What is a Certificate of Deposit?

More commonly known as a C.D., a Certificate of Deposit is a non-accessible account that you can open with a bank. The depositor purchases a “CD” for a predetermined amount of money (often in hundred or thousand dollar increments). The bank then has the right to loan out the depositors money without fear of depositor withdrawal, and in exchange, the bank pays a higher interest rate.

Larger principal (amount) CD’s will yield higher interest rates. Longer term before repayment will yield higher interest rates. Penalties will be incurred if the depositor decides to cash in their C.D. before term completion.

The C.D. is also insured by the FDIC (What is the FDIC?) which makes it virtually risk free. These are great tools for investors who want more interest that would be yielded from a Savings Account, but want to remain risk free.

JP Morgan Chase Online Banking

In an age where I can purchase my clothes and food online, talk with my friends online, and even meet a spouse online—doesn’t it make sense that I can manage the funds in my standard bank accounts online?

It absolutely does.  Fortunately, the banks have heard our cry.

Online banking allows you to do everything that you used to do with your teller physically at the bank virtually over the internet. It is very easy to set up (different depending on which bank you bank with, simply ask your teller or search “[Bank Name] Online Banking”.

Why do I have several balances?

You may notice that your accounts each have two balances available.

1. Available Balance
   The available balance is the actual amount you have available to spend. This includes any “holds” or un-posted expenses on your account.
2. Posted/Present Balance
   The Posted/Present Balance is the amount that has already cleared your account.

What can I do with Online Banking?

Well, Like I said: Almost anything you can do in a brick and mortar bank.

1. Recent Activity
   This will outline all of the activity on your account for you for months, if not years, prior.
2. Transfer Funds
   This will allow you to transfer funds between your personal accounts, even accounts held at other banks.
3. Pay Bills
   By setting up online bill pay, you can have your bills automatically withdrawn from your account so you never pay another late fee again.
4. View Paper Statements
   This allows you to see all of your past paper account statements online in PDF form.
5. Order Checks
   This will allow you to order checks online.
6. View Rewards
   Many accounts allow for a rewards system when you use your debit card.  You’ll earn points for each dollar spent, etc.
7. Go to Customer Service

What is an Overdraft?

Overdrafting is the action of spending more from a checking account than you had deposited in the account. This commonly happens to new account holders or even occasionally to the seasoned depositor who simply miscalculated their expenses for a month.

The problem with this mistake is that it can be rather costly to the account holder. Often times an overdraft that totals under a dollar can result in $25.00 – $30.00 charges, depending on the Financial Institution.

What is Overdraft Protection?

Many banks offer an outstanding service called overdraft protection. This requires the account holder to have both a Checking Account and some form of Savings Account. By speaking with a teller, the holder can then have the two accounts linked, so that in the event of an accidental overdraft the necessary funds would be funneled from the Savings Account to the Checking Account in order to cover the gap.

This service is ordinarily free and takes only minutes to set up. It can save you hundreds of dollars after only a few miscalculations in spending.

How can I avoid Overdrafting?

Well, aside from simply relying on Overdraft Protection, there are several measures you’ll want to employ in order to avoid making this mistake and eating away at your savings.

1. Employ Online Banking (What is Online Banking?)
   Be sure  to check your balances regularly.  If you use a smart phone, many banks also have “apps” for checking your balance on the go.
2. While out and about, use your bank’s balance check phone number.
3. Be sure to balance your checkbook.

A savings account is a great place to store your money and earn a little interest, although they are a bit less accessible than a Checking Account (What is a Checking Account?)

As opposed to a checking account, when you store your money at a bank using a Savings Account, your money is not directly accessible (though it can be with a simple visit to the bank). By storing your money with the bank, you can be sure that your money is safe and secure.

The money is even further secured against bank failure by the FDIC (What is the FDIC?) as well.

Will I Earn Interest with a Savings Account?

You absolutely should. If you’re opening a Savings Account that pays zero interest, you should look into another bank. However, if you’re looking for any sizable interest a savings account is likely not the answer for you. The interest that you will receive will be very, very small. Often under 1% annually. But, minuscule interest is better than none at all.

