Finance – Page 2

Save Money for Tough Times

March 14, 2010 by Sharon 2 Comments

My guest writer is Sharon Smith.

Start saving for the "rainy day"

There is a crunch in the American economy and times are hard now. How is it possible to survive in this financial crisis? It is about time that you start saving for the “rainy day”.

Every family has an individual lifestyle to maintain. Here are a few tips, which can help you to save money, without compromising on the living standards.

Do not waste food. Serve leftovers the next day. This will help in resisting the temptations of eating out.
Tired of wearing the same old clothes? Instead of buying new ones, swap your wardrobe with close friends. This will freshen up your wardrobe to an extent.
In case of errands, plan an efficient route so that all your tasks are done and you save money on gas too.
Looking for some entertainment? Swap DVDs with friends or rent a movie. You can also go for a bargain matinee show.
Prioritize your debts, if any. Pay off bills promptly. This will help you to maintain a positive credit score. Not paying off debts on time would hamper your credit scores. In the long run, if you ever accumulate debt, it will become difficult for you to consolidate debt with a bad credit record.
Try to increase your incomes by pursuing your hobbies, or renting your garage.

There are various ways of saving money. All you need is the knowledge about what and how you are spending on. Once you know that, you will know where to cut your expenses as well. Saving money requires determination as you need to change some old habits, and also reconsideration of your priorities. Once you start saving, it is going to act as a boost. You would want your savings to grow and thus would start saving more.

Photo Credit: argo_72

Five 2010 Predictions

December 18, 2009 by rickety 2 Comments

The Crystal Ball. J.W. Waterhouse.

Only one of my five predictions for 2009 succeeded. I predict in 2010 that I will do better.

1. The Dow will drop below 6,750 FAILED

In October 2006 the Dow Jones industrial average crossed over the 12,000 mark briefly for the first time in its 112-year history. On 9 March 2009 the Dow Jones industrial average lost 80 points, or 1.2%, to end at 6,547.05, its lowest point since 15 April 1997.

2. Gas will go above $4 a gallon FAILED

The price of gas here in Kaysville, Utah is currently $2.47 a gallon. It is not unrealistic for gas to go over $4 a gallon next summer. I’m glad I run on CNG.

3. Republicans will gain 40 seats in the House SUCCEEDED

A more realistic prediction would be a gain of 20 to 30 seats but I am optimistic for a net gain of 40 or more seats.

4. Gold will drop below $750 an ounce FAILED

Since 1968 the price of gold on the open market has ranged widely, from a low of $252.90 an ounce on 21 June 1999, to a high of $1,023.50 an ounce on 17 March 2008. Indexed for inflation, the 1980 high of $850 an ounce would equate to a price of around $2,400 in 2007 US dollars. Gold passed $1,200 an ounce on 2 December 2009 but has dropped into the $1,100 range since. It is time for further declines.

5. Utah unemployment will drop to 5% FAILED

Currently the Utah unemployment rate is 6.3%. My prediction of 5% or less is optimistic but achievable considering the positive business climate, the need for services from a growing population, and a fiscally responsible state government.

More Predictions

My predictions are rather bold so I do not expect all of them to succeed. What do you think? Which ones are sure to fail or will any succeed? Do you have any predictions for 2010? If you have blogged about them consider putting a link to your post(s) in the comments.

Check out these predictions:

8 Predictions for SEO in 2010
Oscars 2010 Predictions – Early Oscar Predictions 2010
10 Apple Predictions for 2010
Earth2Tech Predictions: 5 Biggest Hurdles for 2010

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Central Bank Gold Reserves

December 7, 2009 by rickety 13 Comments

The Top Twelve Central Banks Gold Reserve Holdings

With China and India acquiring gold it is interesting to see that the United States still holds almost eight times the gold that China does and more than fourteen times India’s reserves.

Of note is that the United States has 78% of its foreign reserves in gold. Of the countries listed below only Greece (91.6%), Portugal (90.3%), and the Slovak Republic (83.3) have higher rates. However, China has only 1.8% of its foreign reserves in gold. India is looking a little better at 6%.

