GET STARTED WITH A $50 BONUS!

Oh, tell me more!

I’ve stayed away from purchasing any individual stocks or ETFs… until now. This Sharebuilder offer finally convinced me to dive in. The offer code is INVEST50, and you can access it here:

http://www.sharebuilder.com/invest50

Opening an account is simple and can be done completely online. If you have an existing ING Direct account, you can link it to Sharebuilder after your account is open. Because ING now owns Sharebuilder, one nice benefit is that you can make immediate transfers between linked ING Direct and Sharebuilder accounts. Nice!

Pricing Programs and $4 Automatic Investments

Let’s keep this simple: Sharebuilder offers three different pricing programs. Two of them cost a monthly fee and one of them is free. Unless you want to trade frequently, I suggest sticking with the free option.

In the Basic (free) option, you can buy stocks for a $4 commission, but only as part of their Automatic Investment Plan (AIP). For someone who does not care about real-time pricing and just wants to “average” their way in, the AIP is neat. Essentially, you just:

1. Select the ticker for the stock or ETF that you want to buy and select a dollar amount that you want to invest.
2. Create an investment schedule – weekly, monthly, one-time only, or (my personal favorite) invest when funds are available.
3. Set a funding schedule – choose how much and how frequently to transfer from your linked checking/savings account.

Once your schedule is set, Sharebuilder handles the rest. All automatic investments are transacted on Tuesdays.

Money Market

All cash that you transfer into Sharebuilder is held in a money market account (BDMXX). As of this writing, the money market has a 7-day yield of 1.76%. While it is better than nothing, I’d rather see Sharebuilder offer something more along the lines of their own savings account (currently earning 2.75%) as a cash sweep.

Two Free Real-time Trades

Once your account is open, you can apply for another promotion. If it works, you will receive two FREE real-time trades. Normally, real-time trades are $9.95 each, so this is a good value. I’m not sure how long this promotion will last, but it’s worth a shot:

In your Account Overview, click the tab for Promotions. Enter the code RTTSITE.

If it works, you will receive a notice that you qualified for two free trades. Here’s the e-mail confirmation that I received:

I just used the two credits yesterday to buy my first individual stocks in my life! In case you’re curious, I decided to jump in and buy some shares of GE and INTC. Both stocks offer decent dividends, and I don’t plan to sell for at least 5-10 years. Maybe I won’t completely lose my assets.

All-in-all, I’m pretty happy with Sharebuilder. The interface is intuitive (to me), automatic investing works fluidly, and I appreciate the integration with ING Direct. If I were a more active trader, I’d probably look at something like Zecco. For my modest needs, Sharebuilder works fine.

The $50 bonus helps, too.

Here’s what Revver has to say about revenue sharing:

When you upload your video to Revver, we attach an advertisement and our unique tracking technology to it. We call this “Revverizing.” There are two ways that your video and the associated ad can generate revenue: from impressions/views of the ad (CPM ads), and from clicks on the ad (CPC ads). When a viewer sees a CPM ad associated with your video, you get paid, no click required. When a viewer clicks on a CPC ad associated with your video, you get paid. In both cases, Revver splits the revenue with you 50/50. Please note that not every impression or click will result in revenue, as some advertisers only buy traffic from the US and Canada, and also multiple repeated impressions or clicks from a single user on a single video are scrubbed as duplicates.

Allow me to translate that into very simple words:

• You host videos – earn a 50% revenue share
• You share videos – earn a 20% revenue share

The more you host (and share), the more you can earn. Once you earn $20 or more, Revver will send you a payment via PayPal.

Unlike YouTube, Revver has no duration limit for videos, but the maximum file size limit is 100 MB.

I’ve only uploaded a few videos, and my most popular video so far is of my rabbit hopping around on my couch,  Here it is:

Rabbit Goes Crazy on Couch

So far, I’ve only earned about $0.75. No, it’s not much, but I haven’t put much effort into it, either. I didn’t make the video below, but gosh, I wish I did. I can’t stop laughing while watching it!

