Wells Fargo or Redneck Bank…Do you know which bank is backed by the FDIC??

The answer to this question… BOTH.
I got my blogs first question from a pretty cool dude named Jeremy.

He asks….

I read your post about getting a better rate on my savings account . Makes sense, but how can one verify that the bank is legitimate? I’d rather not just throw money at somewhere I’m not sure of.


PS Wachovia has really been making me angry with their tiny savings rates. Before I started to be so disgusted with them I had quite a bit of money in their bank. Makes me wonder how much money you have to have in there to get some respect.

A valid question for sure, and one I didn’t address is my previous post about online savings accounts. So how can one go about making sure their hard earned cash is safe?

The most important thing to look at, when selecting what bank you want to hold your savings account with, is verification that “bank x” is backed by the FDIC (Federal Deposit Insurance Corporation). Essentially, being backed by the FDIC means if bank x sucks at doing their job and they can’t afford to give you back your money, Uncle Sam will pay you back instead. If you put $10K in the bank and six months later they pull a WaMu, you will get all $10K back from the fed. I can’t stress this enough, being backed my the FDIC is uber important!

Do not sign up with a bank just because they have a phenomenal interest rate – chances are, if their interest is WAAAAY above competitors something fishy is going on -. If you put $10K in a bank that is not backed by the FDIC and that bank fails, then you are, how do we say… SCREWED! You probably will end up losing all of your hard earned money. Most banks advertise on their home page if they are FDIC insured (they know it is a huge selling point). If you have any doubts that the institution your looking in to may not be, you can always go here and verify.
As far as the interest rates go, I feel ya on getting some pretty crappy rates right now. When I opened my Countrywide Online Savings account I was earning a little over 3% on my money, less than a year later I’m earning a dismal 1.6%. I personally don’t chase interest rates. Sure there are banks out there that have better rates than mine, but it is hardly enough for me to go through the hassle of managing yet another account.

For example, say Joe Six Pack puts $20K in to a Countrywide account tomorrow and lets it sit for one year at 1.6%. At the end of the year Mr. Six Pack’s account balance would be $20,320. If you took that same $20K and put it Zions Bank (currently at 2.15% interest) and let it sit for one year, your balance would be $20,430. The Zions account earned you an extra $110 over the course of the year. For some, that extra $110 may be worth chasing, and if so good for them. Personally, I prefer picking a relatively solid performer and sticking with it (unless its rates are SEVERELY lower). I initially signed up with Zions Bank because they offered one of the highest interest rates in the country, but when I found out I had to physically mail in my deposits I quickly said “Peace Out Zions” (I prefer to do everything electronically).

As the title of this posts alludes, Redneck Bank is, as far as my research has shown, legitimately backed by the FDIC and a subsidiary of The Bank of the Witchitas. Although their 3.1% offer is enticing, I’ll stick to my countrywide account for now.

Anyone else have any interesting insight in to the online savings accounts?

Keep on saving!

Heck Yeah, I’m in the press….kinda!

I just found out I had my first appearance in the press!!! I was checking out what web pages have referred people to this site and came across an article on MSN Money. I read through the article and found that Karen Datko, the author, had included a whole paragraph referencing one of my previous articles. The MSN article can be found here and my blog post about that topic can be found here . I feel like I just won an Oscar or something… I would like to thank my mom, my friends, all the fellow bloggers that believed in me, and McDonalds… haha. Thanks again MSN Money!


"A dilemma"….follow up

About two weeks ago I posted about a dilemma I was having. For those unfamiliar, I was unsure of the amount of my disposable income I wanted to allocate to my “future house fund” and how much I wanted to throw at my student loan. That article has been my most read post and by far the most responded to. After mulling it over, running numbers, and deciding what I wanted my goals to be, I have reached a conclusion. I am committing to throw $1,000 each month towards that bad boy. That was the overwhelming recommendation from each reader that responded! I think in my head I was justifying the necessity to hoard my cash and put it all in my savings, when this clearly opposes mathematical reasoning.

Although I still believe personal finance needs to remain personal, I agree the numbers need to be strongly considered. I became focused on the desire to purchase a house (taking on more debt) when I should have been concerting my efforts towards breaking up with Sallie Mae.

This decision couldn’t have come at a better time! With a little over $12K in the bank, my Emergency Fund is fully funded (6 months pay) and allows me the freedom to throw as little or as much money as I’d like at my future house fund, or even better, towards my school loan.

So on this day, April 3rd 2009, I commit to putting a minimum of $1,000 to my school loans each month. Thank you fellow bloggers for whispering wisdom in my ear and opening my eyes… hey its like that Ace of Base Song… “I saw the sign, and it opened up my eyes, I saw the sign!Booya for Ace of Base, Booya for sweet advice from bloggers, and double Booya for paying down debt!

I am punching Sallie Mae in the face!

Would you pay $10MM for a Hanger?

Have you ever heard anyone say “There is no reason to reinvent the wheel.” or”If it’s not broken, don’t fix it”? Well if so go tell that person they owe you $10 million. I did a little google millionaire research and came across Devon Rifkin, a self made millionaire. I’ll give the gist of the article, but if you want the whole story or to look at other millionaires go here

Devon Rifkin,33
The Great American Hanger Company/Hangers.com, Miami
Projected 2007 Sales: $10 million-plus
Description: Manufacturer, wholesaler and retailer of clothes hangers

Frame of Reference: The fact that Devon Rifkin never attended college is just a tiny footnote in his success story. The fact that he has made millions selling hangers is slightly more unique. But for Rifkin, defying the standards means nothing if his business isn’t successful–or if his team isn’t sharing in the success. Says Rifkin, “To me, people have made the biggest difference because they’re the face of the business.”…

Essentially, homeboy was like “I don’t want to work for my dad so I guess I’m gonna make hangers and call my business The Great American Hanger Company. Oh and I’ll make millions doing it to.” That right their is ballerrific (combination of baller and terrific). It’s not like there was a world shortage of hangers and someone desperately needed to step up to the plate and provide, unless I missed something? But seriously, this guy took a simple, ordinary, everyday household item and reinvented the wheel. This got me thinking “What everyday necessity could I reinvent that will lead to my success?” I came up with two ideas….

