June 28, 2008

• One Bank, Two Bank, Red Bank. Blue Bank

  I’ve been reading a lot, as usual, and I am about 3/4 of the
  way through Suze Orman’s “The Courage to be Rich”.  I fond her
  writing to be pretty good, especially for the general public. 
  Much of the advice is common sense, such as, if you have multiple
  debts, work hardest on paying off the one with the highest interest
  first.  Other ones are very long term looks that most people
  would not think of.  For example, most people would tell you
  not to lease a car, since you’d just be paying money into something
  that you will nere own.  However, Suze talks about a good way
  to save up for a car every 10 years.  Chris should pay
  attention to this.

  Let’s say you buy a car
  for $25K.  In her example, you pay it off in 5 years, paying
  $350 a month, which, after interest comes to a little over
  $26K.  After the car is paid off, if for the next 5 years you
  continue to put $350 a month away at 8% interest (I always find that
  interest part to be the hard step), in 5 years, you’ll almost have the
  $25K saved up just to buy a new car in full.

  One
  thing that she talked about is opening a checking account with Charles Schwab.  I
  think she is somewhat sponsored by them, however, the relationship does
  not appear to be one in which someone recommends a sub-par product for
  sponsorship.  In any case, CS offers a checking account that
  gives an interest rate of 2%, with no annual fees, or minimum
  balances.  This kicks the shit out of my current bank account
  with USAA (although they are a very good bank).  However, it
  also beats my savings account there.  Last year, I missed the
  opportunity to convert it to one that received a higher interest
  rate.  However, that was a smart move at the
  time.

  For the better account, you needed a minimum
  balance of $10K to convert to it.  However, looking at the
  interest rate, for balances under $10K, you received a better interest
  rate with the original account, and since I was about to make a major
  purchase, not changing was in my best interest.  Now, the
  better account receives a minimum of 2% no matter what, which is almost
  triple what my current account receives at lower balances.  If
  I could move $10K around without a lot of hassle (and probably a fee or
  two), I would probably change the account.  That will have to
  be something for another day.  USAA however, does have
  excellent insurance rates, so I won’t be leaving them
  entirely.  I might just throw money into the new account and
  not touch it for a while.

  There are a lot
  of pros for CS.  Unlimited refunding of ATM fees, the account
  is a regular checking account with no minimum, balance or limit on
  transactions.  Essentially, it’s everything that my current
  bank is, plus 2%
  (literally).

  Note:  In the middle
  of writing the entry, I decided to open the account with Charles
  Schwab.  I couldn’t really see a reason not to. 
  Discussions with Arcenis
  confirmed that this was a good idea.  I’m also thinking of
  canceling my account with Bank of America.  It just seems that
  every time I see news about them, it’s about some method that they are
  using to screw their customers.

  Black 6,
  out.

  • 5:43 pm
  • 6 Comments