As I mentioned yesterday, Washington Mutual has leapfrogged ahead, raising the interest rate offered on the bank’s online savings account to 3.75% APY. I’ve updated the list of highest online savings account interest rates to reflect the current rate leader.

Here is a summary of the highest interest rates on well-known banks currently offered, as of July 31, 2008.

Washington Mutual Online Savings Account
3.75% APY

The Washington Mutual Online Savings Account is only available online, not in WaMu bank branches. If you also sign up for a WaMu Free Checking Account, you will avoid a monthly service charge of $4.00. This fee can also be avoided by maintaining a balance of at least $300 each day of the monthly statement cycle.

There is some concern about the stability of Washington Mutual considering the company’s recent losses. In fact, the bank’s need to attract capital is probably a strong driver behind the bank’s decision to raise interest rates and attract more savings customers. I wouldn’t say your money’s at risk if deposited here; the FDIC has you covered if you stay within the limits.

Some of WaMu’s deposits are held at Washington Mutual Bank fsb (Utah) with a CAEL rating of 1 (best), while some deposits are held at Washington Mutual Bank (Nevada) with a CAEL rating of 5 (worst). This rating is used to determine a bank’s stability, but a rating of 5 doesn’t guarantee a collapse and a rating of 1 doesn’t guarantee against one.

If you are interested in Washington Mutual’s Online Savings Account, apply here.

HSBC Direct Online Savings Account
3.00% APY as of November 2008

HSBC Direct has a track record of offering very competitive rates. I have been adding more to my HSBC Direct account to take advantage of their habit of high interest rates.

Unlike Washington Mutual, HSBC Direct requires no minimum balance and has no recurring account fees.

If you are interested in HSBC Direct’s Online Savings Account, apply here.

FNBO Direct Online Savings Account
3.25% APY as of November 2008

FNBO Direct is a newcomer to the online banking arena having launched a little over a year ago, but the bank behind the online presence, First National Bank of Omaha, has been around since 1857 and currently has 38 branches in Nebraska, Iowa, and Texas. First National Bank of Omaha has a CAEL rating of 2 (1 is the highest rating, 5 is the lowest). This means that even though the online account is a new offering, the bank is in good shape and most likely won’t fail like others have recently.

If you’re interested in FNBO Direct’s Online Savings Account, apply here.

ShoreBank High-Yield Savings
3.50%

This account is a newcomer. ShoreBank requires no minimum balance and charges no account fees for this online account. An appealing feature is the bank’s attitude toward community development and the environment. Like most banks, ShoreBank turns a portion of deposits into loans. This bank focuses on “loans for projects that promote the efficient use of materials, resources, or alternative sources of energy, that promote the elimination of toxins, and that protect or revitalize land or water.”

If you’re interested in ShoreBank’s High-Yield Savings Account, apply here.

ING Direct Electric Orange Savings Account
3.0% APY

No list of the top online savings accounts is complete without ING Direct. They are no longer the interest rate leader, offering only 3.0% APY. In fact, it’s been some time since ING Direct has been at the top of any interest rate list, but there are several reasons to include them here. They were one of the first banks to popularize the idea of high-yield online-only savings accounts. ING Direct still maintains one of the strongest presences thanks to a vast customer base, good customer support, and a sensible and simple website.

Even though the advertised interest rate is lower than others, new customers can greatly increase their effective interest rate by grabbing a $25 bonus for opening an account. The bonus will work for anyone who opens the account with $250 and leaves at least $250 in the account for 30 days. If you deposit that initial $250 and nothing else for the year, the interest you earn, because the bonus is considered interest income, will amount to 13.3% APY. I can bet you that rate is unbeatable. Of course, that’s 13.3% on only $275. If your initial deposit is higher, or if you add money throughout the year, your effective interest rate will gradually decline back down towards 3.0%.

ING Direct has no minimum balances or account fees.

If you’re interested in ING Direct’s Electric Orange Savings Account, apply here. However, if you want to see if you qualify for a $25 account opening bonus, find out here.

