As featured in The Wall Street Journal, Money Magazine, and more!

September 2007

If you’re a new reader to Consumerism Commentary, you may have missed some articles from September in prior years. Here are a few from the past. From the second half of September 2006:

* FranklinCovey’s 7 Habits of Highly Effective People
* 36% Say They Use a Financial Advisor
* My MBA at the University of Phoenix, Part 1: The Decision
* The 400 Richest Americans
* My MBA at the University of Phoenix, Part 2: Admissions
* Me Ex Paid for a Semester in College By Doing This…
* Review: The Money Coach’s Guide to Your First Million by Lynette Khalfani
* My MBA at the University of Phoenix Online, Part 3: Course Logistics
* What Should I Do With My Side Business Income?
* Do Not Upgrade to Quicken 2007, It’s Horrible!

Here are some from the second half of September 2005:

* Don’t Donate to Katrina Victims
* Consensus View is Better Than Experts?
* New York City Salaries
* CitiBank Strikes Again
* Raise Your FICO Credit Score
* It’s Not What You Make, It’s What You Spend. Whaa?

The second half of September 2004 produced several articles, including:

* Looking Forward to Raises
* Allow Me to Grow Personally and Professionally
* Annual Fee?!

Here are a few more retro articles, from the second half of September 2003:

* The Average Family
* How to Feel a Little Richer
* Which Degrees are Worth It
* Are You On Track?
* Six Tips for Investing Beginners

Don’t be left in the dark. Subscribe the Consumerism Commentary RSS feed and never miss another article.


I mentioned yesterday that NetBank melted down and was taken over by ING Direct. Most customers will have a seamless transition, but not everyone.

Applied Cognetics, a small business, held about $1 million in deposits at NetBank. They won’t be able to access that money for quite some time — if they ever get paid back. Why in the world would anyone keep more than $100,000 in a bank account? The FDIC insures only up to $100,000 per customer (plus another $100,000 if they hold a joint account). That means that if the bank dissolves, customers will still be able to get to their money.

NetBank will owe this money to Applied Cognetics, and any depositor whose accounts were valued higher than $100,000. According to the FDIC press release, customers who have deposited more than the insured amount will receive an immediate payment of half of the uninsured balance. Applied Cognetics might receive the rest of the money eventually, but chances are they won’t be able to access it when they need it.

These are the chances you play with when you deposit more than $100,000 into a bank account. Knowing this, why did Appied Cognetics make this decision?

When Colthrust [president of Applied Cognetics] had approached traditional brick-and-mortar banks to open a commercial account, he found them unhelpful and the paperwork daunting. He never imagined losing access to his money.

Paperwork is a hassle, sure. The chances of a bank declaring bankruptcy are usually low. However, Applied Cognetics could have made better decisions about their money management. If you have lots of cash lying around, diversify across banks so you don’t exceed FDIC limits.

Could They Lose $900k? [Fortune Small Business Magazine]

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Yesterday, a bill that was signed into law will help emerging students pay for the cost of their education. There are several facets to the new law, so here’s a summary of the major talking points.

The maximum Pell Grant, which is awarded to students based on financial need, will increase from $4,310 to $5,400 per year over the next five years, starting with $4,800 next year.

20 years ago, a Pell Grant would cover 60% of the average public university tuition cost.

The interest rate for subsidized Stafford loans is dropping to 3.4% over the next four years. If you qualify for a subsidized Stafford loan, the government pays the loan’s interest for you while you are in school. The new law has no effect on unsubsidized Stafford loans.

Struggling graduates can benefit from a new formula to determine their repayment schedule. If you qualify, your lower payments will be based on 15% of your annual discretionary income. This applies to private loans as well, not just government loans.

If you plan on teaching and commit to the profession for at least four years, you can qualify for an additional $4,000 a year in grant money. These grants will revert to loans for anyone who gives up on the education industry.

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As you may have noticed, we’ve been undertaking a redesign at Consumerism Commentary, with the intent of reducing clutter. Feel free to leave any comments, particularly if there is any features that no longer work for you. Here are a few articles I’ve read from the MoneyBlogNetwork and beyond this past week:

Index Funds Plus a few Stocks Works for Me. FMF keeps it simple with his investing strategy. This is similar to mine, as well, but my stocks are not performing as nice as I’d like.

Thoughts on Maxed Out. Mighty Bargain Hunter shares his thoughts on the documentary. It’s easy to get into debt problems, but difficult to get out. MBH says the key is preparation.

Words of Wisdom From Alan Greenspan. Five Cent Nickel took notes during the former Fed chief’s appearance on The Today Show. In short, he’s worried about the credit crunch, but he doesn’t believe we’re heading to a recession.

8 Personal Finance Lessons I Learned From Monopoly. Jim from Blueprint for Financial Prosperity has some ideas about how the old game can be linked to personal finance.

Illustrated Debt Snowball. No Credit Needed includes some charts that help visualize how the debt snowball technique worse. The traditional debt snowball (highest balances first) is not the most efficient way of getting out of debt. See 6 Steps to Building a Better Snowball.

Using Quicken to Analyze and Correct Bad Spending Habits. Get Rich Slowly used his software to motivate him to spend less on comics.

A Preview of the 2008 Federal Income Tax Brackets. AllFinancialMatters is way ahead of the game. I haven’t started by 2007 taxes yet.

Using Music to Teach About Money. Alpha Consumer interviews Benjamin Chavis, president of Hip-Hop Summit Action Network, about their program to inspire healthy money management skills in today’s youth.

Have a great weekend!


