September 18, 2008
An exercise in thinking like you’re rich.
I had a financial conversation with a colleague recently. ’twas random, we don’t usually talk money. He was on his way to open a new account over at Wells Fargo so that he could move his money out of WAMU, and I dismissively joked that as long as he had less than $100k in there, he’d be fine. Stressed, he said that he DID have more than that in there.
Yipes! I immediately, reflexively, scolded him, and then asked, “why Wells?” After all, they’re the one bank I remember as consistently charging the most and highest fees of all the major banks. It turns out, he says, they’re one of the few banks doing relatively well.
We chatted for some time about banks, online and B&M, and I had a hard time believing that he knew nothing about online banks. He’s understandably nervous, since he apparently isn’t very financially involved, so he just wants protection for his money. I can understand wanting to protect yourself, but I cautioned him not to settle for the first thing that seems safe just because he’s desperate for safety. Also, that’s what causes bank runs!
I advised him to look at INGDirect, Emigrant Direct, HSBC Direct, and FBNO Direct to get an idea of what kinds of online banks and services are available to him.
He wanted to know how I know that ING is safe. Well, darlin’, no bank is ironclad safe, but I don’t see any evidence that ING was offering the kinds of creative, “exotic” mortgages that all the big (B&M) boys were. At least it appears they didn’t participate in the bad-debt-generating feeding frenzy, so we know that’s good. Their primary business seems to be savings vehicles like their Electric Orange and savings accounts, CDs, and basic mortgages.
After we hung up, I realized: what am I doing giving somewhat superficial financial advice to someone has actual money to worry about? My net worth is less than his small change in the bank! Good grief.
I know he started picking my brains, but I felt a tad irresponsible for not assessing the situation more properly, asking more questions, and working with some actual data before making suggestions. Who’s to say I’m ready to play with big boys’ money?
All of that got me thinking: What DO you do when you have that kind of money (in the six figures)? What should you do if you had upwards of $100k in cash at the bank? I wouldn’t imagine that it would all be cash sitting in a savings account, right? My immediate reaction would be that some of it should be locked up in some high-interest bearing CDs, and a certain amount would have to stay in liquid cash savings accounts, but what about the rest of it?
The main goals would be 1) maximizing interest earnings while 2) keeping the money as safe as possible. Both conditions would have to be fulfilled when picking banks. Part of keeping that money safe is diversifying banks so that if one fails, I still have access to money at another one that is (I hope!) still functioning. Another part of that is making sure that all assets are insured by the FDIC: this means keeping the balances below the 100k limit. Theoretically, this isn’t playing-with-stocks-money, this is all savings.
If you had $150,000 in cash, how would you divvy it up and where would it go?
I’d keep $30K in savings accounts, at ING, for emergencies. Next, ING has an 18-month CD at 4.5% APY so I’d take them up on that for $50k, leaving myself a $20k FDIC cushion. After that? I’m not sure. Another $50 would probably be stashed at ED, at 3% APY. That leaves me with $20k. Without doing more research, I’d be tempted to leave the remaining $20k at Emigrant, but I still don’t have a regular B&M in this plan. So I could leave most of that $20k at ED, and a few thousand in a checking account like my Citibank account for paying bills.
I would also consider the Charles Schwab Bank which seems to have solid financial footing right now, and very little credit losses.
If I wasn’t certain about the amounts I already had in the banks, if I wasn’t just-now divvying up and depositing my money which is a more likely scenario than suddenly finding a sack of hundreds of thousands of dollars, I would use EDIE the Electronic Deposit Insurance Estimator to determine how much I had in FDIC covered banks, and make my moves accordingly.
Whew! There’s a whole lot of work involved in managing wealth. I guess it might be true what they say: the more money you have, the more time you have to spend thinking about it. Or at least, you definitely have to have a plan if you want to protect that hard-earned money.
What if you had $150k? $200k? $250k?
Shenanigans!
The work computer and iPhone officially hate each other. If it’s not a failed Sync, it’s a failed backup. If it’s neither of those, iTunes refuses to acknowledge that iPhone is plugged in. If it deigns to acknowledge iPhone long enough to perform any sort of task, it’s sure to kick the phone out of its digital system the second I turn my back. Before it does that, though, it wipes out all my alarms and music so I’m stuck without music and don’t know my alarm won’t go off in the morning.
This feels like trying to get two belligerent three-year-olds to cooperate without smearing peanut butter all over the walls, in their shoes and hair, and anything else they can reach.
Or is it just me?
September 11, 2008
Every time I think of WAMU potential failing, I think of my checking account, my three year supply of animal checks, and inevitably, Kiki. She’s a Sluggy Freelance character, a ferret who’s terribly attached to her friend Sam, a vampire. She’s always exhorting, in any given situation, for him to “Stay Good, Sam!” It’s a completely unrelated webcomic, having only the slightest of relevance to anything, but it still amuses me.
For a much more mature analysis of the state of affairs, Flexo’s really the man.
On a personal note, I’ve had a checking account with WAMU since I turned 18, and have been using this batch of checks since 2001. That’s really the main reason I’ve kept this account: I don’t want to pay for any more checks while I still have at least a good 300 checks left. They do have decent customer service for my free accounts, so I usually keep a minimal amount of money in there and transfer money from the Citi account as necessary to round out the checks I write.
