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This will be my last post at the Online Savings Blog.
Believe it or not, I've sold the blog and will be moving on to new opportunities.
It's a bittersweet moment, as I've spent a lot of time and effort starting, growing, and maintaining the site. But, change is the only constant, and it's time for a change.
Thanks for all your support and continued contributions — they will be greatly missed.
To keep up with me, follow me on Twitter or visit my blog.
Happy holidays — and keep on saving.
Today, we're interested in your goals for 2009.
What are you hoping to do with your personal finances in 2009?
Answer the poll below. If you have more to add, leave a comment!
You can select more than one option.
In September, the Wall Street Journal published an article about nervous investors who were buying low yield, short term U.S. Treasury Bills as safe securities. ("Demand for Short-Term Treasury Debt Puts a Crimp in World-Wide Supply")
I remembered that because I just read another article about nervous investors buying government securities at low yields, under 1 percent. This time it is the Washington Post writing about the low yield U.S. Treasury bonds and declaring that "it's terrible news for the economy, which relies on people's willingness to invest and lend money." ("Flight to U.S. Treasury Bonds Bad News for Economy")
Others in the financial world are quoted. One said "The simplest way to think about this is that nobody wants to hold any risky assets." Another said, "You can cut rates all you want, but if nobody wants to take risk, no matter how attractive an investment seems to be, no one will put up the capital for it."
But wait a minute. Buying government bonds is investing and lending money. Consider the wreckage of the last few months after a decade of mortgage lenders making billions of sub prime mortgage loans.
Investment houses like Bear-Stearns and Lehman Brothers risked billions of America's loanable funds and our savings speculating with sub prime mortgages, and it did nothing except give them a chance to resell financial assets at a higher price.
Our savings could have helped fund our massive Federal deficit. Instead we owe foreign nationals who bought U.S. Treasury Bills and Bonds while Americans were on a speculative spree buying up risky assets that have failed by the billion.
We want our savings to fund the production of long lived assets and valuable services. The private sector has failed to do that lately.
Government bonds earned 4 to 5 percent interest for the last 10 years. If we had invested more in the government and government had used our savings and rebuilt New Orleans we would have something to show for it and thousands of jobs in the process.
The past decade has proved in the most decisive fashion that Americans are ready to take risks and to lend and invest money, but there is nothing that makes private lending and private debt better than public lending and public debt. It all depends on the assets we buy.
Remember one rule: it is not who invests, but in what.
Fred Siegmund covers America's jobs as part of work doing labor market analysis and projections for a client base of recruiters, trainers and counselors. Visit him at www.americanjobmarket.blogspot.com
E-Trade, whose complete savings account had been sitting at a nice 3.30% APY, is falling to 3.01%.
The bank directly relates the drop to the recent Fed rate cut, which will surely lead to other rate drops.
E-Trade's rate will be dropping at the end of the day, Friday 12/19/08.
If you're looking to jump ship, check out ING Direct at 2.75%, FNBO at 3.25%, WTDirect at 3.06% and HSBC at 3.00%. Dollar Savings Direct is currently king at 4.00%.
ING Direct has dropped the rate of its Electric Orange checking account to a 0.5% APY for balances of less than $50,000.
For accounts with more money, the rate is a bit higher. Here's a full look:
- $0-49,999.99 earns a 0.50% APY
- $50,000.00-$99,999.99 earns a 2.85% APY
- $100,000.00 or more earns a 3.05% APY
I use an Electric Orange account as a secondary checking account, and I've never had a problem with it. It doesn't make sense to use it as a savings account — that's what the Orange savings account is for.
The news that the Federal Reserve cut a key interest rate to near zero on Tuesday may have pushed the stock market up more than 300 points, but for savers, there's a downside.
Almost consistently, when the Fed has cut rates, savings accounts have dropped in reaction.
Given that it's been a while since the last round of rate cuts, don't be surprised if you get a notification (or not, if you use E-Loan) that your APY is dropping.
While I'm not normally a rate chaser, there are still a number of great APYs available.
Dollar Savings Direct is at 4.00% APY, by far the highest available among the big names.
