Natural beauty in investing may happen very rarely. Despite all I have learned, there is a lot more in investing that I do not know. However, I know what my expectations are and I know what my limits are, so when it comes to managing my money, those are the most important things to know. Beyond that, my opinion has very little influence in the overall marketplace. Regardless, it is beautiful when I learn people I respect share my same opinions.
My favorite television show is "South Park," and tonight was the second episode of their sixteenth season. It was entitled "Cash 4 Gold," and as soon as I learned that much about it, I was immediately excited to see it. I knew they would have fun poking fun at the Cash For Gold places, but as the episode played out, it brought to life my personal opinion on investing in gold, which made my heart smile.
My former-roommate (who's currently a highly successful investment banker) told me a couple years ago that the biggest use of gold today is for making jewelry in India. If that's the source "demand" of gold, then the rest of the marketplace's "demand" is bunk! It does not surprise me that the American investors have gone from high-tech stocks (which was a natural bubble) to the rest estate market (which was a bubble that got inflated by a lot of hot air), and now Pat Boone's "Gold IRAs" have taken the advertising time and space previously held to hock REITs. For the record, there is no Gold IRA anymore than there is a Green IRA or a Red IRA. The marketing ploy of that commercial alone is absurd.
In no uncertain terms, the "South Park" episode drew correlation between the elderly population buying items on Home Shopping Network and the excessive supply of "jewelers" who are ready and able to purchase gold. Although the episode pinpointed how unbalanced the supply and demand for gold are in this country, it opted against targeting those individuals who are encouraging people to invest their IRA and other retirement accounts with gold. Perhaps the average person is not exposed to those ads as often as I am, or (unfortunately) they aren't smart enough to understand that a spoof is not a good method for investing, and that episode may insire another several thousand wannabe-Cartmans to move their money to gold.
I sold a gold ring for my best friend a couple weeks ago, which I absolutely HATED to do, but I went to a jeweler who had been buying gold for as long as I have been living in my current location (over 13 years now), so I felt as though she got a good deal. Immediately after the sale, I started kicking myself because I wish I had thought to "shop" it around to a few of these nefarious "Cash For Gold" places, and see how their offers stood up against this place. According to "South Park," we would likely have been offered a high of $8.75 or a low of a seven-layer Taco Bell burrito.
In reality, gold is at a pretty big high right now, so it's a SELLERS market. I am so weary of the metals market right now that I told my friend to NOT sell gold at first, and then I realized that this was the best time to SELL gold since she was interested, so I convinced her to sell and she got $50 for an otherwise worthless piece of jewelry.
Although, I hate to think how much her mother paid to give it as a gift however many years ago.
Thursday, March 22, 2012
Saturday, March 10, 2012
Financial IQ Score
There is one important (critical, even) element of your financial lifestyle that I have neglected to mention previously in this blog, and that is your Credit Score. Not only have I failed to mention it in this blog, but honestly, and I should be ashamed to admit it, I have neglected my own credit score for the past 10 years, which was the age by which my mother required us to be financially self-sufficient.
In terms of finance, your credit score is a far better measure of intelligence than your IQ. Sadly, I didn't even know what mine was. All I knew is that it had to be decent because, when I bought my convertible in 2007, the salesman confided that, after his bosses saw my credit score, he wasn't allowed to let me leave without a sale.
Fortunately, this week I took that sizable step of getting my credit report from all three bureaus. Honestly, I was planning to approach each of the three bureaus independently and find out the score myself instead of paying someone else to do it, but that's usually because the expense is $100+/yr from most of the companies offering the service.
However, the last time I was at my bank (Wells Fargo), I saw a whiteboard offering to provide your credit report for $1. I didn't think much about it since the purpose of my visit was only to withdraw money to pay my mortgage at the bank across the street. But a couple months passed since then, and as I went to the bank, I was ready to inquire about it. Unfortunately, their whiteboard was now reading another advertisement, so when the teller asked if there was anything else they could do, I proactively inquired if the offer was still valid. He said it was, and shortly thereafter, sat me down with a personal banker.
He printed the scores for me, which were very, very good thankfully, and then segued into offering a separate credit card through the bank. He prefaced the fact that the card would have 0% interest for nine months, and unbeknownst to him, I am about six months away from starting a new career in law, so (ideally) I could use this card for the next six months and then start paying it down over the last three. The card was ideal for my current situation (especially since I am having trouble paying off my current credit card each month). I agreed, and we scheduled a follow-up meeting, and then I went across the street to the next bank to pay my mortgage.
At that bank, I was approached by a Personal Banker upon entering the door. He asked why I was there (politely) and then offered to help me. I don't know whether he knew the paperwork in my hands were my stellar credit report or not, but we paid my mortgage and then he went on a high pressure push for moving my assets over to the bank.