…if I put “The Great American” before my product it will make me a millionaire right? Seriously though, it’s cool to see an average joe take a normal product and make it something that companies and people want. It should also serve as encouragement and remind us if 33 year old Hanger Guy can do it, so can we. You don’t have to invent something great, you just have to take something and make it better. Get out there and go reinvent the wheel.

New Website = Tight!

If you’re looking for One Chance To Live you’re at the right place. This is the new PERMANENT site. Everything should be the same, except the name 🙂 Take a look around and thanks for stopping by!

My Expenses: February 2009

Each month I’m going to try and post a list of my monthly expenses. This may or may not be of interest to my readers (sorry if you find this boring). If nothing else, it will allow me the opportunity to look back and see how my spending habits have changed over the long term. So here it is full disclosure baby… this is where my February cash flow went…

Explanation of Income:

Gift: This is money that I wasn’t expecting to get that fell my way. $500 this month was a great little bonus. I’m always stoked whenever this row is bigger than zero!

Interest Inc: Any interest that I may collect from investment/savings accounts. I’m a little creeped out that it worked out to $6.66 this month. Dear, Satan, please stay away from my bank account 🙂

Salary: My take home pay from the day job. I get paid every two weeks, so twice a year I get an extra paycheck for the month. May and October is when this joyuous occasion takes place this year.

Tax Refund: Self explanatory. (This was my Federal refund)

Tutoring: Something I do in my free time to make a little extra cash flow. This income varies widely from $200 to $1200 a month. At $772 I got no complaints.

If anyone wants to contribute money to any of my income categories, I wouldn’t be opposed, as all gifts are accepted….haha.

Explanation of Expenses:

Auto: Any maintenance and fuel costs associated with my car or motorcycle. This category excludes vehicle insurance. I’m telling you that motorcycle saves me some green…even though it is kinda dangerous.

Cash: Any cash withdrawals from an ATM.

Charity: $300 big ones split between a Christian Radio station I listen to and my church.

Dining: The dollar bills I be droppin’ when I take my lady on a sweet date (or when I’m alone and craving a tasty burrito)

Gifts: Any money I spend on someone else. In case you didn’t get the memo, February was Valentines Day so spending was a decent amount higher than normal months.

Groceries: Any food that I buy from a grocery store. My goal is to keep my dining and grocery expenses at about $250 each month. I get really happy when I am under that amount, like this month!!

Insurance: Includes car, motorcycle, and renters insurance.

Interest expense: This is my school loan . I have a monthly obligation of $178, but as mentioned in my other posts, I pay about double that each month. I took the $330 I  normally put towards the loan and combined it with the $500 unexpected gift to take a small chunk out of my $25,000 balance. It wont be long till I kick Sallie Mae to the curb. Booya!

Reimbursement: This category gets a number put in it when I send the mob to go collect any money people owe me.

The overall total is the cash I had leftover after all my expenses. This goes straight in to my online savings account and, either stays there, or gets put in my Roth IRA.

Sooooo, this is where my money goes. I try to keep it in line with my spending plan a.k.a da budget. February was a pretty darn good month and I didn’t really break the bank in any one category. Keepin’ my life in order is super important to me and I love knowing where every dollar I made goes. Kinda weird to think you don’t know what I look like, but you know how much money I spent on household items in February. Does that make you creepy? Or me?

Carpe Diem,

Maybe I should start a Music Label?

So as I mentioned on my Friday post, I made a Budgets are $exy rap for J. Money. I had so much fun making the rap for his site, I thought it was only appropriate that I made one for mine. So without further ado, I bring to you the Punch Debt In The Face official Rap…

If the player doesn’t work click here.

The lyrics…

Take a minute ya’ll just sit right there and listen
To the finance blog rap that you don’t want to be missin’
Via my spittin’ I shall be reminiscing
About my fight against debt, you know I wont be quittin”

It all began, just five short years ago
When I signed my life away to get a student loan
Two-Fifty benajmins is the amount that I owe
It’s time for this boy to start making cash flow

I got my first job, some call it a career
Doing all I can to make my debt disappear
Learning about money, this was a new frontier
With my love for PF, I’m sure to persevere

It started with contributions to my 401k
Just a couple months later my Roth IRA
Then paying down debt to get rid of Sallie Mae
I be bloggin’ about money every single weekday

Learning about finance is sure to make me grin
My dollar works hard it’s lookin’ for some friends
With Abraham Lincoln and his boy Benjamin
I be breakin’ down debt like that wall in Berlin

Money in the bank (I got stacks)
Bloggin’ everyday (I cut tracks)
Spend less than you make, Save more than you spend
And you’ll be a rich dude straight ballin’ in the end.

I never would have thought rapping could be so much fun. It’s been a blast producing three finance rap songs over the last two weeks, but I think it’s time I retire and stick to blogging.

*I’d like to give a special thanks to my roommate for helping me produce this little gem*