Whee!

The most popular video on Revver by far shows two guys having a ton of fun with Diet Coke and Mentos. Unbelievable. These guys have received well over $50,000 for their crazy antics.

All this shows is that you only need a camera and a little creativity to earn a decent amount of side income. Sure, I have a few complaints about Revver – namely, (1) it takes a long time for your videos to become available once you upload them, and (2) many of the comments are just people bleating for others to view their videos. Lame.

For me, Revver serves one main purpose: it provides a free, unlimited place to store my home videos. The revenue sharing element is an ancillary, but welcome, benefit.

A new competitor to companies like Prosper and Lending Club has recently arrived – Loanio.com, which functions in a reverse-auction manner. You can sign up as a borrower, a co-borrower, or a lender. I went with the lender signup. Here’s how it works, essentially:

When you open an account as a lender, you must link an existing checking account to Loanio and transfer in at least $100 (takes several days for the money to show up). Be warned: instead of doing a trial deposit, Loanio will actually deduct a few cents extra from your account as part of the verification process. Once the money finally shows up in your Loanio account (took 6 days for me, but that included a weekend), you will have to verify the “extra” amount that Loanio deducted. Once it’s verified, you are free to bid on loans as you please.

Borrowers and Credit Quality

As with any kind of peer lending service, you must carefully scrutinize the loan in question before you decide to bid. When borrowers sign up at Loanio, they undergo a credit check (Experian) and their credit information is available for lenders to view. Based on their credit/income information, borrowers are given a grade from A+ down to E. I haven’t found any direct information from Loanio as to a minimum credit score allowed for borrowers, but one E-rated borrower that I found had an Experian Vantage Credit Score ranging from 569-603. Ouch.

When I eye potential borrowers, one of the main elements I examine is the delinquency section. Here’s an example credit profile from a D-rated borrower:

Note the two current delinquencies and the twenty-four past delinquencies! Um, I don’t think I’ll be handing this guy one red cent!

On the other hand, here’s the credit profile of a borrower with an A+ ranking:

Yeah, that looks better, though the large amount of revolving credit balance is alarming.

Of course, you’re free to bid on loans that you deem worthy, and I’m going to err on the side of caution. I suspect that many borrowers on peer-lending sites are there because they absolutely could not get a loan elsewhere, so practice due caution. On the other hand, this type of service is greatly helpful for people who simply want to do something like consolidate high-interest credit card debt, and peer lending is certainly a better option than getting a payday loan!

The Bidding Process

Once you’ve found a worthwhile loan, the bidding process is simple. If you’ve ever used an auction service like eBay, you’ll feel right at home. However, instead of bidding up, you bid downward on the interest rate.

The borrower has the first say in setting the interest rate.

You will be asked to provide the maximum rate you wish to pay on your loan during the loan request application process. Thus, while it is probable that lenders will bid your rate down, you should only use a maximum rate you would be willing to pay.

When the loan auction opens to the lenders, the maximum interest rate is displayed, anywhere from 6-30%. As a lender, you choose how much cash you want to bid (usually $50-100), plus the minimum interest rate that you will accept on the loan. Let’s say that you bid on a loan with a set maximum interest rate of 20%. If you place a bid at 16%, your listing will still show as 20% initially. If enough people bid to fund the loan completely, the downward bidding process begins. As more people bid, the rate will lower incrementally, spitting out lenders who bid the maximum amount first. When the auction ends, those still in the game “win” the right to fund the loan. Make sense?

Lender Fees

When you win a loan and the borrower begins the payback process, Loanio will collect a servicing fee of 1%.

Lenders are charged an annual servicing fee of 1%. The fee is accrued daily the same way in which the borrower interest is calculated.

