Archive for the ‘money’ Category

Financial Helpers – 2012

December 22, 2012

Looking back over 2012 one of the smarter things I did was start using some smarter tools to keep track of finances and make some decisions that I hope will pan out well for the future. All of what follows is personal observation and experiences. I don’t even play a financial advisor on an internet TV show so really… don’t make any decisions without engaging your brain and, where necessary, getting the right professional help.

Betterment

Stocks, shares, trading, bonds, EFTs. I don’t pretend to know anything about them. Luckily Betterment not only understands but has done a really good job of putting a simple dashboard in place to let you balance your investment between bonds and the stock market and they take care of the rest. You can rebalance daily depending on your comfort (though they recommend to pick a profile and stick with it) and as well as the gains on the markets you get a small dividend income as well. Over the last couple of years we’ve seen a modest 3.5% return but that was because I ignored their advice and fiddled and made a bad decision which I didn’t correct soon enough… their what-if scenario view of how things would have panned out is a constant reminder that they know more than I do! [Free with a $100 monthly investment. Other plans available. Opening bonuses available]

BillGuard

One problem that has plagued us since we got to the US has been credit card fraud. 5 or 6 times in the last 6 years we’ve found spurious charges on different cards (two of which ended up with the abuser spending time in a correctional institution so it wasn’t all bad) but as a backup to the vigilance of our credit card providers (and I can’t rate Amex highly enough for that) I’ve been very happy with BillGuard for spotting some suspicious behavior. [Free, sponsor supported]

BillShrink

It always sucks to be paying too much. Cellphone, TV and Gas bills add up over time but BillShrink do a great job in helping you compare plans, options and savings. GasBuddy is another great way to compare gas prices on the go (and it has a really handy mobile app for most platforms). [Free, sponsor supported]

CreditKarma

Credit scores are hugely important. They determine interest rates (and even if you can get a loan) and have an impact on insurance. Keeping track of them can be expensive, or if you’re trying to navigate the options to get your federally mandated once a year free reports often confusing. Luckily CreditKarma provides a service which tracks your score, as well as explains why it is what it is and makes suggestions on how to improve it. [Free, sponsor supported]

FutureAdvisor

Planning for the future is tough, but if I could tell the 25 year old me one thing (apart from look after your teeth better) it would be start saving seriously now. The problem with most of the big 401(k) plans etc is that there’s so much information it’s hard to know if you’re making good decisions when it comes to balancing your portfolio, paying fees and maximizing your tax effectiveness. Luckily the team behind FutureAdvisor has made it their business to undertand this and provide some really simple tools to help you rebalance your portfolio to maximize your return (and keep reminding me how much more I need to save before I retire!). They helped me save on fees and improve the overall return on my 401(k) for a few minutes clicking through a wizard… a great investment of your time. [Free, though “pro” services coming soon]

LendingClub

Banks make their money by loaning your money to strangers and charging interest, and then paying you a tiny bit of it. Wouldn’t it be nice if you could lend money to random strangers and get most of that interest paid to you? Well, LendingClub facilitate just that. They review loan applicants and grade them based on a number of factors… the worse the risk the higher the interest rate they charge. Loans can be either for 36 or 60 months 9with the longer loans paying slightly higher interest rates). You select the loans you want to fund part of as a pool (in slices of $25) and they administer everything, hopefully returning principal and interest to your account every month which you can re-invest or bank. It’s a risk. Payments can be late and – as the banks know all too well – people can default on their loans. Over the last year I’ve seen a return of over 12% but have to balance that with 1 default and two or three loans that right now look like they’re heading the same way. 5 have fully paid off early though. There is a secondary market where you can trade loans if you need liquidity sooner than the term of the loan but it’s hit and miss what sort of return you’ll get there. [Free, with premier services available once you reach a certain investment level. Opening bonuses available]

Mint

Pretty much every bank gives you an online way to check balances and transactions but if you have more than a couple of accounts then it gets tedious. Mint brings all them together in one place as well as helps you categorize and track spending and prepare for up-coming bills. While the service is very broad supporting most financial institutions it seems to have some peculiarities in how it renames and categorizes items (and rather than getting better attempts by their new owners, Intuit, seem to be making things worse) which is creating opportunities for new services like Personal Capital. [Free, sponsor supported]

Zillow

As a homeowner knowing what your house is worth, and deciding if it’s a good time to try and refinance, is tough. Sure, the council will put a number on it for tax but how realistic is that? Zillow is best known for helping people buy/sell houses but a really handy side-effect of that is their Zestimate service which tracks a valuation for your property that matched pretty well to the professional valuations we’ve had done.

Banking: Still in the slow lane on the information superhighway

December 14, 2010

After over a decade as an online banking user there’s one thing that still frustrates the hell out of me here in the US. The time it takes to move money around when banks are involved.

It’s quicker to drive to Bank A, withdraw a bunch of cash, drive across town to Bank B and deposit it, than it is for an electronic transfer to complete.

With branches open until 6pm and even on Saturdays the first hurdle is that you need to make sure you have your request to transfer in the system, on a week day and before some arbitrary time (it seems to be before 4pm East Coast, which doesn’t help when you’re on the West Coast in the US – 3 hours behind). Then the process can take 3, sometimes 4 business days before the funds are available at the destination bank. What is really insane is when this happens between accounts with the same bank. Makes you wonder who profits from this delay.

For an account to account transfer within a bank I’d expect to see that reflected pretty much instantly. For a payment to a Credit Card with that bank I can’t see why it would take longer than an overnight run. For a bank to bank transfer … unless they are physically putting the money in a truck and driving it across town I’d expect to see an electronic transfer happen overnight.

Even when the money has gone from A to B you run into the Statement Balance vs Current Balance problem. Rather than show you all the transactions they know about, some banks seem to have taken the concept of paper statements and put them online. So what you get is a view into what your account looked like a day, or a week ago with some mysterious delta between what the statement knows your balance was (and the transactions that made it up) and what the bank knows about your actual money – because they can correctly track the current available balance.

This sluggish updating not only impacts customers using the banks own systems, it makes life tougher for services like Mint (who already have enough problems of their own!)

Finally… what’s with expiring data. Somewhere in the system you’ve got records going back to the dawn of time. Storing them as raw, compressed data electronically isn’t going to take up that much space or cost that much money (even with Hierarchical Storage for the really old stuff) but if I live in a country where at the drop of a hat the tax man can ask for 5 or 7 years of records… make sure they are available. Don’t charge me $25 so you can go and scan the paper copy you printed when you archived it to dead tree. I don’t mind waiting a couple of days while it gets sucked back from a vault somewhere but this isn’t rocket science.

When you look at the profits banks make, and the pitiful interest rates they pay out you have to wonder what’s going on (BTW why is it a “good” US bank is paying 1.10% interest, but an Australian bank can deliver 5%+ and still manage to get my money transferred to a different bank usually within a day)?