Account Watchers and Account Ignorers Anonymous, Meet Mint

by Sasha

A review of Mint.com follows. Seven years ago, you would have found me blissfully unaware of my spending practices and their impact, flourishing my credit card without a second thought as I ran up my tab at restaurants and shops. I defined living life fully as having the things and experiences I desired, and I ... Continue reading this article…

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More $4 Generic Drugs at Wal-Mart

by Luke Landes

About a year ago, Wal-Mart announced the store would be offering generic prescription drugs at prices a fraction of what you can get in other pharmacies, and that caught my attention.

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10 Tips for Buying a Residential Rental Property, Part 10: Utilities Can Use You Up

by Sasha

This is the last tip in a 10-part series on purchasing residential rental properties based on my experience. 10. Utilities can use you up, so be careful. Utilities can be a major issue for landlords if not set up properly. If you supply utilities to your tenants, you are generally not permitted to terminate these ... Continue reading this article…

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An Education in High Definition for the Novice

by Luke Landes

Best Buy is campaigning for better consumer education in High Definition to prevent store returns. Customers apparently purchase flat screen televisions and expect the complete high definition experience immediately upon hooking up their system with the same old equipment and cables. Despite the lack of knowledge, I don’t think an entire “education program” is necessary. ... Continue reading this article…

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Guide to CitiBank Credit Cards

by Luke Landes

Every so often, I’ve been going through some of the more popular credit card issuers and presenting a list of their credit cards, highlighting some of the better programs for rewards. So far, I’ve looked at the best credit cards from American Express and Capital One. Credit cards can be dangerous tools in the wrong ... Continue reading this article…

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10 Tips for Buying a Residential Rental Property, Part 9: Bigger Is Not Always Better

by Sasha

This is the ninth tip in a 10-part series on purchasing residential rental properties based on my experience. 9. Bigger is not always better. As your property size and square footage help to determine your tax rate, an acre or more of land really isn’t necessary. You’ll mow it (or pay to mow it) and ... Continue reading this article…

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Weekly Roundup, Jogging Edition

by Luke Landes

The first spin-off from my original personal blog was a blog in which my roommate and I chronicled our adventures in physical exercise through jogging, about 7 years ago. I’ve finally gotten up off my butt again. Each day this week, I’ve been taking laps around my apartment complex after work. Actually, I missed Wednesday ... Continue reading this article…

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Financial Advisers and Stock Brokers: What’s the Difference?

by Luke Landes

You would think that the roles and responsibilities would be clear and there would be a strong line between individuals who call themselves financial advisers and those who call themselves stock brokers. The obvious answer is that advisers give impartial advice based on the best interest of the client and brokers sell products as a ... Continue reading this article…

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Financial Curriculum: Classes About Money Management

by Luke Landes

Earlier this year, I shared my opinion that personal finance classes should not be required in high school thanks to an overloaded general curriculum and dubious results. My opinion is that basic money management is better taught — if in school at all — in the earlier years. The Citi Foundation sponsors a financial education ... Continue reading this article…

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ING Direct Drops Interest Rate From 4.5% to 4.3% APY

by Luke Landes

ING Direct hasn’t been the interest rate leader in years. In a world where some banks are offering yields above 5 percent on money market or savings accounts, ING Direct sat squarely at 4.5 percent. Nevertheless, I still have the bulk of my savings there. I am too lazy to chase around for the highest rates every ... Continue reading this article…

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Shared Money: Combining Finances With Your Partner

by Luke Landes

Yesterday, I received a question from a reader, Lindsey. I’m not much of a fan of giving advice; there are professionals out there whose job is to provide sound financial advice. All I can offer is my opinion. Here is Lindsey’s question. What should you do if you and your partner decide to combine finances ... Continue reading this article…

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The Declining Value of the MBA

by Luke Landes

Among the high-powered analysts and hedge-fund superstars, obtaining an MBA is losing its attraction. Even degrees from the most prestigious schools like Harvard and Wharton are viewed as a waste of time and money if the student could be earning hundreds of thousands of dollars a year as a stock analyst or millions as a ... Continue reading this article…

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Database Breach at TD Ameritrade

by Luke Landes

About a year ago, TD Ameritrade customers began receiving spam sent to email addresses used only with that company. TD Ameritrade admitted customers’ contact information had been compromised. Reading in between the lines, the recent announcement of a database breach at Ameritrade seems to be the same event. From what I can tell from Ameritrade’s ... Continue reading this article…

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10 Tips for Buying a Residential Rental Property, Part 8: Stay Close to Home

by Sasha

This is the eighth tip in a 10-part series on purchasing residential rental properties based on my experience. 8. Stay close to home. In my experience, absentee landlords tend to find out about and resolve problems less quickly, which in turn can make them bigger, more expensive problems. For this and other reasons, municipalities are ... Continue reading this article…

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Weekly Blog Roundup, Fall Season Edition

by Luke Landes

I am not a television junkie, but I appreciate good entertainment. Hence, I’m looking forward to the upcoming series of Heroes, House, and The Office. While I’m preparing by setting my digital video recorder to record all the new shows in glorious high definition, I’ll be reviewing some of the recent articles from the MoneyBlogNetwork. ... Continue reading this article…

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Responses to Your Thoughts and Questions About Quicken

by Luke Landes

On Wednesday, I announced the release of Quicken 2008 by hosting a giveaway. As of yesterday evening, more than 60 people have entered the “contest” for a chance to win one of five downloadable copies of Quicken Premier 2008. Some wrote in with interesting comments, so I’d like to address a few. Rue asked, “The ... Continue reading this article…

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