You are viewing an archive of articles by Luke Landes. Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter.
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The best high-yield online savings accounts offer strong interest rates and great customer service, making them a popular option for savers. Studies also show online savings accounts often come with lower fees.
“High-yield” is unfortunately a bit of a misnomer these days; a decade ago, interest rates were 4% and 5% among select savings accounts and money market accounts. Today, the best rates are all below 2% while a fair amount are still hovering around 1%, many rates are now dipping below the 1% mark. This trend will continue until banks and credit unions need more cash from depositors.
Interest rates. Interest rates are important because money shouldn’t lose too much purchasing power. In a perfect world, interest rates offered by banks should beat inflation while preserving the balance without risk. I am not aware of any bank offering a savings option with ongoing interest rates high enough to beat inflation, whether measured by the government-reported CPI-U or by any other meaningful measure of consumer prices. Nevertheless, if your savings is at a brick and mortar bank earning below 0.25% APY, choose one of the better options below.
Customer service. When evaluating customer service, there are two important factors to consider. The best banks offer all account maintenance and transfers through a professional, reliable, and easy-to-navigate website. Secondly, live customer service representatives should be knowledgeable, helpful, and available, although customers should have to deal with a representative infrequently if at all.
Based on my own experiences and reviews from other Consumerism Commentary readers, here are the most-recommended accounts for short-term savings. All of the listed interest rates directly below from our partners and in the table that follows are current but they are subject to change by the banks. Although I have nine accounts listed below the table of rates, you don’t need to have accounts with that many different banks. Choose one that fits you the best.
First, here is a list of the latest interest rates. Following this table, I offer a few of my own observations and opinions about savings accounts from nine popular online banks. Read the full article →
Twelve years ago today I started a blog called Consumerism Commentary. On that date, I was about one year into my journey of improving my finances. I had the bright and forward-thinking idea to track my progress — both in my bank accounts and in my skills of money management — publicly but anonymously, and by the end of the day I had a new website up and running. You can see what it looked like in 2003, in the graphic below, thanks to the Internet Archive’s Wayback Machine.
I’ve told the story a few times before. Here’s my most recent and succinct retelling of how I found myself in grave financial circumstances and, through the help of blogging and later the business that grew from it, improved my financial situation and my life substantially, from a negative net worth a few months before I started writing to a seven-figure net worth today. It’s not just about the money, though. I’ve met lovely people including and especially my girlfriend thanks to this website and the community, and I seem to have grown into a fully-formed adult (after starting the website as a late-model adolescent of 27 years).
I sold this website to a lead generation company called QuinStreet three and a half years ago. It was a good acquisition for the company, as they really wanted to ensure their own advertising was being served to the high-quality search engine traffic from which this website was benefiting. It was a good sale for me, because I saw revenue from search engine traffic as highly volatile and unpredictable, and I was happy to offload that risk for a good price.
After the sale, I became an employee, continuing to write for Consumerism Commentary, manage the blog, and offer consulting on blogging and community building as the company was interested. I negotiated a healthy salary — but six months after the sale, the company determined I was too expensive and laid me off. For some reason that baffles many (sometimes including myself), I offered to continue as a contractor, reducing my consulting role but continuing to manage this website and write occasionally.
The frequency of my writing has dropped off significantly since then, especially in the past couple of months. My “freedom” date was approaching. I had many years to prepare to move on, and I had a plan to do so. As luck would have it, after another reorganization at QuinStreet, I got a call the other day from the new supervisor of QuinStreet’s blogs asking me to reduce my role even further. I declined, choosing instead to move on. I imagine I’ll always be welcome to contribute an article for time to time at QuinStreet’s freelancing rates, but I expect I won’t have much to write here that couldn’t be published elsewhere.
I plan on launching a new financial website soon, and in the mean time, working on The Plutus Awards, the Plutus Foundation, a drum and bugle corps I work with as a volunteer, my photography, and other projects will keep me more than busy. Please follow me on Twitter, Facebook, and my LukeLandes.com website to stay on top of my current projects — and consider reading or joining my new financial website once it is launched.
There was no financial blogging community in 2003 when I started Consumerism Commentary. Today, thousands of blogs cover financial topics from thousands of angles. The community today is one of the most supportive groups I’ve had the pleasure to be a part of. I’m not leaving the community; in fact, I’ll be more involved than ever as I work hard to make The Plutus Awards the premiere event for the community and turn the Foundation into the most important charitable effort for the independent financial media.