Savings Account as Overdraft Protection

Many banks offer a great service called overdraft protection. Learn what Overdraft Protection is.

A checking account is an account held at a bank where they store and protect your money for you. This money is immediately available to you at all times, and the bank will usually provide extra services to you like a debit card, checks, and online banking.

By storing your money with the bank, you can be sure that your money is safe and secure.

The money is even further secured against bank failure by the FDIC (What is the FDIC?) as well.

Will I earn Interest?

Probably not, although it isn’t completely unheard of. Most checking accounts pay you via convenience and safety services as opposed to yielding actual interest. If you want to earn interest, you should consider looking into a Savings Account (What is a Savings Account?) or Investing.

Debit Card’s Convenience Factors

Most checking accounts are accompanied by a debit card.  This debit card makes it much easier to spend and access the funds in your account than to carry cash:

1. Mobility
   By carrying a debit card, you could have access to millions of dollars (if you were so lucky to have that amount in your checking account).  In order to have control over that same amount of money in cash, though, it would take carrying backpacks full of money.  This could be very heavy and inconvenient- not to mention it draws unwanted attention, which brings us to%hellip;
2. Safety
   If you carry cash, it is very easy for someone to steal from you.  There is little or no recourse and unless the police manage to catch the thief, you will likely never see your money again.
   With a debit card, however, as soon as it is stolen you can call your bank and cancel the card.  No thief will have access to it and your funds are much safer.

“Backed by the full faith and credit of the United States Government.”

But what does that mean and what does this “FDIC” stand for?

What is the F.D.I.C.?

The F.D.I.C. is the Federal Deposit Insurance Corporation. The FDIC was started after the Great Depression in order to “promote public confidence in the United States Financial System.” You see, when the depression hit, dozens of banks went out of business and people’s entire life savings simply disappeared.

It is the FDIC’s job to guarantee the deposits of all American Citizens in any FDIC member bank up to a predetermined limit. Due to the recession every individual account is insured up to $250,000.00 until December 31, 2013, after which it will return to its previous $100,000.00 level.

Why aren’t all banks FDIC Members?

Why wouldn’t a bank want to be an FDIC member? Well, most do. Almost every bank that you come in contact with will be FDIC insured. The problem many find with it though is that the bank gives up much control over risk taking. The FDIC breaks each bank into a category of “riskiness” based on how much capital (cash) they maintain (instead of lending out):

• Well capitalized: 10% or higher
• Adequately capitalized: 8% or higher
• Undercapitalized: less than 8%
• Significantly undercapitalized: less than 6%
• Critically undercapitalized: less than 2%

If a bank ever falls into the final category, they will be issued a warning by the FDIC. If the warning goes unheeded the FDIC can take over management from the bank.

What happens when a bank goes under?

The FDIC has two methods for dealing with failed banks and making right with the insured customers.

1. The Purchase and Assumption Model
   This is a fancy way of saying that they sell the bank’s assets (including your deposits) to another bank, who then takes over responsibility.  This is the preferred method.  The sale and acquisition is practically unnoticeable for the average customer and the customer can continue banking with their new bank just as they did before.
2. The Payout Method
   This is a less fancy way of saying that the FDIC sells all of the bank’s holdings and uses the proceeds (plus Government Money if necessary) to pay back the bank’s depositors.

What types of Accounts do the FDIC insure?

To be sure which accounts of yours are insured, check the FDIC website.
In general though, the FDIC covers “Deposit Accounts” which include:

• Checking Accounts (What is a checking account?)
• Savings Accounts (What is a Savings Account?)
• Time Deposit Accounts (CD’s) (What is a CD?)
• Foreign Currency Accounts
• Outstanding Cashiers checks, etc.

One can make a sizeable profit by taking and selling quality class notes in a college setting and then mass marketing them to all of the students in their class.

Idea Tested during Summer 2008 Semester

——-

Step One(June 3, 2008):

First day of Class; Develop a sellable product.

