It is not what you expect but what you inspect. I noticed that my Wells Fargo basic business account charged me a $12 “monthly service fee” when I was looking over my statement. Apparently, in order for the fees to be waived, I need either:
- a $6,000 average balance (calculated per day) or
- be enrolled with their merchant services (the cheapest plan is $30 a month) or
- business payroll transaction
Since I have no employees, don’t want to pay $30 a month to save $12 and will never put $6,000 in a checking account earning no interest, it sounds like it’s time to find another option.
To give Wells Fargo some credit though, I spoke with a banker and he told me not to worry too much about the fees because he will waive them manually for me. The bad part? I have to ask them every month.
The hour visit to my bank sparked me to look at my other Wells Fargo accounts. To my surprise, I found two monthly bill pay fees for $6.95. Again, they manually waived those fees for me and helped me call another department to have the “feature” canceled since I haven’t used it since 2007 (currently, I use FNBO Direct’s bill pay feature because I can keep my money in a savings account until last minute).
When was the Last Time You Checked Your Bank Statements
I didn’t appreciate Wells Fargo charging me these fees without notification at all but I’m thankful that the banker was nice enough to waive them. If I never check my statements, I would be short $18.95 ($12 + $6.95) every month. Since the weekend is coming up and you should have some time, why don’t you check your statements? Just pay special attention to:
- recurring charges
- any line item that has the word “fee”
- checks that don’t have a description
It really doesn’t take that long but the exercise might help you recover some lost money. If you do find erroneous charges though, remember to be polite and nice to the bank representatives because he/she:
- is there and have the ability to help you.
- wants to help you (to keep your business)
- doesn’t want to charge you a fee if they had a choice (it really doesn’t help them to charge you money)
- is already having a bad day worrying about their job security with all the banking turmoil
- most likely lost more money than you have in the stock market as they probably own more banking stocks than you do.
Note: I wrote the last few points because when I was at the bank, I saw a gentleman laid out all his frustration on a very young (and probably fresh on the job) banker. We are all frustrated when we talk with customer service reps but we should always stay calm. NO ONE deserves to be yelled at just because of their position in the company.
Photo credit: Shika Kaoin
Picking the wrong goals is like running on the hamster wheel. Once you achieve one goal, you set another and then another after that. No matter how many goals you achieve, you are back to square one as you set new ones. There is really no end game.
Money is the Best Example of This
Think back to the time when you were young and had nothing. You might have a goal like “I want to be a millionaire” or something like that. You run up that wheel but realize that no matter how hard you run, you seem to be stuck at the bottom. You look up and ponder about what could have been, but all that motivation just makes you run harder and harder.
The more you drive for making more money, the less you live for yourself. You work those extra hours, only to sacrifice time with your family. You worry about your finances, only to create tension between you and your spouse. You nickel and dime every opportunity, only to find that you scarred so many relationships.
The older you grow, the more you realize that it’s not money that you seek. It’s the freedom, it’s the health and it’s the family that you really treasure. You learn that money is only the vehicle that helps you get to your goal but not the goal itself. Finally, you stop running because you realize that there’s no point when you already have what you need by resting at the bottom.
Some people realize this early, while others unfortunately much later. Eventually we all know – money is important but there really are much more to happiness than having money.
It’s never enough, as you’ve no doubt heard before. But in many different ways, it’s always enough.
The last few weeks reignited fears that our wealth will disappear in the stock market. In fact, many people have been wondering how they can meet their long term financial goals if every asset class seem to be losing value.
For those still pondering, I want to point you to an idea that I just heard on TV – the one page miracle.
The idea is basically for you to write down your goals for your health, wealth and relationships. Everyday, you read through the page and ask yourself one question. Is what I’m doing getting me closer to my goals?
If we apply this to our financial situation, we will realize that:
- worrying about our wealth doesn’t make the list
- hoping that stock prices would magically go back up doesn’t qualify
- neither does complaining to everyone and their pets about what your net worth was at the end of 2006.
Worrying for Nothing
Let me tell you that I’m not somehow immune. I sometimes hope that my 401k balance will go back up. I worry about whether I can afford to buy a house someday and I worry what living in America will mean as we ratchet up our debt on a national scale when the problem originated from excessive borrowing at an individual and corporate level.
I do realize though that doing all that doesn’t help me one bit in reaching my goals, so let’s just stop that. Let’s work on it together and stop worry, hoping and complaining okay?
Doing Something About Your Financial Goals by Going Back to the Basics
If you are still with me by this point, start by doing a few of the following about our money.
Instead of worrying,
- Figure out an asset allocation plan that makes sense for your time horizon that doesn’t take into account recent performance (ie have a long term view if you have years to go before retirement).
- Put together how (and how often) the portfolio will be rebalanced.
- Determine how future income will be added to your portfolio.