Also note that if the borrower ever has to pay a late fee, that fee is broken up and distributed to the lenders. Loanio receives no cut of the late fees.

$25 Signup Bonus

Opening an account is easy. Just pick a user name, fill in the required information, and answer some general identity-verification questions. There is no “hard” credit inquiry unless you become a borrower and receive a loan.

As I mentioned earlier, the second step is to link your Loanio account to an existing checking account and verify the initial funding amount.

Loanio has a referral system, and new lenders using a referral link will receive $25.

Every time you refer a new borrower who gets a loan, you’ll earn $50.00 and for every new lender referred, you and the new lender will receive $25.00!

My referral link is right here. If you use it to open an account, we’ll both receive $25. Good karma all around. Please note that you must fund one loan ($50 minimum) in order to receive the bonus.

I think that peer lending has a lot of potential, and now may be an excellent time to get your feet wet. Honestly, I’m considering this fun money, and don’t dare invest more than a few hundred dollars for now, at least until I’m much more comfortable with it. I’ll stick to high-quality borrowers as well. I’m willing to forgo the temptation of 30% interest in favor of a more realistic rate and borrows who might actually complete payments on the loan!

My first impression of Loanio? Pretty good overall, though I think it will be better once they start picking up steam. Right now there are a lot of loans that only receive a bid or two and come nowhere near complete funding. I’d love to see some more action. I’d also love to see a reduction in how long it takes to verify your initial funding. Six days for me, wow.

Still, Loanio is the new kid in town right now. Their service has time and (room) for improvement.

Please pardon the gross analogy, but in all seriousness, the addition of anti-virus software to a Windows computer is simply a requirement. However, it does not have to be an expensive requirement. It hurts my soul to see people pay a yearly subscription to an anti-virus program (such as Symantec) without at least considering a free alternative. There are a number of free security programs available, and I submit to you that you can easily protect your computer using entirely free software. In fact, I’ve been doing just that for years, and here are some of the programs that I’ve tried.

1. Avast Antivirus Free Edition (Product link)

My current free anti-virus program of choice. I first replaced Norton with Avast back in 2002, and I haven’t returned to a paid program since. In a word, Avast rules. Over the years I’ve watch it mature from general “clunkiness” into a versatile and elegant program. Yes, the main interface is a bit unorthodox and… modern, but that’s easily changed with the number of interface skins that are available. It’s the features of the program that are more important. Speaking of which:

Features:

• Anti-Virus
• Anti-Spyware
• Anti-Rootkit
• Resident P2P, Instant Messaging, and Web shields
• POP3/SMTP E-mail scanning (plus a plug-in just for Outlook)
• Automatic updates

I’m pleased that the lastest version of Avast includes both Anti-Spyware and Anti-Rootkit protection. The addition of these features made me switch from my beloved AVG (see below). For a free program, it’s hard to beat Avast. It’s my favorite “install and forget” security program, and I have no problem recommending it.

2. AVG Antivirus Free (Product link)

Otherwise known (by me) as as “Old Faithful”, the free version of AVG has been around for ages. I’ve personally used it since 2003. No, AVG has not always had the world’s most beautiful interface (though recent versions have been better), and AVG’s virus detection rates have sometimes suffered. Despite these potential negatives, AVG has enjoyed a cult-like following by computer nerds the world over, and I have no problem recommending it for most people’s usage.

Features:

• Anti-Virus
• Anti-Spyware
• POP3/SMTP E-mail scanning
• Automatic updates
• Safe-search (shields against dangerous web search results)

AVG is one of the most frequently downloaded security programs for a good reason. It’s simple to install, easy to use, and won’t slow your computer to a crawl. Yes, there are probably more effective programs available, but AVG is a solid “install and forget” type of program. If it were not for the lack of a Rootkit scanner in the free version, I would likely still have it installed on my main desktop system. I don’t blame Grisoft for trying to provide incentive for paid upgrades – there are just too many other good programs that do provide Anti-Rootkit tools by default.