I recently sold a number of possessions in my year-long quest to vanquish my credit card debt as quickly as possible. Before this, I had very limited experience using online selling tools, and generally thought of them all as a hassle, so I thought I would try more than one and see how they stacked up. Your experiences may differ, along with your selling requirements, but here’s what I found:

Craigslist

I’m fortunate enough to live in a city with a Craigslist presence (check to see if your hometown is on the list), and I had something that I really didn’t want to bother trying to ship: Guitar Hero III for the Nintento Wii. Craigslist, if you haven’t heard of it, is sort of like a city-wide distributed garage sale. You describe what you have using a free-form text entry field, pictures optional, prices optional, limited only by your imagination.

I said that I had Guitar Hero III for sale, found some Creative Commons photos on Flickr, asked for $50, and that was all there was to it. Within a couple of hours I had two offers. The first person haggled with me and asked if $40 would be okay. So I found a Starbucks that was easy for both of us to get to and met her that evening. If I’d waited a little longer, I could have gotten $50 for it from the second person. Lesson learned.

eBay

I had a number of DVD box sets of a favorite TV show that I wanted to unload (while keeping a soft copy of the better episodes on an external hard drive at home). It was easy enough to copy the details of each episode from a wiki to the “Sell item” page on eBay, and after a few repetitions I found it was even possible to find the vital stats with a database that eBay provided.

There are, not to put too fine a point on it, a lot of options for how to sell an item on eBay. I sort of wish there was an “eBay lite” option, or better wizard that stepped me through the process. Also, it tended to break when I used the Safari browser at home. I had to remember to use Firefox.

But my biggest problem with eBay was not really eBay’s fault: they wanted me to estimate shipping costs. The thing is, I don’t own a scale, and I can’t hold something in my hand and say, “yep, that’s about six pounds.”

In general, it seemed to me that eBay is geared toward professional sellers.

Amazon Seller Account

One-click patent silliness notwithstanding, I like Amazon because it is easy. Even without 1-Click, it’s easy. And that ease of use has expanded to their options for selling things online, in my case it was a used video camera.

All I did was find the right model camera by acting as if I was looking to buy one and click a button labeled “Sell yours here”. Specify the condition (new, used, etc.), add comments, pick a price and that’s about it. You get to benefit automatically from any pictures, customer reviews, or any other information that Amazon is already storing about that product.

Amazon also did a good job of estimating the shipping cost for me. The drawback I experienced using Amazon was that I had to wait. This will vary from product to product, of course.

Conclusion

With both Amazon and eBay, there’s something of a process to setting up an account and getting paid. Craiglist is a lot more free-form in that respect. If I was in a real rush, I’d probably use Craigslist again, but for the most part, I prefer Amazon’s way of selling things. I hardly had to lift a finger.

Starting tomorrow, Washington Mutual is increasing the interest rate offered on its online savings account to 3.75% APY. This jump will put this account on top among the best-known online savings accounts. This is a wide enough margin over ING Direct to convince me to open an account and give it a try even though I’m far from a “rate-chaser.”

I foresee more interest rate increases in the near future.

Many Consumerism Commentary readers don’t know this: I was a band geek. In high school, I played clarinet in wind ensemble and marching band. This continued into college, where I decided to major in music education. In college, I performed in a variety of ensembles on a variety of instruments ranging from trumpet to percussion and from crumhorn to gamelan.

Despite the wide range of possibility, I stuck with clarinet for my four fall seasons marching with our highly successful college marching band. Regardless, the professor and director of the marching band spoke to us once about careers and life choices. She considers herself extremely lucky. She has a career (as a professor of music education, professor of music performance, and director of the marching band and one of several symphonic bands) doing what she loves doing. Not many people would be lucky enough to be able to be paid for spending their days with the activity about which they are passionate.

So when I read this advice from Dean Kamen, inventor of the Segway, the words sounded familiar.