Other options include ING Direct at 2.75%, FNBO at 3.25%, WTDirect at 3.06% and HSBC at 3.00%.
Today, we're interested in your money management habits.
If you manage your money online, where do you go?
Answer the poll below. If you have more to add, leave a comment!
With two weeks left in the year, everything seems to be slowing down. The news is less dramatic, the stock market is almost mellowing out, and the holiday spirit is kicking in.
This past week, we participated in two carnivals: the Rich Life Carnival #23 and the 42nd Money Hacks Carnival at financial wellness project.
Check out a few of the great stories:
5 Money Changes To Keep More of Your Money - Debt Free Destiny
Living from one paycheck to the other gets frustrating and depressing and it feel like it is a situation that is never going to end. However, it is ultimately up to you to do the changing to get more change back into your wallet. Sometimes it is these small changes in our thinking and our lifestyles that will help us find a debt-free life.
Here are 5 things you can change right now and find yourself a few steps closer to living without debt.
Two Financial Goals - Less Debt, More Income - Cash Money Life
As the year comes to a close, think about your finances and how you would like to improve them. If you are like the majority of Americans, there are two things on your wish list: less debt and more money.
3 Basic Principles for Good Personal Finance Habits - Destroy Debt
There are three basic principles surrounding good personal finance habits, and they are:
- Live Within Your Means by Spending Less Than You Make
- Making the Money You Do Have Work More For You
- Anticipating and Preparing for the “Unexpected”
Arkadi Kuhlmann, the founder of ING Direct, and business partner Bruce Philp, have recently released a book on their success with the revolutionary online bank.
The book, The Orange Code: How ING Direct Succeeded by Being a Rebel with a Cause, talks about business strategy and "how personal financial empowerment has made everyone a winner."
I haven't had a chance to read it yet, but here's what the reviewers at Amazon are saying:
This book got me thinking about why everyone mimics everyone else in business. Why do all banks act the same way (have branches, credit cards, ATMs, car loans, checking accounts, etc.)? For that matter, why do almost all car dealerships, or department stores, airlines, etc. act in the smae way?
Arkadi Kuhlmann has provided his own answer by trashing some of the sacred practices of established banks and creating a new company that is wildly successful by standing for something in the face of the customer.
Thomas A. Farin "Bank Consultant":
I expected to be told most of what I already knew. Instead I found it full of insight on ING Direct's core principals, its branding strategy, its thought process behind its maverick behavior, management communication and a number of things I hadn't thought about. Those things are core to an outstanding success story.
If you intend to reinvent your business it is a 'must read'. I will be ordering a copy for each of our staff members to prepare those willing to make the committment for a planning retreat in which we intend to reinvent our business. I suggest you do the same.
Have you had a chance to read it yet? I'm going to get a copy and, when I finish, will review it here.
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Former presidential candidate and businessman Ross Perot is answering questions over at the Freakonomics blog.
Check out some of the interesting points:
Do you consider all deficit spending misguided? Surely there are some times when it is called for.
Classical economic theory calls for deficit spending by government when faced with prospects of recession and depression. The challenge, of course, is to spend money in a manner that will create the most benefit for the economy. This will prove to be an incredibly complex assignment and the subject of much debate.
Of course, wartime often requires deficit spending. World War II required huge amounts of deficit spending, for example. The difference between then and now, however, is that we ran budget surpluses after the war and paid off the debt.
I remember when you were running for president, they showed you driving around in your old Volvo. What are you driving now? And what would you do about the U.S. automakers’ woes?
Actually, I was driving a 1986 Oldsmobile. I have always driven American-made automobiles, and I currently drive a Ford product.
Clearly, General Motors meets the definition of too big to fail, as do Ford and Chrysler. General Motors happens to be closer to running out of cash at this moment. The question is whether domestic automaker sales are slumping as a result of the short-term liquidity credit crunch or more basic reasons such as their business models. I suspect both are to blame, but the proportions are difficult to determine. An analytical approach would favor a prepackaged bankruptcy, but the situation is well beyond that stage. It’s now in the hands of the politicians who are almost certain to craft some type of bailout or bridge-financing feature to keep G.M. out of liquidation.
Check out the full Q&A here.