It’s not comforting that my two primary B&M banks aren’t exactly stable, but I do have an ING account from which I could open an Electric Orange checking account in a pinch. That shouldn’t take too long. There’s probably about $500 in the WAMU account right now, and I’ve considered transferring it all to my Citi account to avoid the inconvenience of dealing with FDIC insurance if it comes to that. Taking out my $500 wouldn’t make a difference in the whole scheme of things, I’m just small fry, but if everyone took out their money, creating a run on the bank, that’d be a shame. Hm…
September 5, 2008
I love this little tip for a more positive, productive approach to addressing an underperformer. It acknowledges past performance, if there was any, and emphasizes communication which is so much better than just imposing a top-down decision meant to “fix” the employee without actually interacting with him or her:
Budgets are too tight, margins too close. You simply can’t tolerate underperforming employees. But replacing deadwood is arduous and time-consuming. Plus, successors need months to start producing value.
So, take a shot at improving unsatisfactory performance–especially if the employee has shown value in the past. One common cause of poor performance is confusion over expectations. Ask the employee to list the three most important things he’s paid to do. Do the same exercise for him. Most likely, the two lists will differ dramatically. Use them to align expectations more clearly. You can then help your employee focus on doing the right things.
Adapted from “Will You Help or Heave Your Underperformers?” by Paul Michelman, Harvard Management Update, March 2004.
August 28, 2008
BF and I are having a major difference of opinions and I’ve a bit of turmoil about it. In an nutshell? He’s ready for marriage, and I’m not. The point is being pressed because there’s a possibility that I may be, for a number of reasons, required to make some significant life changes and the idea that this LDR may be indefinitely LD is distressing to him.
The uncertainty is distressing to me as well, but the idea of dropping my career mid-stride to move to the Bay without any job prospects or direction just to marry him now that he’s ready to start a family is not palatable either. I don’t oppose the idea of starting a family, and certainly don’t oppose the idea of starting it with him, but even without considering the current upheaval that I’m navigating, it’s unreasonable to be upset/impatient with me because I’m not on the same timetable.
We’re a number of years apart, and I’m simply not ready to make that commitment before I’m actually ready.
I’ve got to take another step on my career path; there are things I want to accomplish that may take me away from where he’s based and while an LD BF is workable, I definitely don’t want to have an LD husband!
Limiting myself to NorCal in finding a challenging and rewarding job is daunting when my industry is most concentrated on the East Coast.
Besides the practical considerations, I need at least a year to re-establish myself and get my bearings outside of a highly toxic and discriminatory environment; I’ve lost my balance in a lot of ways and I’ve got entirely the wrong mentality to be starting a stressful new phase of a relationship.
Don’t get me wrong: I want marriage, and I want kids — eventually. And I definitely want my pets and my financial security and all of that. But I don’t want to jump the gun on marriage, especially not job and prospect-less, because I don’t want to start my marriage resentful and insecure in not pulling my own weight in the relationship.
I’m having flash-forwards to being alone in a strange city years from now, having pursued career instead of family and finding myself unhappy with both. Alternatively, I’m seeing myself in the apartment, jobhunting and depressed, but married. There’s a middle road, somewhere, I just know there is.
This, too, shall pass. Right?
August 26, 2008
I ran the numbers on Salary.com to compare the cost of living expenses and the salary figures between where I’m living now and NYC. I can’t figure out how to black out the personal data to show you the graphic, so you’ll have to take my word for it.
The cost of living was calculated to be 81.1% higher in NYC, so I would have to make at least six figures to maintain my current standard of living. (Of course, all the calculator asked for was my current salary, so it assumes I’ve got a pretty decent life, without dependents, I guess.)
Their assessment of the typical salary, for the same type of job and same type of company, stated that NY employers pay about 6.1% more than my employers in my city. Again, the calculator is likely limited in scope and accuracy because it doesn’t address the industry, type of job, or anything in detail.
Still, it’s a sobering thought that I’d need a 50% raise to earn what passes for the same standard of living as I have here.
August 25, 2008
For about five minutes, I imagined several things that would totally rock:
1. Seeing a zero balance on the dratted truck payment. Yes, it’s still around. Yes, it’s a terrible time to be selling a truck. I think my best bet at this point is to continue trying to sell it, but if I can’t, I’ll just have a paid-off truck with really low gas mileage for sale about a year or two from now. If the gas prices cooperate at all, that is. In the meantime, just getting it off the monthly expenses? Awesome.
2. If the ticket voucher from United had NOT been restricted to the 48 contiguous. I’d take that month of vacation, ideally half the time and the other half in money, and spend two weeks in Hawaii. I’d use hotel points for as much of that time as possible, of course, and we have family friends (and I think I have family there too) that I could possibly spend some time with. Whatever. Two weeks in Hawaii coasting on vacation time. That’d be awesome.
3. (utterly burning my bridges) Walking out. Uh, yes I know, totally not classy. But if I could say what I wanted to say? Do what I wanted to do with no regrets and no repercussions? Ahhh …. sweet. That’d be awesome.
4. Landing a dream gig, preferably on this coast, but I’ll take the East Coast as well. That’d be awesome.
What would your five minutes of That’s Awesome! dreaming look like?
