Money in the Bank

Russell Heimlich wrote to share his method for organizing bank statements. He uses a three-ring binder, a stapler, and a hole-punch. I really like this method — it reminds me how we handle the finances at work. It’s a vast improvement over my system, which literally involves a series of shoeboxes.

In the morning I meet with some of the top lenders in Australia to talk about industry standards. My presentation covered the varying issues with standards bodies and how leadership from the banks them selves can really jump start the process. This event was a lot like the insurance event but focused on lending within the banking industry.

Court gawkers have been witnessing a wild match of words between Floettl and former Bawag CEO Helmut Elsner who has been stripped of most of his assets by the court. Elsner was certainly the most despotic CEO Austria's banking industry has ever seen. He is infamous for his quick loss of temper and a tendency to mistreat subordinates.

In my initial post about FPS, I said that I thought FPS would change the online banking industry. After spending the weekend with it, I’m even more convinced of that! There are some issues and short-comings that are causing frustrations for people.

Brendan O’Connor spends his time studying the underlying security of the banking industry, specifically, the online banking and bill payment services. One error in security in that field, and customer’s information is completely exposed, which combined with e-statements, tax forms, and electronic copies of the checks that current online banking services keep could have a rather dire impact on customer’s finances. Discoveries from the talk? All those images the banks display to you to prevent phishing are sourced from a single database with the primary key into that database displayed in the ALT field.

ING DIRECT is an internet bank with very good interest rates on insured savings and checking accounts. ING recently launched a mobile banking site which lets customers view balances and transactions and transfer funds between accounts using their mobile phones. The site works fairly well but has some issues.

I do not think I have fully appreciated the concept of an Emergency Fund until now. It’s been 2 months since I’ve brought home any income due to my little Worker’s Comp situation and my goodness a healthy emergency fund would have helped us tremendously!

Nothing else comes close to a solid, value for money, long-term investment like education. It may be a weekend course on Flower Arranging or it might be a Masters degree in Astrophysics – the costs in finance, time and effort will vary but education and training is always a priceless investment in yourself. If I have only one piece of advice to anyone its to spend your outer resources on your inner resources and spend your life learning.

Bouncing a check. Some banks charge up to $30 for each bounced check (some also charge for checks that are paid when your account has non-sufficient funds). Monitor your account often to avoid such charges.

Students today face many big questions when looking at going to college. Which college is right for me? What should I major in? But even more importantly is the question - How do I pay for college?

One key thing to keep in mind, though, is that just because your company is serving a particular customer, you may not want to “be” like that customer. Taking the banking industry as an example, which person would you hand your hard-earned money to:

Branding is extremely important in the banking industry. Your bank needs to stand for something! You will not be successful in building mindshare with a "me-bank-too" marketing approach. Many bank executives may think that branding is expensive or not possible in our industry. This is not true!

The competition within the banking industry in Europe has reached a new level in the last couple of years. In particular an increasing competition is driven by efficient foreign credit institutions that entered a particular national market as well as by existing so called non- and near banks, which extended their services. The rate of new entry varies across EU member states. Different entry strategies have been noticed in the past: Organic growth from a zero base, mergers and acquisitions, sideways moves into banking from organisations already linked with financial services, partnerships as well as joint ventures.

Gee. That sounds awfully familiar. A repeat of the 1980s, complete with foreclosed mortgages, shuttered lenders, lawsuits, and federal agencies which seemed to ignore the brewing storm clouds. The result back then was that several individuals went to prison and one federal agency was dissolved and its duties taken over by the FDIC.

The impression of the Great Depression has been firmly imprinted on the minds of individuals, ages 60 to 93, born 1912 to 1946. Most have vowed to themselves they would never again suffer the lack they suffered during the Great Depression. Hence, these individuals are frugal; budget conscious savers who disdain credit and speculative investments. They sought the safety of guaranteed investments and the security of insurance companies who weathered the Great Depression. With the evolution of Federal Deposit Insurance Company (FDIC), they spread their money across several banks. Although they have money in banks and stock brokerages, they do not really trust banks or stock brokerages. They trust FDIC and SIPC (Security Investor Protection Corporation).

You’d be surprised to know that on average, the analyst has no better shot at predicting what would happen in the stock market more than you by flipping a coin. This is not something that happened only this year. It happened in the past and would probably continue to happen as people still struggle to be fooled by prophecy.

We've seen exactly this happen in the US during the S&L scandal of the late 80's. The sister body to the FDIC, the FSLIC (which covered S&L's specifically) went insolvent and the entire debacle is said to have cost the American taxpayer $150 billion.