Still, AVG is a solid choice, and most users can get along just fine with it. I would much rather use it than pay for Norton Anti-Virus.

3. Blink Personal Edition (Product link)

Blink, by eEye Digital Security, is one of the newer free anti-virus programs that I’ve discovered. I wish I had discovered it sooner because it’s rapidly becoming one of my favorite free security programs. I’m not the only one who admires it – take a gander at eEye’s customer list. E-Trade, JPMorgan, Visa, and Harvard University can’t all be wrong, can they?

Features:

• Anti-Virus
• Anti-Spyware
• Personal Firewall included (nice!)
• Online identity protection (anti-phishing)
• POP3/SMTP E-mail scanning
• Automatic updates
• Vulnerability report

I found Blink to be a highly-competent program, but not for the faint of heart. Blink offers a ton of control and customization, and with great power comes responsibility. Savvy users will like Blink, but it is not an ideal “install and forget” type of program.

Definitely keep your eye on this one (pun intended).

4. McAfee VirusScan Plus – Special Edition from AOL (Product link)

Here’s an interesting option. McAfee came with the first computer I ever purchased (back in 2000), and it turned my computer into sludge. I couldn’t even drag the mouse across the screen smoothly with McAfee running. Oh, and AOL – the name alone sends shivers down my spine. Back in the early days of the Internet, long before the explosion of blogs and social networking (Dancing Baby, anyone?), AOL stalked the fledgling Internet tubes, ready to stage a hostile takeover of any computer in which it could sink its greedy tendrils. And now the name McAfee somehow combines with AOL? Shock and horror!

All drama aside, I understand that times change, so I gave it a shot. Guess what? I was pleasantly surprised. No, more than that – McAfee/AOL VirusScan Plus is still installed on one machine in my household.

Features:

• Anti-Virus
• Anti-Spyware, plus Rootkit detection
• Personal firewall included (nice!)
• POP3/SMTP E-mail scanning
• Automatic updates

Their web site states that they are making McAfee/AOL VirusScan Plus available for AOL members on the Basic Dial-Up plan, but don’t be fooled. All you need is an AOL screen name in order to download the software. If you have ever used the AOL instant messenger, then you already have a screen name. Just try it. I was able to download the software without any trouble.

It’s a solid offering, and I’m delighted that they include a personal firewall for free. People who are hesitant to use a free anti-virus program because of a lack of name recognition will love this McAfee/AOL offering. In short, I don’t know why anyone would pay money for McAfee anti-virus software when this program is available for free.

5. Avira AntiVir Personal Edition (Product link)

Last, but certainly not least, we have Avira. Though this little program is the lightest on features of the programs I mention here, its strength lies in its reputed detection rates. Time and time again, Avira has scored at or near the top on AV-Comparitives, an independent Anti-Virus software testing site, besting such names as Symantec, McAfee, and Sophos. If sheer detection rates alone give you comfort, Avira is the software for you.

Features:

• Anti-Virus
• Anti-Rootkit (plus phishing protection)
• Automatic updates

As you can see, the free edition of Avira has spartan features, but since it shares the same legendary detection engine as its big brothers, this is justified. In comparison to the other free offerings, Avira mainly lacks Anti-Spyware protection and POP3/SMTP E-mail protection. If you use web mail exclusively (Gmail, Yahoo, etc), you can easily live without the e-mail scanner. However, I suggest supplementing Avira with a spyware scanner, such as Ad-Aware or Spybot.

In my usage, the free version of Avira spawns a pop-up window after each update reminding you of their paid upgrades. It’s a small price to pay for such a worthy program, but a quick search reveals a way to disable the pop-up. Of course, the choice is up to you.

Summary

Naturally, there are other free anti-virus programs available, and you may find them worthwhile. I have used all these programs at one point or another, and feel comfortable recommending them over just about any for pay program.