My father was an artist who loved what he did. He’d sit at his board 12 hours a day. I once said to him, “Gee, Dad, all the other fathers have time after they come home to play ball or sit around. At the end of the day, you’re working.”

He put his brush down and said, “Those fathers are doctors, lawyers and bankers. When they come home, all they want to do is their hobby. My work and my hobby are the same. Find work in something you love and it won’t feel like work.” I listened to him. And I have been fortunate enough to work at something that I love.

To find what you love doing, you have to have an opportunity to discover your talents. I was given the opportunity at an early age to have exposure to music, for example. I also had access to personal computers and the internet as I was growing up in the 1980s, unlike many other children my age. I participated in more activities, like little league baseball and karate, and this variety helped me to figure out what I could be passionate about.

I’ve changed a bit since college. Music and arts education is still very important to me, but I’ve moved away from that as my vocation. I certainly do not love my day job now. I do my best, or close to it, and I am interested in furthering my career, but I am more interested in working with the internet at this point in my life. I’m not sure that I love the internet, to use Kamen’s terminology. When I’m writing, it doesn’t feel like I’m working, but I wouldn’t say that this is my talent or passion. It does feel like work, however, when I am not feeling inspired and cannot come up with ideas.

I have so many interests that it’s difficult for me to hone in on just one that can define my vocation in such a way that it will be everything for me.

If you have some idea of an activity that you absolutely love, something for which you have a talent, and nothing else you could see yourself doing, and if you can find a way to make a living doing this activity, then you have an opportunity to be one of the lucky few. I think this may not be possible for many people. Either they haven’t had the opportunities to discover their passion and talent or, like me, they could see many different paths.

Do you have a passion? Does it coincide with your job? Could you make a living with your passion?

The smartest advice I ever got, CNN Money

Here are the most popular articles on Consumerism Commentary during the month of July 2008.

1. The Correct Way to Pay Off Personal Debt: The Debt Avalanche
2. 2007 New Jersey Homestead Rebate: Receive Up to $2,000
3. Just Like Apple’s MobileMe, But Free (by Smithee)
4. Net Worth Competition: Don’t Compare Yourself With Others
5. Four Day Work Week: Is it a Good Idea?
6. Your Opinion: Do Women Find Wealthy Men Attractive?
7. Personal Income Statement, June 2008 (Net Income: $4,364)
8. Personal Balance Sheet, June 2008 ($155,596, -1.5%)
9. Heads Up: E*TRADE Bank Increasing Savings Account Interest Rate Tomorrow
10. More ING Direct Referral Links Needed: Join the Waiting List

Thanks to the following websites that sent the most traffic to Consumerism Commentary during July 2008. RSS readers and search engines are not included in this list.

1. Get Rich Slowly 0
2. The Simple Dollar +5
3. Money Saving Mom new
4. MSN Smart Spending new
5. MoneyBlogNetwork -2
6. AllFinancialMatters -2
7. Five Cent Nickel +1
8. Free Money Finance -2
9. pfblogs.org new
10. Milion Dollar Journey new
11. MyMoneyBlog new
12. No Credit Needed -7

I really enjoy good “data visualization”, which is a fancy, but more succinct way of saying “a way to look at information as more than just numbers.”

Last year, before most of us were aware of the “mortgage crisis,” some enterprising individual took a list of average housing prices in the United States since 1890, adjusted them for inflation, and then plotted them as if they were altitudes on a roller coaster ride. Watch the video, and you won’t be so surprised why the housing market took a downturn:

If anyone should be giving advice about how to become a successful entrepreneur, it would probably not be me. While I am earning money on my own outside of my day job, it’s not consistent or reliable. Part of the reason for this is that I never intended on becoming a business owner of this form. I’ve had a strong interest in computers since I was young and in web design and programming since 1994. While I decided I could see myself designing websites on the side, I never thought that writing would be the driver for the online business. Even when starting Consumerism Commentary five years ago, I didn’t start it with the intent of earning money.