Only the top 50 countries by gold reserves are listed below. Of course the IMF and a few others are not countries but they do own substantial holdings.

Click on the column headers to sort.

Country	Tons¹	Percent²	$ Billion³
United States	8,966	78.3	313.80
Germany	3,762	69.5	131.66
IMF	3,546	N/A	124.13
Italy	2,703	66.1	94.59
France	2,701	73.0	94.55
China	1,162	1.8	40.66
Switzerland	1,147	37.1	40.13
Japan	843	2.1	29.52
Netherlands	675	61.4	23.63
Russia	592	4.0	20.71
India	615	6.0	21.52
ECB	553	18.3	19.34
Taiwan	467	3.8	16.34
Portugal	422	90.3	14.76
Venezuela	393	36.5	13.75
United Kingdom	342	17.9	11.97
Lebanon	316	26.8	11.07
Spain	310	39.0	10.86
Austria	309	56.3	10.80
Belgium	251	40.4	8.78
Algeria	191	3.4	6.70
Philippines	170	11.2	5.94
Libya	159	4.3	5.55
Saudi Arabia	158	11.9	5.52
Sweden	146	13.5	5.10
Singapore	140	2.1	4.92
South Africa	137	10.4	4.81
BIS	132	N/A	4.63
Turkey	128	4.9	4.48
Greece	124	91.6	4.34
Romania	114	8.1	4.00
Poland	114	4.8	3.97
Thailand	93	2.0	3.24
Australia	88	7.0	3.08
Kuwait	87	18.6	3.05
Egypt	83	6.3	2.92
Indonesia	81	3.8	2.82
Kazakhstan	80	10.6	2.80
Denmark	73	4.0	2.57
Pakistan	72	17.5	2.52
Argentina	60	3.4	2.11
Finland	54	17.7	1.89
Bulgaria	44	7.2	1.54
WAEMU	40	10.6	1.41
Malaysia	40	1.2	1.40
Peru	38	3.2	1.34
Brazil	37	0.5	1.30
Slovak Republic	35	83.3	1.23
Bolivia	31	10.4	1.09
Ukraine	29	3.1	1.03

Not all countries are listed.

Notes

1. 1 tonne = 1.10231131 short tons.
2. Percentage share in gold of total foreign reserves.
3. 1 short ton = 29,167 troy ounces. Worth is calculated at $1,200 per troy ounce.

Sources

“International Financial Statistics,” International Monetary Fund, 2009.
“Gold reserve“, Wikipedia.
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Arkansas Bank Charges 82,563% Overdraft Interest

November 8, 2009 by rickety Leave a Comment

Bad check The fuss lately over bank fees has left me mostly disinterested. After all, fees are what other people pay — those folks who don’t know how to manage their money. Wrong. When it happens to you then it isn’t carelessness any more. It’s just the law of averages — sooner or later the fee devil will get you.

Too Little Money

When I was raising a family occasionally the bank would call and tell my wife that our account was overdrawn but if she would make a deposit that day there would be no fee. Those were the days when you each had a checkbook and tried to keep the register balanced. When the bank statement arrived each month you would reconcile it and discover your true balance. It is much easier these days because you can check balances online. So no more overdrafts. It was never a case of too little money but just poor timing.

A few years ago I became debt free and began putting surplus funds into rewards checking accounts. This earned me an interest rate of between 4% and 6%. Once in a while I would change banks to earn a better rate but leave the old accounts open to move funds back again if rates improved at the old bank or worsened at the new bank.

Just Poor Timing

On the 5th. I moved a sum from an Arkansas bank, leaving just $1.00 in the account to keep it open. I have a company that automatically charges one of my credit cards $3.31 a month, billed on the 4th. Naturally I set up my Arkansas rewards checking account to pay this bill so that it would count as a transaction. On the 6th. the $3.31 was posted, leaving me $2.21 negative and triggering a $25 overdraft fee. On the 8th. I remember the automatic payment and transfer $30 back to the bank account which will probably not arrive until the 10th. or 11th. Not a case of too little money but just poor timing.