I have only purchased one anti-virus program (back in 2001), and to be honest, I have no plans to ever do so again. My computers have led a malware-free existence since 2002, and I have saved hundreds of dollars by using free security software. You can, too.

At the least, if you currently pay a yearly subscription for an anti-virus program, I urge you to at least consider a free alternative. It ultimately boils down to your comfort level. If using a free anti-virus program causes you lose sleep at night over your computer’s security, by all means use a paid program. At least you considered an alternative.

For the rest of us, free programs like these work just fine. No matter which you choose, I wish you a malware-free existence!

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Part I – Indymac Bank CD Account Opening Review

Part II – Indymac CD Review – Addendum – PURE GARBAGE

Part III – Making Peace with Indymac Bank?

For over a month, all I’ve been trying to do is simply open a CD account online at Indymac. As you can see, I’ve faced serious obstacles every step of the way. Fortunately, my account is finally open! Indymac also re-imbursed my $30 stop payment fee as a credit to my account. However, there is one final problem.

One last slap in the face

When I logged into my CD account through their online banking service, imagine my complete and utter lack of surprise to see that they gave me the WRONG rate. After all of this time and hassle, after solving far too many problems that should not have happened in the first place… they gave me a LOWER rate than promised. Instead of the guaranteed 5.15% APY that they assured me I would still receive, they locked in my CD at 5.00%.

It’s one last slap in the face with a dead fish.

Furiously, I speed-dialed Indymac’s customer service number and barraged the poor outsourced CSR with a one-breath summary of the entire situation. After putting me on hold (of course), he came back and told me he would raise the rate to the promised 5.15% APY. “You’re darn right you will,” I replied, with a sigh of relief.

Today I logged into my account and noticed that the rate is now correct. All seems to be settled with my account, with the exception that I still have not received a signature guarantee form in the mail from them. Without it, I supposedly won’t be able to withdraw the money from my account. The last CSR promised to overnight the form to me, but I have yet to receive it.

Indymac’s company slogan is Raise your expectations. I propose a slight change – Raise your expectations… in vain!

How to frustrate a customer, Indymac style:

Step 1 – Make the initial ACH transfer fail.

Step 2 – Sign for an overnighted check from the customer, and then LOSE it.

Step 3 – Fail to mail a required signature guarantee. Oh, promise to send it twice.

Step 4 – Be sure to hire outsourced CSRs who barely read English.

Step 5 – When you finally decide to open the customer’s account, be sure to give a lower rate than promised. Maybe the customer won’t notice.

Step 6 – At no point should you contact the customer to provide information on any “problems.” What he doesn’t know won’t hurt him.

Step 7 – Profit?

Needless to say, I will never do business with Indymac again.

——-

Photo credit – unknown. Please contact me if you know the origin of that awesome photo.

Part I – Indymac Bank CD Account Opening Review

Part II – Indymac CD Review – Addendum – PURE GARBAGE

Since January 21, all I’ve been trying to do is open a 7-month CD with Indymac. When I last posted, I was in a state of limbo. An Indian CSR by the supposed name of “Alan” was supposed to call me back after he got ahold of his supervisor.

As I expected, he didn’t call me back. No surprise. I sent a mental mind missile in his direction.

The Final Call?

At this point, I’m ready to contact The Consumerist with my story. Before I do so, I decide to give them one last call.

Perhaps it’s the tone of my voice, but luckily, I get connected with a supervisor named Jill very quickly. Not only that, her accent is distinctly… well, American!

Jill reviews my account and tells me:

1. Indymac will refund my “stop payment” fee for the lost check.
2. The Indian CSR was supposed to tell me to initiate a refundable “stop payment.” Instead, he told me that I already HAD stopped the payment. Sheesh.
3. I need to mail a new check (regular mail). She gave me a different address (straight to her group). Indymac will then “back date” the deposit so that I will not lose any interest. Nice!