I wouldn’t call my approach a “mistake” for me, but this approach is not the best for creating a successful business from scratch. Some of the best advice would be the opposite of my original thought process. Have clear goals, solicit social and financial support, be an expert in your field, research the market for your service or product, seek advice or mentoring from other similar, successful entrepreneurs, and don’t quit your day job.

The last piece of advice has been one that I have followed. At the end of last year, I decided that I would determine by the end of June 2008 whether I would be in a strong enough position to quit my moderately-supportive day job at a financial services company and give working for myself a try full-time. I decided not to quit.

There are strong arguments for maintaining a relatively secure job while laying the groundwork for your own business. With a stable income, you can fund your endeavors. With benefits from your day job, you don’t have to worry about making enough money from your side work to support you if you encounter medical emergencies.

On the other hand, there are some reasons why you can’t be a successful entrepreneur if all you can devote to the business is your spare time. The more aggressive your goals, the more risk you must be willing to take.

Abandon your day job. If “wild success” is an integral part of your goals, keeping a day job is a distraction. Yes, this means giving up your income. For driven individuals, this is strong motivation to develop the business to a point where it can support you as quickly as possible or to aggressively seek financial backing.

If I were to quit my day job, where I earn less in terms of gross pay than I earn from side projects in total, I would be able to focus on building my business with all of my effort rather than my “spare” effort at night and on weekends. Perhaps I’m not a risk taker, but I’m going to need a stronger sign of viability than what I’ve experienced so far. This is a risk a budding entrepreneur must take.

Don’t expect to have more time with your family. One of the main reasons people say they would like to become an “entrepreneur” is that it would allow them to spend more time with family. That may be fine if your intent is to sell products made by someone else on eBay but if you are trying to build a unique business that provides an original product or service or if you are trying to be the best at what you do, you will have less time for friends and family than you had when all you had to worry about was your day job.

All the other typical entrepreneurial advice still applies. It’ll take dedication and a detailed plan for a would-be entrepreneur to become successful. But that success requires sacrifices and risks. It’s easy to sell the idea that you can become rich “in your spare time” or in the “comfort of your own home” like the infomercials promise. A real entrepreneur, someone at the top of their niche, has no “spare time” and very little “comfort,” particularly when they are still building their business.

This article is part of the July MoneyBlogNetwork writing project. Here are more articles from around the web about entrepreneurship.

• 5 Tips for Starting a Small Business (Get Rich Slowly)
• Are You Thinking of Quitting the Nine to Five? (Mighty Bargain Hunter)
• My Best Advice for New Entrepreneurs (Free Money Finance)
• Advice for Entrepreneurs (Five Cent Nickel)
• My Best Thoughts for the New Entrepreneur (No Credit Needed)
• How to Encourage Your Budding Entrepreneur (All Financial Matters)
• Create a Business Plan by Answering 4 Simple Questions (Wise Bread)
• Basic Business Advice From an Accidental Entrepreneur (The Digerati Life)
• Of Exit Strategies and Small Businesses (Blunt Money)
• My Advice for New Entrepreneurs (No Debt Plan)
• So You Think You Can Sell Banana Peelers? (Personal Finance Analyst)
• 6 Key Tips for Starting a Part-Time Business (Think Your Way to Wealth)

The FDIC has announced that two more banks failed yesterday, bringing the total this year to seven. 1st National Bank of Nevada and First Heritage Bank operate a total of 28 branches in Nevada, Arizona, and California. Neither of these banks was included in the list of the top ten banks likely to fail.

Account holders in these two banks will be able to access their money through check writing and ATM withdrawals throughout the weekend, even beyond the FDIC limits.

On Monday, the two banks will be known as “Mutual of Omaha Bank” and customers will have access to their full balances. The ease of the takeover operation brings to mind the idea that “money” is often nothing more than data bits. A computer at a bank where I hold an account keeps a database record with my balance, and that database record can be moved from one place to another. “Money” as we know it isn’t involved in the slightest.

FDIC shutters two more regional banks, CNN Money, July 26, 2008