So far in summary:

4th Nov: $3.31 billed by company.
6th Nov: $3.31 posted in bank account.
6th Nov: -$27.21 new balance ($1.00 – $3.31 – $25.00).
8th Nov: $30 transferred to cover.
10th Nov: Overdraft cleared.

Back-of-the-envelope calculation:

6th to 10th = 5 days.
$25 / $2.31 = 11.31.
365 days / 5 days = 73.
11.31 x 73 = 825.63 = 82,563% APR.

There you have it. Even people who think they are reasonably competent money managers (me) can make a slip. It isn’t the bank’s fault, it was me who miscalculated. It wasn’t a case of too little money but just poor timing.

I think I want to own a bank.
Rickety signature.

U.S. Government Debt as a Mortgage

September 17, 2009 by rickety 2 Comments

Today imagine that Congress has a fit of sanity and manages to balance the budget. They do it through a combination of spending cuts and tax increases. The dollar strengthens and there is more money because of interest that is not needed to pay for deficits. Congress’s approval rating soars and they decide to balance the budget from now on because the voters love it and so does the economy.

But there is still the outstanding debt of trillions of dollars. Congress in a display of unparalleled common sense tackles this by treating the debt as if it was a 30 year mortgage. In my scenario (sadly imaginary) Congress is able to secure a 3% fixed interest rate for 30 years. In the table below is the schedule of payments. I have included other rates of interest in the event that you think 3% is unrealistic.

The dollar amount of the debt is obtained from Treasury Direct’s Debt to the Penny, which I have rounded to the nearest billion dollars. The date in the top right-hand corner is the day the debt reading was taken. The highlighted figures are the yearly amounts paid (the sum of 12 monthly payments), depending on the interest rate. All dollar amounts are in billions. So for example, $13,616 billion, which is $13.6 trillion, just add nine zeros like so: $13,616,000,000,000.

I have been periodically updating the debt reading. It is scary how much this debt is rising. Truly we should avoid debt as we would avoid a plague. The sooner we start paying our mortgage the better. Default is not an option. Refinance now while interest rates are low.

Money Photo Credit: Andrew Magill

Rewards Checking: First Arkansas Bank & Trust

September 16, 2009 by rickety 2 Comments

A New Rewards Checking Account

Since Coulee Bank dropped their rewards checking rate from 5% to 4% I have been looking for another bank. There are several banks that still offer 5% on their rewards checking accounts but there is one difficulty — they all take local customers only. This didn’t used to be but gradually many banks have withdrawn from the national market. Hence I decided on a bank that is still recruiting customers nationwide (except California). However, see Updates below.

Now First Arkansas Bank & Trust offers only 4.4% (since reduced) but with one redeeming quality — the rate applies up to $50,000. For this you only need to complete the usual ten point of sale debit card transactions per month. Also the one direct deposit, ACH debit, or online bill payment per month. You have to agree to receive E-statements and sign into your online banking account once a month.

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Foreign Holders of Treasury Securities

June 24, 2009 by rickety 1 Comment

The top ten foreign holders of treasury securities.

China Buying Fewer Securities?

I have read in the news several times this year that China [is] Losing [its] Taste for Debt From [the] U.S. If that was true last year it appears that China has changed its mind. Chinese holdings of U.S. debt have risen in 12 of the last 14 months for an increase of 52% (see table below). Of the ten nations in the chart above, eight have also increased their share of the U.S. debt since April 2008. Of the 32 nations and “all others” tallied in the table below, their purchases of U.S. debt has risen a collective 26% in a year.

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Rewards Checking: First State Bank

May 15, 2009 by rickety 14 Comments

Less than a week after updating my list of banks offering Rewards Checking I was applying to some of those same banks to open an account. Deseret First Credit Union had dropped their rate from 5% to 3% but Coulee Bank still maintains 5% (now 4%) on their rewards checking. I am now short one bank so I go in search of a better return. Join me in my over six week long odyssey as I attempt to sign-up with out of state banks in search of rewards.