It’s truly a wonder what can happen when one connects with a competent person. Wait, let me revise that statement: It’s truly abysmal what does NOT happen correctly while slogging through the mire of incompetent people.

Hopefully, this impossibly frustrating process is over. For the time being, my horde of rabid, laser-wielding, ankle-biting gophers is at ease.

I hope my experience in opening a CD at Indymac is not typical. In the end, the only expenses I have incurred have been the mailing of the two checks. Provided that the situation truly IS resolved (nothing surprises me anymore), this will be my last post in this saga.

While my rage at Indymac has been placated for the moment, I still do not recommend them. I have no plans to ever open an account with them again, lest they invoke the wrath of my feral gopher army!

At the end of my review, I reported that Indymac was looking for my lost check. Once they found it, they were supposed to open my CD with the guaranteed rate of 5.15% APY. Here is a continuation of the timeline. Keep in mind that I began what should have been the simple process of opening an account on January 21.

February 11 (Day 22)

After noticing that the check STILL has not been withdrawn from my account, I call Indymac again. This time I spoke with Dwayne, and after giving him the USPS tracking number for the lost check (again), he put me on hold. While on hold, I passed the time by mulling in my mind why on earth I decided to open an account with these people in the first place.

Eventually, he returns, and he tells me that he walked a memo over to his manager, and that she will take care of the issue personally. Yeah right, Dwayne. While I’d like to believe you, past experiences leave me doubtful.

Anyway, he tells me to call back in a few days if the check has not been withdrawn.

February 15 (Day 26)

Of course, NOTHING has happened yet. The money is still sitting in my checking account. Of course, it’s time to give them yet another call. By now, I’m getting really good at navigating the Indymac automated phone system.

This time, a man with a thick Indian accent answers. He says his name is “Alan.” Yeah right.

Ok Alan, I give up. I have no idea what’s going on anymore. Here’s my account number. Enlighten me as to what’s happening with my account.

“Alan” puts me on hold for a while. While on hold, I pass the time mentally dropping virtual nuclear warheads on Indymac headquarters. When he returns, he tells me that he cannot find my check. No sh*t, Alan. He then tells me that I put a “stop payment” on the check. Huh? No I didn’t! Silence ensues. During the silence, I envision a plague of locusts descending on Indymac.

“Alan” then mutters that they have given up looking for the check, and that I should therefore put a “stop payment” on it. However, I can still lock in the original rate of 5.15% APY if I mail them ANOTHER check. When I ask him if there is a cutoff date for this next check, he says I would need to mail it so that it arrives in two business days.

Ok, wow. I’m speechless.

Let’s recap here: I’ve spent almost a MONTH trying to open a CD account at Indymac. First of all, my ACH transfer failed because Indymac refused to pull from FNBO Direct. Second of all, I had to overnight a check them ($16). Third, they lost the check, so I have to place a “stop payment” on it ($30 fee). Now, I’m supposed to mail another check so that it arrives in two business day ($5 minimum).

Meanwhile, the thousands of dollars that I want to deposit have been sitting in my checking account earning no interest for almost a month!

Pardon me for objecting Indymac (and “Alan”), but this is unjust! After summarizing the situation for “Alan”, I asked if there is anything Indymac can do to reimburse my expenses. After all, it is NOT my fault that they lost my check. Of course, he put me of hold for 20 minutes. I spent the time virtually pouring Mountain Dew on all of Indymac’s computers.

“Alan” eventually returned, but informed me that he could not get ahold of his supervisor. So, he claims, he will call me back in an hour or two. Yeah right.

And that, my friends, is where I currently stand. I’m sitting here waiting for “Alan” (or another Indian CSR of equal or lesser value) to call me back. My prediction is that no one will call, I will call them back (again), and that they will NOT offer any reimbursement for the fees I have to pay.