I went to class with a notebook and pen (primitive I know) and took my notes by hand. Then when I came home I transferred them into a word document. I found this was helpful to me because it forced me to go through my notes again, but it also seemed to yield much more professional looking and coherent notes than if I were to type them in class.

——–

Step Two(July 3, 2008)

Market my Product!

My school uses a system called Web CT Vista. Most of the students hate it, but I find it makes it relatively easy to communicate with my classmates.

I mailed out a quick email to everyone in my class saying,

“Hey there Everybody!

I wanted to send out an offer to everyone in the class. I am a very proficient note taker and I transfer my notes into MS Word each day after class. Here is a sample of my notes: http://www.theisticthinking.com/samplenotes.htmlI am offering copies of my notes up for sale at the rate of $15.00 for the entire semester. By purchasing them now, you will receive them by the day after each class via email or I can bring you a hard copy of each class’ notes by the next class meeting.If you would prefer to wait until the final exam, I will be selling the complete package together for $20.00

A few important details: I will be absent on June 24 and 26, so my notes will be taken out of the book for those days and not the notes from class. They should be just as good though.I will accept Cash, check or paypal as methods of payment. Just message me back here on Web CT or at Michael@theisticthinking.com if you’re interested!Again, My samples are here http://www.theisticthinking.com/samplenotes.html

I hope this finds you all well! Grace and Peace!

–Michael Caldwell “

Disclaimer: It may be a good idea to speak to your professor before sending out a message like this; or, like me, you may prefer to ask forgiveness than to ask permission

————–

Step Three(June 3, 2008)

I’ve already had three replies to my original email. Each of them are planning to meet me at class on Thursday and pay me for the notes at which point I will email them to them and continue to email the notes after class each day.

Step Four(June 5, 2008)

Between the Third and today I have had another email and will be meeting all four people before class to get their money.

The money has been received. Now I will be able to keep marketing and the best part is; these notes don’t expire after the course- I can continue to sell them to students in this Econ 2100 class until I’m graduated (or even after really, I just dont see that happening.)

Total Run Down:

Marginal Revenue: $15.00 per set sold
Total Revenue: $60.00
Total Expenses: $0.00 and 0 time; I was already registered for the class!

Total Profit: $60.00

Keep in mind that this was only for one class. I tried the experiment on a small scale, but come the fall I will be doing this in all five classes and marketing much more heavily. I don’t see why I shouldn’t be able to yield atleast 5-10 customers per class times five classes.

I had a friend come pick me up to get coffee this morning.

Living near a university, there are coffee shops nearly everywhere—but we knew we’d either be going to Caribou Coffee or Starbucks.

Caribou Coffee was about 10 miles north, Starbucks was about a mile south.

Why were we even considering Caribou? Because my friend David had a gift card.

Which made me ask the question…

How far out of your way do you go to use a gift card?

Ten miles?

We didn’t. My friend even took the time to say, “I know that using the gift card is the financially smart decision…”

We ended up at Starbucks.

We couldn’t make ourselves drive ten miles just to save a few dollars. The time and the gasoline made the idea of a Starbucks a mile away much more appealing.

Gift cards may be free money; but they’re not nearly as valuable and are almost always completely illiquid.

I used to get Best Buy gift certificates for my birthday every year. I hated that. It meant I had to drive 5 exits down the interstate, deal with traffic in the busiest part of town (the area is a nightmare), fight the lines in Best Buy, and buy something I never would have bought or wanted had I not had a Best Buy Gift Card.

Why was I stuck buying things I didn’t want in stores I didn’t shop at?

People Think They Can Spend Your Money Better Than You Can

Just look around. It started with the Government, now its your friends. Are they trying to upset or control you?

Probably not—if they are, get a new friend. They probably just feel strange giving you cash instead of a present. For some reason, if they give you a card they feel like they’ve personalized the gift.

It probably seemed that way for the other thousands of people who bought that identical gift card as well.

Money is plenty personal for me!

There are however, those occasional people that truly did buy you a gift card because they wanted to make sure you spent it in that store. These people drive me insane.

Gift Cards are the Gifts of Tyrants.