Now, the reason I pulled my accounts from this bank (where I had banked for over 13 years) last year was when I was quitting my job and going back to school, their checking account would have come with a monthly fee of $25. Initially I opened up a new bank account with them where the balance to avoid the fee was significantly lower, but then Wells Fargo blew them out of the water with their checking account, so I closed that new bank account at a different branch through the same bank. As it turned out, there was a $25 fee to close the new account and they had signed me up for the credit card that I declined when presented with the offer.
Cut back to current day, and their new sales pitch is that if I bring over one of my retirement accounts, then I would qualify for free banking across the board, and also (and this was the huge no-no of any aspiring salesmen) their retirement plans were superior to mine. As we know through this blog, my account is self-managed. While the comment was supposed to be directed at Vanguard, it was more of a personal attack on my own ability to manage my account. Albeit, it was a blind attack since the blabbermouth clearly didn't know what he was saying would be interpreted so differently, but nonetheless, I left slightly insulted and very disgusted.
The entire conversation with Wells Fargo rep had nothing to do with my retirement accounts, even though my balances there are way higher and the interest rates at Wells Fargo are way higher. Therefore, I have decided to move a larger amount of my savings account to Wells Fargo this month. Not my investment accounts, mind you, but my savings account. As we know from Vanguard's Investment Philosophy, saving is for the short-term, and investing is for the long-term.
Regardless, it was an eye-opening morning to see how competitive the financial corporations, especially for high balance account holders with high credit scores.
In terms of finance, your credit score is a far better measure of intelligence than your IQ. Sadly, I didn't even know what mine was. All I knew is that it had to be decent because, when I bought my convertible in 2007, the salesman confided that, after his bosses saw my credit score, he wasn't allowed to let me leave without a sale.
Fortunately, this week I took that sizable step of getting my credit report from all three bureaus. Honestly, I was planning to approach each of the three bureaus independently and find out the score myself instead of paying someone else to do it, but that's usually because the expense is $100+/yr from most of the companies offering the service.
However, the last time I was at my bank (Wells Fargo), I saw a whiteboard offering to provide your credit report for $1. I didn't think much about it since the purpose of my visit was only to withdraw money to pay my mortgage at the bank across the street. But a couple months passed since then, and as I went to the bank, I was ready to inquire about it. Unfortunately, their whiteboard was now reading another advertisement, so when the teller asked if there was anything else they could do, I proactively inquired if the offer was still valid. He said it was, and shortly thereafter, sat me down with a personal banker.
He printed the scores for me, which were very, very good thankfully, and then segued into offering a separate credit card through the bank. He prefaced the fact that the card would have 0% interest for nine months, and unbeknownst to him, I am about six months away from starting a new career in law, so (ideally) I could use this card for the next six months and then start paying it down over the last three. The card was ideal for my current situation (especially since I am having trouble paying off my current credit card each month). I agreed, and we scheduled a follow-up meeting, and then I went across the street to the next bank to pay my mortgage.
At that bank, I was approached by a Personal Banker upon entering the door. He asked why I was there (politely) and then offered to help me. I don't know whether he knew the paperwork in my hands were my stellar credit report or not, but we paid my mortgage and then he went on a high pressure push for moving my assets over to the bank.
Now, the reason I pulled my accounts from this bank (where I had banked for over 13 years) last year was when I was quitting my job and going back to school, their checking account would have come with a monthly fee of $25. Initially I opened up a new bank account with them where the balance to avoid the fee was significantly lower, but then Wells Fargo blew them out of the water with their checking account, so I closed that new bank account at a different branch through the same bank. As it turned out, there was a $25 fee to close the new account and they had signed me up for the credit card that I declined when presented with the offer.
Cut back to current day, and their new sales pitch is that if I bring over one of my retirement accounts, then I would qualify for free banking across the board, and also (and this was the huge no-no of any aspiring salesmen) their retirement plans were superior to mine. As we know through this blog, my account is self-managed. While the comment was supposed to be directed at Vanguard, it was more of a personal attack on my own ability to manage my account. Albeit, it was a blind attack since the blabbermouth clearly didn't know what he was saying would be interpreted so differently, but nonetheless, I left slightly insulted and very disgusted.
The entire conversation with Wells Fargo rep had nothing to do with my retirement accounts, even though my balances there are way higher and the interest rates at Wells Fargo are way higher. Therefore, I have decided to move a larger amount of my savings account to Wells Fargo this month. Not my investment accounts, mind you, but my savings account. As we know from Vanguard's Investment Philosophy, saving is for the short-term, and investing is for the long-term.
Regardless, it was an eye-opening morning to see how competitive the financial corporations, especially for high balance account holders with high credit scores.
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