Friday, May 30, 2008

Consolidate and Close Accounts to Keep Better Tabs on You Financial Situation

One of the great things that a steady stream of new entrants into the online brokerage arena had the effect of doing is to make companies compete harder for your business. There are now plenty of good places to hold your investments and with that said I'm a big believer of consolidating your investments and holding them at a handful on institutions rather than have assets all over the place. Below are the reasons that I think this outweighs the minimal benefits you may find from using a number of providers.

1) Reduce Fees: Many providers reduce or even eliminate fees and commissions once you hit a certain threshold of assets. Some investment houses will throw in free trades, free research, or advisory services if you increase your holdings to a higher tier.

2) Increase Your Sensitivity to Fees: With life being busy and time short, I find that I'm more likely to carefully inspect my monthly or quarterly statement if I have two or three to look at rather than 5. I also am more sensitive to being nickeled and dimmed with fees when I see multiple fees on the same statement rather than one from each investment company.

3) One statement: Many investment companies will provide you with one consolidated statement which makes record keeping a breeze and reduces hassles associated with tracking down important information.
4) Availability of Options: Nearly all the well known brokerage companies have been beefing up their no transaction fee mutual fund offerings which makes it easier for you hold a Janus fund in a Fidelity account or an Ariel fund in a Schwab account. This makes for one stop shopping and as stated earlier one statement. The rise of exchange traded funds (and more and more niche EFT's that act more like mutual funds) allows small and large individuals to level the playing field and diversify without the strings some mutual funds attach.

5) Get a Clear Picture of Your Financial Health: Pooling your investments with one provider is a quick way to see your net worth and if you are meeting your financial goals, whatever they may be.

6) Organize Your Affairs in the Event Something Should Happen to You: No one wants to think about death or serious injury, but if you were hospitalized would a family member or friend be able to track down your money to pay bills? Are your investments spread over 10 fund families held in 10 separate accounts plus your 401(k), Roth IRA, and traditional IRA? If you have a financial power of attorney in place you representative will have an easier time tapping funds that may be needed to settle your affairs or care for you.

Things to note. It should be noted that you want to consider FDIC and SIPC insurance limits that may be applicable to the funds you hold at a single institution. There are plenty of good discount brokers like Fidelity (the king of investment houses), OptionsXpress (a newer discount broker that has grown quickly and has no minimums, T.Rowe (one of the biggest discount fund shops), and Charles Schwab (the big time discount broker).

Many of these providers like Schwab and Fidelity have added high yielding checking account and other banking options to their typical securities offerings (read more here). While the new accounts have big benefits over the brick and mortar checking accounts, most people need somewhere to deposit money in person from time to time. I would suggest that if you are interested in consolidating financial holdings that you keep a completely free checking account at a bank close to your house so you can quickly deposit the occasional check (ask, because your bank will probably try to lead you to an account with minimums and/or fees). Once the money is deposited in your local bank account you can easily move the funds through the ACH system to your other account. This method is much faster than mailing a check to the financial institution.

Thursday, May 29, 2008

The Economy May Be in a Funk, but Banks Keep Offering Deals

With the economy tanking it makes sense to take free money from anywhere you can get it (provided there are limited strings attached). Below are some of the offers that I saw this week while surfing around. While most require some minimal hassle, if you are in the market for a new account anyways they might be worth your while.

E*Trade Savings $25 Bonus
Details: $1 minimum to open an account. Bonus will be deposited within 30 days of opening the account. Another plus, the 3.15% APY is one of the best out there.
Direct Link

INGDirect Savings $25 Bonus
Details: $1 minimum to open account, but if you want the $25 bonus you must fund the account with at least $250. ING was paying 3% APY as of 5/28/2008. (Full Disclosure: If you sign up for an account with one of the links below I receive $10). If one of the links doesn't work try the next. In none of them work for you, send me an email and I'll get you a fresh one.
Direct Link 1; Direct Link 2; Direct Link 3; Direct Link 4; Direct Link 5

American Express Nest Credit Card $50 Bonus
Details: You receive 5,000 bonus points after your first purchase (redeemable for $50). The card also gives you 1% back in points that are redeemable for cash and an additional 10,000 points (equal to $100) for any year you charge over $15,000 on the card. You also receive a financial planning kit that is supposed to help newlyweds budget. Plus, everyone will think that you're a newlywed as you throw down the AMEX (even if you're not).
Direct Link

Monday, May 5, 2008

Easy (and Free) Ways to Go Green

Today marks the beginning of a series that I hope I will be able to keep up with in the coming weeks. I hope to do a series of short posts about ways to clean up your finances and do a sort of spring cleaning if you will. I know I have fallen behind things, so maybe this will help me get back on track.

Everyone has at least one credit card that has some sort of reward, or is at least an affinity card of one type or another. For those of you who are somewhat environmentally conscious, but can't part with your SUV or other less than environmentally friendly habit - I stumbled across something yesterday that may be of interest. It seems that some credit card issuers are looking into so called "green" causes as a way to boost membership and profits. I have listed some of these cards and their benefits below.

GE Money Earth
This MasterCard directs 1% of your purchases to causes that reduce or avoid greenhouse gases and helps to offset your personal carbon footprint.
Direct Link

Working Assets Visa
This Visa donates 10 cents to organizations like the Ocean Conservancy or Global Fund for Children every time you make a purchase. You can view of full list of the organizations supported here.
Direct Link

Bank of America Brighter Planet
This Visa credit or check card returns 1 Worldpoint for every dollar you spend on purchased. Every 1,000 points can be redeemed to offset approximately 1 ton of emissions (the equivalent of taking a car off the road for 2,000 miles). Plus, now you can get 1,000 bonus points for signing up and 1,000 bonus points for signing up for paperless statements.
Direct Link

Salmon Nation Visa
Provided by ShoreBank Pacific, this Visa donates half the income it generates to "salmon nation". Salmon Nation is a collective in the region that is home to Pacific salmon spawning grounds.
Direct Link

Affinity Cards

These cards provide donations to the not for profit organizations that are represented on the face of each piece of plastic. If you run a Google search with "your favorite not for profit org" followed by "credit card'" chances are you will be able to track down a credit card that will finance some of their good work.

** Note: I didn't do an analysis of which one of these cards is best for YOU financially. Read the fine print for each offering. Remember, if you consistently carry a balance on your credit card you are better off finding a card that has a very low interest rate and donating some money to the charity of your choosing if you have funds left over at the end of the year.

*** Note: If you have a great card that you think should be added to the list, drop me an email and I will put it up on the website and give you credit for finding it.