The days of an independent financial blogger earning seven figures from advertising are probably over, at least not without an expensive team of professionals helping behind the scenes. I don’t expect any project I work on to be as lucrative as Consumerism Commentary was, but as long as I continue to have passion for financial education, I’ll find a way to express myself and gain something of an audience. I’m not retiring. This isn’t the early retirement everyone promises. I still have much more to do.
From the readers’ perspective, I expect the future of Consumerism Commentary to feature several articles a month from a freelance financial writer.
There was a point earlier at which, had I left Consumerism Commentary, I would have felt bittersweet about the departure. This was my baby; I put my heart and soul and countless hours into writing and working behind the scenes. When I had a day job, I’d come home, eat dinner, and work another eight hours writing for Consumerism Commentary, emailing readers, bloggers, and the “mainstream” media. I put many unpaid hours into building other affiliated sites and projects like the Carnival of Personal Finance, pfblogs.org (the ad-free personal financial blog aggregator), and free hosting for other financial bloggers. This was my life. There are some readers who have been with me since the very beginning. I appreciate that more than anything else. Thank you.
But today, moving on feels like nothing other than the natural course of action.
I wish QuinStreet the best continued success with the website. Thanks for reading.
There’s a good reason I can’t get into extreme savings for retirement. When desperate financial times call for desperate financial measures, there is a good incentive to cut all unnecessary spending and eliminate bad debt. Many people even wait until they hit rock bottom before reforming their approach to their finances, because the effects of bad money management aren’t always clear until they’re completely unavoidable.
After one extreme — complete lack of reasoning and complete lack of understanding consequences — there is a tendency to hit the other extreme. An obsessive spender is just as likely to become an obsessive saver. A little obsession might be good. When I realized I wasn’t saving for my future, I began tracking every cent of income and expense, and it helped me learn where I could cut back my spending and improve my income. It’s an important part of moving your life in the right direction, and I still recommend this to anyone who hasn’t seriously considered their money management skills, particularly those who aren’t left with much net income at the end of the month, if any.
There’s a danger in taking saving too far. Money is more than a number, and you are more than just your net worth. The only point in growing your bank account balances is to use that money for something at some point. Money has no intrinsic meaning; its purpose is only what you can do with it. Although it’s a problem not many will face, it is possible to save too much money.
The government encourage saving decades in advance for retirement by providing tax incentives. It’s a good way to decrease the burden on employers, who at one time offered pensions to assist their employees when they could no longer work. Pensions have all but disappeared in the private sector, replaced by 401(k) plans and IRAs. Preparing for retirement in advance is healthy financial planning, but you still have to consider there is a chance, though remote, that you won’t survive until the end of the saving-for-retirement phase of your life.
It’s a morbid thought, of course, and I wish all Consumerism Commentary readers a long, healthy life. An insurance company may use actuarial tables to determine the chances of any individual living a certain number of additional years, but it’s just an estimation. When we plan for the future we have to assume that the money we invest or save while looking at a time horizon decades in the future will be there when we need it, but we also have to assume that we’ll be there to use it. That’s a lot of assumptions, and putting money away that could be used today is a certain type of risk.
Having a will helps a saver feel comfortable with the fact that if his money outlives him, it will at least see a chance to be used, either by relatives who might save it or by a non-profit organization who can use the funds to move its mission forward. For those who have the means, however, having not completed everything on a “bucket list” could be a regret. Life is almost always shorter than we want it to be, and with many fulfilling activities, many of which require money, it doesn’t make a lot of sense to wait until retirement to do everything.
It’s not a good idea, though, to take this “life is short” mantra and use it as an excuse to spend money with wanton abandon. This is a toxic financial attitude, even though it could be considered the opposite of putting your financial concerns off until the future, another toxic attitude.
While I fully agree that everyone should seize the day in as many opportunities as possible, this approach should be balanced with enough consideration for the future. I don’t think that balance can ever be perfect, though. All anyone can do is make an educated guess, and aim for an approach to finances with which one is comfortable. One that provides a chance for thriving when income from work is no longer a factor while taking advantage of opportunities today for enjoying life.
