How To Get Better Rates And Higher Service From Banks

Thumbs Up For More SavingsWeeks before Lehman Brothers went bust on September 15, 2008, I decided to spread my savings out to various banks to hedge against risk. As you may recall, Bear Sterns was taken under that Spring and Washington Mutual was also in deep trouble and eventually gobbled up by Chase.

Now that my 5-year CDs have expired with First Republic Bank, I’ve begun consolidating my assets with Citibank to make things easier to manage. I’ve been with Citibank for the past 14 years. There is now risk I will lose some of my money given the amount is above the FDIC insurance coverage of $250K/$500k for singles and married couples, but I also don’t think there’s any chance in hell Citibank goes under now, especially since tier 1 capital ratios are now much higher as mandated by law. Besides, the economy is much stronger than it was five years ago.

Another reason why I’m not worried is because concentrating this amount of savings with one bank is only temporary. I know I’ll be putting a hefty downpayment on a property this year. Furthermore, I’ll be spending a good chunk of change on remodeling, which will bring my liquid savings down to a minimal amount again.

I think it’s a good idea for everybody to shoot to have $250,000 in assets with one bank. $250,000 in assets includes savings, CDs, or investments. Based on my experience, once you’re at the $250,000 asset mark or higher, I’ve noticed banks start treating you much better. If you have significantly more assets than $250,000, then I suggest having at least one other bank for convenience and safety. For example, I hate paying $3 ATM fees, so by having money spread across two major banks, the chances of me paying ATM fees goes down significantly.

Everything You Wanted To Know About Trust Funds

trust fund2I was speaking to Bob, a 42 year old acquaintance who told me that he received a trust fund when he was 35 because his parents sold his grandparent’s company for around a hundred million dollars. Can you imagine getting a phone call from dad one day after busting your butt in high school, college, and work for 21 years to find out you just inherited $10 million bucks? What’s more, you learn that your seven year old son also inherited $3 million dollars with a trust of his own. Time to kick back and do nothing!

I asked Bob why he was still working, and he said, “For pride. I want to see what I can do on my own. I never want to touch my grandparents’ money because I would feel a lot of shame. What business do I have using their money to pay for a first class plane ticket when he bent over backwards building his own company.” Bob said he would never touch his trust fund for as long as he lives.

Bob is a rare breed because I’m pretty sure most of us would molest the trust fund in some way. I’m looking to buy a house in San Francisco, for example. What’s withdrawing $200,000 for a downpayment when there is $9.8 million left? At least I’m not buying a mega-mansion for $8 million. I’m going to London for Wimbledon this summer. Instead of going back home in the middle of the tennis tournament due to work and insane $1,500 tournament ticket prices, I’d just stay through to the end.

Maybe I’m being dishonorable with my grandparents’ money, but gosh darn it. I’m telling you guys the truth! Can you handle it?

What’s So Bad About Bank Of Mommy And Daddy, Cry-baby?

Street Fighter Bay To BreakersWe’re back again with what’s turning out to be a really entertaining series showcasing curiously angry comments from readers who find my site through online search. Just to give you some background, roughly 75% of this site’s ~500,000 pageviews a month comes from new readers through search engines such as Google. Many of these visitors hit the site once, don’t subscribe to my e-mail feed or RSS feed¬†and never bother understanding my background or going through the archives. You wouldn’t be so silly as to not subscribe would you?

I really enjoy highly opinionated comments. The more extreme the comment the better because I think points can more easily be made when we go to extremes. For example, I like to tell personal finance clients, “Consistently spending money they don’t have is like jabbing a long needle into their left eyeball.” They can still see out of their right eyeball, but life is going to be one big bloody mess if they continue their poor money habits.

This latest comment comes from “James Morrison” on my post “The Average Net Worth For The Above Average Person“. The post has 400 comments and is somewhat controversial because I provide a chart for what I think “above average” people have in terms of net worth. The people who are most upset are those who think they are above average, but are not within my net worth range. Because the construction of my above average net worth chart is very thorough, I feel it might have enraged some people because truths hurt. At the same time, the figures are based off my opinion. There is no law that dictates what one should have.

It’s always fascinating as a writer to figure out how to engage the audience. What’s more fascinating is the fact that commenter James Morrison says he is “in the top end of my above average” range for his age, yet he still went berserk. Furthermore, he left a derogatory URL address that I won’t share. Let’s have a read!

What Is Considered Mass Affluent Based Off Income, Net Worth, And Investable Assets

Average Net Worth For Above Average Person

The middle class is the best social class in the world because nobody messes with the middle class. Politicians endlessly pander to the middle class in order to gain votes to stay in power. When you’re in the upper class, you become a target for hate groups who can’t stand success in the great USA. If you’re poor, well that just stinks.

But what about the mass affluent? You might have heard the term bounced around here and there on the TV, online, or on the radio. Surely including the words “mass” to signify a large population and “affluent” to signify wealth is an even better class than the middle class? As far as I can tell, the mass affluent are yet to be negatively targeted by hate groups.

In this post you’ll learn about the various financial definitions that aptly describe the mass affluent. Furthermore, we’ll discuss why being part of the mass affluent has its benefits.

When Saving Money Is No Longer Worth Your Time But You Do It Anyway

Cash MoneyAfter drinking a couple beers with a buddy a couple months ago, I dragged myself across the street to get a flu shot at Walgreens. Supposedly this season was one of the worst, and I had no desire to get swine flu. I hate needles. The insertion isn’t what bothers me. What irks me is the uncomfortable feeling of liquid getting pushed into my veins as the injector tries to hold the needle still. I don’t know how heroine users do it!

I actually didn’t feel a thing this time around because I was a little tipsy. Perhaps you too should give needle injecting a go after a couple drinks (see doctor for professional medical advice). When I went to pay the bill the pharmacist said, “That’ll be $34.95.

Over the past 11 years I don’t recall ever paying for a flu shot. The first nine years was because my old firm was awesome enough to bring a pharmacist in to our office and inject us all for free. And the last two years my insurance provider paid in full. But this pharmacist was adamant that Cigna, my insurance company, wouldn’t pay for the particular strain I was about to get. Odd.

Normally I would have told the pharmacist to hold up so I could give my insurance company a call and ask them what’s up. But this time, I just couldn’t be bothered with this picayune amount. “OK, no problemo! Charge away.” I didn’t want to have to spend 30 minutes on the phone for the chance of sending in my receipt to get reimbursed $35. Maybe if I was absolutely bored out of my mind with a lot of time to kill I’d go through the entire discovery process, but I just didn’t have the patience.