Choosing a Bank

Looking over the list of banks, which has changed from a few weeks ago, I had eleven to choose from that were open to out of state residents:

AmericaNet Bank
Bank of Asheville
Coulee Bank
Evantage Bank
First State Bank of Kansas City (eligibility recently restricted)
Franklin Bank & Trust Company
Heartland Community Bank
Malvern Federal Savings Bank
Noblebank & Trust, NA
Union State Bank
Valley Bank

I eliminated AmericaNet Bank and Evantage Bank because their high yield rate was only paid up to $10,000. This is much too low of a maximum so they are the first to be crossed off my list. Heartland Community Bank, Malvern Federal Savings Bank, and Union State Bank were put on hold because they have an additional requirement of one account access per month. This slight inconvenience could be offset by two of these banks’ higher maximums on which the first tier interest is paid. I already have an account with Coulee Bank with which I am receiving a decent rate, so strike them off the list. Franklin Bank & Trust Company, Noblebank & Trust, NA, and Valley Bank all require twelve transactions per month. This is a major disadvantage so they are out of the running.

Rewards checking at First State Bank

Of the two remaining banks, First State Bank of Kansas City (eligibility recently restricted) Bank of Asheville both have, or appeared to have, confusing sign-up web pages. I decide to go with the former as it seems to be a tad clearer. Later I found the sign-up page at First State to be clearly posted, I just missed it the first time around.

Applying On-line

The worst part of Rewards Checking is that in many cases you are dealing with a small bank that is new to signing up out-of-state customers over the Internet. As an example of a drawn out process read about Lee County Bank and Trust.

The time to sign up can be from two to four weeks, or even longer. With these small banks I found the process is very similar. If the bank does not drop its interest rate, it can be well worth the effort. If you have not gone through the process of opening an account with a small out-of-state bank, perhaps the best way for me to describe it is to keep a daily log. That way you can get a flavor of what to expect. I started with First State, then switched to Heartland, and then switched back to First State. While I have a 43 day log, the time from start to finish with First State was three weeks, which is about average. Enough said, here is my log:

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Jesus Christ Teaches About Money

April 11, 2009 by rickety 4 Comments

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This is my Easter Sunday talk I will give at church tomorrow. For a more traditional message watch the video.

Speaking In Church

I got a phone call from Brother Platt on April 1st asking me to speak in sacrament meeting. I thought it might be an April fool. When Brother Platt said that the bishopric needed a good speaker for Easter and they thought of me then I knew for sure it was an April fool.

On the 22 January 2009 President Obama signed an executive order that in part says, “…to be sure that our policies and practices comply with all obligations and are sufficient to ensure that individuals do not face torture and cruel treatment….” It appears that Brother Platt is not complying with this executive order — he’s still asking members to give talks.

My family enjoyed listening to all the sessions of General Conference. But half way through the last session on Sunday afternoon all of our family fell fast asleep. Two of Jake’s friends who were with us were most co-operative — they fell asleep also. We awoke to hear President Monson give a special message which we felt was just for us:

May we long remember that which we have heard during this conference. I remind you that the messages will be printed in next month’s Ensign and Liahona magazines. (Thomas S. Monson, “Until We Meet Again,” 179th Annual General Conference, April 2009)

The Life of Jesus Christ

I was requested to speak on the life of Jesus Christ. You all know a lot about His life. You know about the birth of Jesus; the friends of Jesus (John the Baptist and the twelve Disciples); the teachings of Jesus (the Sermon on the Mount and Parables); the miracles of Jesus (His power over nature, disease, and death); and the trials of Jesus (death, burial, and resurrection). In the time I have alloted I will concentrate mostly on the parables of Jesus and what he taught us about money. I will quote from our leaders and also I will add my own two shekels.

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