar seems to be a little high and I don’t remember I saw the same requirement at Lending Club. If the requirement doesn’t prevent you from becoming a lender, then open a Prosper account and get the $50 free money. I haven’t invested my $50 yet as I haven’t got time to go through Prosper’s lending process. But I do plan to use the money to test the water soon

Original Post on The Sun's Financial Diary

Special bonus offers

• OptionsHouse 100 Commission Free Trades
• Lending Club $25 Sign Up Bonus
• TradeKing $50 New Account Bonus in November
• CollegeAdvantage $50 Bonus

News came out this morning that GMAC, the recipient of billions of dollars of taxpayer money since last December, is going back to the government to ask for more money. That would be the third round of bailout for what used to be the bankrupted General Motor finance unit (GMAC Financial was approved to be a bank holding company in December 2008 for it to receive government rescue fund). This is quite unique for GMAC because no other banks, not even Citigroup and Bank of America which have received much more money from the government than GMAC did, have asked for more than two bailouts. At GMAC, however, the trouble doesn’t seem to end, even after $12.5 billion infusion from the government. You may think that a bank receiving so much taxpayer money should have a better chance of surviving when there are signs that the condition of the economy and the financial market is improving. Unfortunately, that’s not the case for GMAC, which is still struggling to deal with massive losses from subprime mortgages. Now it’s going to ask as much as $5.6 billion more.

While GMAC is still in trouble, its subsidiary, Ally Bank seems to be doing quite well, at least from the rates it offers (Online Savings Account 1.70% APY, 1-year CD 2.00% APY). Actually, the bank has been giving exceptionally high rates since it switched its name from GMAC Bank to Ally Bank six months ago. Today’s news makes wonder how Ally Bank can afford to offer such high rates (Bankrate.com average 1-year CD rate is 1.70% APY). And Ally Bank ads are everywhere. Is it actually because of the billions bailout money it received? Of course, paying a higher rate can attract more savers (I was one of those ), but it also add additional cost to the bank that is in such a bad situation, even if it is a pure online bank.

Now that you know GMAC, or Ally Bank, is not healthy, will it change your perception of the bank?

I still remember what Washington Mutual did the week before it collapsed. After giving it so much money, I don’t think the government will allow GMAC to go under, but  the situation does concern me.

Original Post on The Sun's Financial Diary

Special bonus offers

• OptionsHouse 100 Commission Free Trades
• Lending Club $25 Sign Up Bonus
• TradeKing $50 New Account Bonus in November
• CollegeAdvantage $50 Bonus