I also predict that I will end up telling Indymac to piss off, close my account, and that I’ll end up spending the evening envisioning a massive army of rabid, laser-wielding, ankle-biting gophers attacking Indymac’s citadel.

Stay tuned.

As I mentioned on January 22, I wanted to lock in a CD due to the emergency rate cut by the Fed. At the time, one of the best rates that I could find was a 7-month CD at 5.15% APY. So, I decided to lock that rate. Here is the timeframe of that process:

Jan. 21 (Day 1)

I completed the online application. To fund the account, one can choose between initiating an ACH transfer, sending in a check, or wiring in the money. I opted for an ACH transfer, funding the CD directly from my FNBO Direct savings account.

After I completed the application, I received an e-mail informing me that I would soon receive a Welcome Kit in the mail with a Signature Card to sign and return. Sounds good to me. So far, opening the CD has been a painless process.

Jan. 22 (Day 2)

I received an e-mail from a representative at Indymac, asking me to call them with regard to the status of my account. Curiously, I called them to see if there was a problem. After waiting on hold for about 30 minutes (ugh), I finally got a live person on the phone.

Here’s the scoop: they wanted to know the physical address of FNBO Direct (my funding source). Um, I explained that it is the online extension of a physical bank in Omaha, NE. The customer service representative had never heard of FNBO Direct. Apparently, the CSR is not a rate chaser.

Nevertheless, I found an address for FNBO Direct, gave it to the CSR, and was told that the account should be funded in 2-3 business days. This was a slight hurdle, but I am still pretty happy about the whole process.

The situation is about to get a lot worse….

Jan. 30 (Day 10)

Several days have passed, and I assume all is well with my new CD account at Indymac. Strangely enough, I remember that I was supposed to receive that Welcome Kit in the mail, but nothing has arrived. In fact, I have not received ANY notification from Indymac at all since I last spoke with them 8 days ago. Maybe I should check to see if there are any problems.

I start by logging into my FNBO Direct account. I see money that is not supposed to be there! There have been no withdrawals. Something is wrong.

I call Indymac again (and wait on hold again – ugh). Finally, I get a live person who informs me that they have NOT pulled the money from FNBO Direct. When I asked for a reason, this is what the CSR told me:

We need to know FNBO Direct’s physical address before we can initiate a transfer.

WHAT? Incredulously, I told her that I had already called and taken care of this problem EIGHT DAYS AGO! No effect. I might has well have been talking to a brick wall.

The stony CSR also told me that had until February 2nd to fund the account before my rate (5.15%) expired. Not wanting to bother with trying to get Indymac to actually create a working ACH transfer, I decided to fund the account by mail.

I immediately initiated a transfer from FNBO to my checking account. Next, I drove to the post office and paid to overnight a check to Indymac Bank. It cost me $16 to mail the check, so now I’m already eating into my first month’s interest on the CD. Ugh.

February 1 (Day 12)

Using the USPS tracking service, I verified that my check was signed for and delivered to Indymac, one full day before the cutoff date. Yay! Finally, perhaps this frustrating ordeal is coming to an end.

Wrong again.

February 6 (Day 17)

This morning I logged into my checking account and noticed that the check to Indymac has not yet been withdrawn. HUH?

Immediately, I called Indymac (again!) and spoke to an apologetic gentleman named Carlos, who informed me that they did NOT receive my check! This is getting really disgusting.

Recognizing the severity of the situation, he decided to connect me to a supervisor. To add insult to injury, the phone system mechanically informed me that no supervisor was available and HUNG UP ON ME! Aargh!

Furiously, I called Indymac again (ugh!). Once I connected to a CSR, I told him what had just happened, and he assured me he would try to handle everything without connecting me to a non-existent supervisor.

I briefed him on the entire situation, and he compiled a report for me. I even gave him the USPS tracking number for the check, and he verified that it was delivered. They just don’t know where it is. Um, this doesn’t exactly instill confidence in their bank.