The good news is that we can enjoy life today while saving for the future. It doesn’t have to be one or the other, although when you’re living paycheck to paycheck or worse, the smart decision is to focus on getting out of that situation and beginning to build wealth as the primary and only priority. Once you are building wealth, you are in a better position to have that flexibility. The frugal approach to life assists with this goal. You can find ways to enjoy life on a budget while keeping the automatic investing plan in full force.
Although I save for retirement to cover myself in the likely event I’ll eventually want to stop working in exchange for money — likely well before I reach the government-suggested age of retirement — I want to make the most of my time today. That doesn’t always require money, but sometimes it does.
I see people putting up with terrible bosses and jobs they don’t like. Life is too short to waste your time in situations that aren’t ideal, or at least moving in that direction. It’s a myth that we need to just accept what we have and be happy when we’re treated poorly at work. When the economy is bad, people are brainwashed into thinking they should be lucky to have any job. Get out and find something better.
Unhappy marriages and personal relationships are similar to bad working situations. Life is too short to spend your life with someone who doesn’t make you happy or to force yourself to spend time with people who don’t share your values. There are seven billion people in the world.
Why waste your time watching television when life is so short? Well, while reading a novel might better flex your neurons, seeking entertainment is a part of enjoying life today, so don’t be too quickly to accept the productivity refrain that mindless entertainment is a waste of time. There may be better ways to be entertained, but life is not worth living if you have to be productive every waking minute of every day — especially if that “productivity” is for the benefit of someone else.
Recognize that life is short and that we might lose our chance to enjoy life if we wait around for retirement or financial independence to start living. We can’t use the fact that life is short as an excuse that prevents good decision-making, which takes the idea to the extreme to the detriment of important goals like saving for the future.
How do you balance the need to plan for your financial future and to achieve financial independence with the need to make use of what you have and enjoy life today? How do you make the most of what is a relatively short life without sacrificing your future? How do you prevent “life is short” from becoming a toxic financial attitude that takes away your ability to save?
In today’s podcast, Carl and I discuss why reducing a complex financial plan to one page can be key for living the fulfilled life you envision and how certain emotions can stand in the way. We talk about avoiding financial mistakes, and what a financial adviser’s (or a friend’s) role might be.
Because Carl is “The Sketch Guy” for The New York Times, we talk about the origins of Carl’s sketches, and how these sketches and Carl’s other art have been received in the art scene.
Finally, Carl and I discuss the process of publishing, and listeners will get an early listen to what might be the focus of his FinCon keynote address.
Consumerism Commentary is offering five free copies of The One-Page Financial Plan to five Consumerism Commentary readers. To be considered for receiving one copy of the book, which is also available at retailers, leave a comment below the transcript.
When your life is out of control, nothing seems to go right. You have the worst luck, and you can’t seem to get ahead with anything, whether a project, a goal, or even simple things like taking care of daily tasks. Regaining control of your life is imperative. For your finances, you can do that ... Continue reading this article…
After the stock market closed on Friday, my portfolio was at an all-time high. That was likely also the case for a lot of investors living in the United States who are similar to me: earning income, investing in the stock market with a buy-and-hold strategy for the future, and leaving money invested during the ... Continue reading this article…
Banks in the United States are undergoing a major transformation in credit card technology, a process similar to the one Europe successfully completed several years ago. Despite the technological advances in mobile payment that have already rendered plastic cards obsolete, the financial industry wants to replace every magnetic stripe credit card in every wallet. When ... Continue reading this article…
Congratulations to the owners of LearnVest, a financial planning start-up that is in the process of finalizing a deal with Northwestern Mutual wherein the latter will be acquiring the assets and business of the former. In a deal of more than $250 million in cash, a company that provided early funding for the start-up will ... Continue reading this article…
Accumulating money is not a real goal for anyone’s life. Growing wealth is not the point. People don’t work hard because they want to see their bank balance grow; those of us who track our finances and chart our net worth over time aren’t trying to compete in some financial competition. I imagine there are ... Continue reading this article…
For a few years, a ring of criminals believed by the U.S. government to be based in India have been involved in a pervasive tax scam. Callers impersonate IRS officials, connect with American taxpayers, and convince many that they have an outstanding bill for tax payments. The scam has been so pervasive that it has ... Continue reading this article…
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