The program is limited, government officials say, to tracing transactions of people suspected of having ties to Al Qaeda by reviewing records from the nerve center of the global banking industry, a Belgian cooperative that routes about $6 trillion daily between banks, brokerages, stock exchanges and other institutions. The records mostly involve wire transfers and other methods of moving money overseas and into and out of the United States. Most routine financial transactions confined to this country are not in the database.

To play the unassuming savings and loan clerk, Capra wanted Jimmy Stewart who he had previously worked with in You Can’t Take It With You (1938) and Mr. Smith Goes To Washington (1939). But coming back from World War II, the thirty-seven year old Stewart was no longer the easy going man about town he had been in the thirties. The former Academy Award winner for The Philadelphia Story (1940) had led a thousand men in bombing missions in the European theater in hard to maneuver B-24s.

Cause i know how much they wanted this child and all the trouble they went through to even get it and it put everything in perspective that no matter how bad a day im having or how much the scale says it cant really top that and that the stuff i worry about is minor to say the least. And that i should be happy my problems are so minor. The worst part is that they are a couple that i look up i mean they have a solid marriage(not going to say perfect cause nuttin is perfect), money in the bank, good jobs,everything that i wanna have by the age they are at. And it seems like my mom was right that u cant have everything cause the only thing they were missing and wanted was a child.

In the US, whenever you deposit in a savings account or buy a CD you are indirectly loaning money to borrowers. The bank uses your capital to make the loans. But its better for you to loan to the bank - you are much more likely to be paid back, and your money is much more available if you need it. If a single borrower defaults the bank can still repay you. And even if the bank fails, the FDIC will cover you up to $100,000.

Put my money in the bank so that I won’t miss any interest on it!

Liquidity is the ease with which an asset can be converted to cash. Other than cash in your wallet, the most liquid investment is bank savings. Shares (or stocks, although I will continue to call them shares in future) are very liquid, or easy to sell and convert to cash, and real estate is generally perceived to be relatively illiquid. Defining your investment time frame will help minimise liquidity risk, the risk of you needing to cash out of your investment and not being able to do so. For example if you put all your savings into a house and then receive a series of unexpected bills, you may have to sell your house to get the cash to pay them, while if you had put the money in the bank you could have accessed it more easily.

The banking industry seemed rather slow to recognize and respond to phishing threats. Or if they did recognize the threat that phishing posed to themselves and to their customers, the hardest decision to make was, “how to combat it?” For years and years, authentication meant supplying a username and a password for online account holders. Now banks are providing alternative means to prove to their users that their own websites are authentic, and the bank is who they say they are.

It’s like I wrote in my Christmas cards this year, and even those were at a minimum. I said, “There is not enough time on the clock, money in the bank, room in my house or energy in the body.”

3. The Great Depression 1930s weren't good years to be Republicans, and in 1936, Democrat Franklin Roosevelt was reelected overwhelmingly with 60.8% of the vote to 36.5% for Republican Alf Landon who had no chance to convince the electorate the New Deal was corrupt and wasteful when it was helping a lot of desperate people. Roosevelt asked for and got a mandate from the public to continue his progressive agenda that included the landmark Social Security Act (now in jeopardy in the age of George Bush) and other important measures that included establishing the FDIC, insuring bank deposits, the SEC, regulating the stock exchanges, and the NLRB with the passage of the Wagner Act that was the high water mark for labor rights.

Next, I noticed that the “Initiative” was sponsored in part by Chase Bank… now I have nothing against them, they are a great organization, we even bank with them. However, wouldn’t a group of creative agencies or a technology firm make more sense to partner with than a bank? Nothing “cool” about the banking industry.

FDIC has issued guidelines encouraging banks to make “small, short-term loans,” acknowledging that the demand is there.

Disintermediation is defined by Wikipedia (which disintermediated paper-based encyclopedias) as “The term was originally applied to the banking industry in about 1967: disintermediation referred to consumers investing directly in securities rather than leaving their money in savings accounts, then later to borrowers going to the capital markets rather than to banks.” The Internet has had a strong impact in disintermediating several industries, with Amazon disintermediating book stores and later retailers in general. iTunes disintermediating music stores and record companies, Netflix disintermediating Blockbuster and other video chains, CraigsList disintermediating classified ads in most newspapers. If we think about it we can see that the Internet started a revolution of disintermediation.

‘Money in the bank’ is a good, safe way to lose money. A couple of months ago, I renewed some fixed deposits at 7.25 per cent per annum. At today’s income tax rates, almost a third of this will go into the care of Shri Chidambaram, leaving a net interest rate of 4.9 per cent, which is less than the official rate of inflation. So the money I manage is actually losing value.