Sadly—I’m not talking to those people. There’s no talking sense into those people. But to all of you who are simply trying to personalize your gift:

Money is a great gift for most people. It always comes in the right size, color and everything else! Perfectly customizable and easily exchanged.

Don’t Overthink Gifts! Give Cash!

Why are gift cards worse than money? Loads of reasons! Here are a few:

1. Gift cards limit you to just one store.
2. It’s never the right amount.
   Whether the item you choose to get is less than or more than your gift card, you’ve been screwed.
   Either you end up with money that your gift giver paid on your card that you never use
   Or you have to spend extra money in the store that you wouldn’t have spent to make up the difference.
3. Gift Certificates have Expiration Dates
   I promise your money won’t have an expiration date. Well, actually, at the rate the Government’s going now… nevermind. A post for another day.
4. Gift Certificates force someone to go to a Store
   Giving someone money allows them to hang on to it, invest it, save it or anything else. A gift certificate is like saying, “Here. I didn’t want to get anything so you get up and do it.”
5. Gift Certificates have no Earning Potential
   I can invest a $20 bill and make an average of $2.48 a year according to the last 80 years of market history. My $20 gift certificate will be worth exactly the same a year from now though.

Please—for the sake of your friends and for me. If we all start giving cash instead, we may start the pattern and end the horrid reign of gift cards. Let’s make cash an acceptable gift again.

If you have a story about gifts in the form of cash or giftcards, let us know! Drop a comment below, or reach us on Twitter.

Common corporate and business training will teach you to strive after efficiency and effectiveness.
These are both great goals for both a business and an individual, but one can be rather tricky.

What’s the Difference?

Effective:
Adequate to accomplish a purpose; producing the intended or expected result: effective teaching methods; effective steps toward peace.

Efficient:
Performing or functioning in the best possible manner with the least waste of time and effort; having and using requisite knowledge, skill, and industry; competent; capable: a reliable, efficient secretary.

Thanks Dictionary.com!

Effective people always have goals in mind.  Efficient people can be efficient at just about anything.
In other words: you can be efficient without ever having been effective.  If you own a plumbing business, and your plumber plants 1000 flowers in all of your customers’ yards each day- he is being incredibly efficient without ever being effective, as your goal is to have him fix plumbing, not plant flowers.

How to Be Effective

Effective means Accomplishing your Goals.

How do you accomplish goals?  First you should set up some goals.
Goals need to be Realistic, Timely and Specific. To learn more about setting goals, read here.

Set up check points in order to reach these goals.  Keeping track of your goals and forecasting.

Want to be effective?
Do what you say you’re going to do.

Turning Effective into Efficiently Effective

Now just because efficiency can be turned the wrong way does not mean we don’t want it.
Efficiency is crucial to success.
Why? — We only get a limited number of days in our lives.
If we don’t make the most out of each one, we’ll never know how much we could have accomplished.

In order to become efficient, Don’t just pay attention to accomplishing goals- keep track of how long they take.

If you maintain effectiveness but not efficiency, you risk falling behind.

If you maintain efficiency but not effectiveness, you risk never accomplishing anything.

In order to be SUCCESSFUL, you need ot be Both Efficient and Effective.

1. Wordle.net

According to their website, “Wordle is a toy for generating “word clouds” from text that you provide.”
With wordle, you can either type a bunch of words in a field that the website will work with or type in a website URL and the site will automatically take the main words from that page.

For UseTheDollar.com- Wordle yielded this:

or

Wordle.net makes this sort of project so mind-numbingly simple, its incredible.

Print it out, Throw one of these into a cheap or self made frame, and voila! Gift ready!

2. Bake Cookies

I’ll tell you what- I don’t think you could make me a whole lot happier than to hand me a batch of fresh snickerdoodles. I’m a sucker for those things.

Throw some shredded paper in the bottom, bake a few different types of cookies, and put them in a basket and you’ve got a killer gift for any friend or family member!

3. Coupon Book

Make your own coupon book. These can be filled with things like “one free backrub”, “5 rooms vacuumed”, etc.

If you really want to make a killer one, mix it with your own home made coupons and coupons for different stores, restaurants and anything else that the receiver might be interested in.