To make a long story short, he informed me that they should honor the original rate once they figure out what happened to the check. He also told me that he would send another Welcome Kit in the mail.

Conclusions

I hope this ordeal is now over. Quite simply, everything that could possibly go wrong HAS gone wrong. What should have been a simple account opening procedure has turned into a drama of epic proportion.

Ok, maybe that’s a bit of an exaggeration, but this last statement is not:

I would rather face an army of ankle-biting gophers than open another CD with Indymac Bank!

One-word summary of the entire experience: Ugh!

Some main points from the book:

• Make saving automatic (pay yourself first)
• No budgets necessary
• Eliminate wasteful spending (Latte factor)
• Rich people buy houses – poor people rent

The Good

The basic premise of the book is sound: to build wealth, invest a certain percentage of your paycheck before it arrives in your bank account. By investing automatically, you eliminate the possibility (and temptation) of spending the money on other purposes.

To make saving “automatic”, he advocates designating at least 10% of your pre-tax income to a retirement account such as a 401(k) or 403(b). Most people tend to only take 4-6% automatically from their paychecks (if they do so at all!), so the idea is that you won’t miss the extra monthly contribution. Over time, the extra amount will compound into a significantly higher nest egg than you would have had before. As long as you are not a complete idiot with the remainder of your money, no budgeting is necessary.

Naturally, you can set other tasks on autopilot, such as automatic monthly transfers to an on-line savings account.

Another valid point Bach emphasizes is to curb wasteful daily spending – also known as the “Latte Factor.” The idea here is simple – keep track of your daily spending for several days in a row and ask yourself if the items you buy are truly necessary. Do you really need a muffin and soda at ten o’clock every morning? Maybe you can bring a snack from home instead. The money that you save can be invested instead and will compound over time.

Becoming aware of the “Latte Factor” is similar to an idea I heard concerning weight loss. If you want to lose weight, start by writing down everything that you eat in a typical day. The results may surprise (and shame!) you. Instead of cutting excess weight, the “Latte Factor” is about cutting excess spending.

The Bad

Some of his advice is repetitive, full of fluff, or just plain stupid. For instance, while I agree that having a mortgage can be a good investment, the recent catastrophic explosion of the housing bubble proves that real estate carries much more risk than Bach acknowledges (hey, it was written in 2003). As we are witnessing, the advice of mortgage = good, renting = bad does not necessarily hold water. I bought a home in early 2006 and am already worried about putting it on the market later this year.

Furthermore, while Bach rightfully advocates paying off a mortgage early, his main method of doing so is just silly. He is a big fan of automating bi-weekly mortgage payments with additional principle added to each payment. The problem here is that setting up such a process often costs somewhere between $300-600! To add insult to injury, many banks will allow you to split your monthly payment into two or more parts, but will only credit your account once a month! Who’s earning interest on that money in the meantime? Let me give you a hint: it’s not you.

A far simpler (and better!) way to pay off a mortgage faster is to make one payment a month, but contribute at least 1/12 extra cash as principle with each payment. By doing so, you will add at least one full extra mortgage payment per year, cutting years off the repayment schedule.

Final Thoughts

If you already have some financial chops, this book is a quick read. I have no formal education in finance beyond junior high economics class, yet I still polished this book off in roughly two hours. It reads more like one big blog entry (on a sixth-grade reading level) than a piece of sophisticated literature, which probably explains its “national bestseller” status. Original content is seriously lacking, and if you are an avid reader of personal finance websites and blogs, you can safely skip this book.

The Automatic Millionaire is not without merit, though. It would make an ideal gift for a young person just entering the workforce. If nothing else, it serves as a good reminder to re-assess one’s investment strategy and examine one’s daily spending. I’m just a poor grad student now, but when I start my first professional job later this year, I will start my pre-tax retirement allocation at 12% and (hopefully) try to work my way higher.

I have The Automatic Millionaire to thank for help with that decision.