- Write it down and stick to it.
Pretty basic and nothing you haven’t heard of huh? The bad news is that most of you have never put a plan together even though money relates to so many facets of your life. The good news? There is absolutely nothing complicated about it because otherwise, no one could ever get it right.
All through life, we were taught to believe that bigger is better. More, more, more our teachers would say; higher, higher, and higher, our parents cheered.
When we grew up, we carried this mentality as the way of life. We stretched to buy the biggest house, we worked long hours to advance our career as much as possible and we did everything we could to grow our money. We were hypnotized that the “better”option is always what is best for us.
A couple of days ago, Emma and I were trying to decide on a place to eat. We thought about the sushi place across the street, the korean barbeque on the other side of town and the McDonald’s close by.
In the end, we went to McDonalds and had a very satisfying experience. For a little over $8, we had 3 sandwiches, 2 fries, 2 sundaes and drinks.
If we went to the sushi place, we might end up being “sort of” full with a $60 bill.
Supersized Fries or the Supersized House?
When we were looking at houses a year ago, we saw many that have almost no furniture inside. These are not cheap houses mind you. These are houses that were being listed for $600,000 dollars with no furniture. Apparently, many home owners wanted the bigger house but couldn’t afford to even put furniture inside their home. They must’ve always picked the sushi place and forget that you can supersized your McDonald’s happy meal as well.
Fallacy of Chasing Your Dreams
Who doesn’t want that bigger house or be a (multi)millionaire but what is the true cost of your pursuit? Are you actually living life while you work ten hours a day and commute for another two? The sad thing is that once you reach those goals, you will make new ones and there you go chasing it again. Like my old boss always says “it’s never enough”.
Live Your Life
There’s really one piece of advice. Know what is enough and live your life because you deserve it. The dollar menu ain’t so bad.
Layoffs are never pleasant, but there are some layoff procedures that just makes you feel even worst. I’ve heard of a few recently that caught my attention as either unique, disastrous, or both. Here they are and hopefully business owners can read this and understand how these layoffs not only burn bridges, they actually affect productivity for the people that stay on board.
- The One by One – This is a crazy method which will sure kill your employee’s moral. Some companies will fire one person each hour for that day, one by one, until they are done with the layoffs. You might be saying good bye to your long term friend and showing sympathy one hour and be booted yourself the next.
- The Yes and No Rooms – During the dot com bust, floors of buildings were being laid off. One of the least humane ways of layoffs are when everyone would be asked to go to two rooms, where they would wait to see whether they were the room that stays or the one that needs to leave.
- My Keys Were Changed – Some companies would just change the security code to prevent you from even enter the building when you get to the office in the morning. I mean, come on. Can’t you even save me some gas by telling me the day before?
- Just Quit Already – Some supervisors don’t have the guts to tell people that they are being laid off and instead do everything they can to get you to quit.
- Make Them Fight for It – I didn’t think this was done in reality but my friend told me that her employer asked two people to go into the room and told them that one person is going to be let go and for the two to give reasons why he/she should be the one staying. I sincerely wish that those people who do this end up losing all the good employees.
- Giving You the Chicken – Here’s some historic and culture sharing. Back in the old days when many people work for small businesses in Hong Kong, the owner would always treat all the employees for dinner during Chinese New Years. It is said that during the meal, the boss giving you the chicken leg means that you are fired. (I heard this from a TV show long ago and I can’t verify it now, but I remember believing the story at the time)
- The Only Kind That is Acceptable – Every employee should be told via a company get together in exactly what’s happening and each supervisor should have heart-to-heart talks with the employees separately and let them know honestly why they are being let go. If I spent 40+ hours working for you, I deserve to at least get an explanation.
It’s already bad that we are being laid off. Please don’t upset us even more by doing it the wrong way.
This is a guest post from Neal Frankle, CFP, who regularly contributes to this blog on investment subjects.
Eventually the market is going to turn around. Your funds will start going up in value. But my guess is, even then, you’ll find it hard to stay motivated about investing.
The world is going to call you a doofus.
I say this because regardless of how the market behaves, the ten-year track records of mutual funds are going to start looking very ugly very soon. In fact, its going to take a long time before those ten-year track records start to recover. As a result, you’re going to feel like an idiot for investing.
What’s happening is that the strong positive returns of the fourth quarter of 1998 are dropping off the rolling ten-year performance numbers. To make matters worse, the terrifying losses of the fourth quarter of 2008 are starting to roll in to those averages. And if that weren’t bad enough, the great returns realized during the bull market of 1999 are going to be replaced by the horrific numbers of 2000, 2001 and 2002.
Expect to start seeing negative 10 year averages for most of the funds you own. When you see those results, you may start to think that stocks don’t pay to own. Worse, you’ll see that bonds have a better 10 year average so you might (heaven forbid) plow into bonds. But if you think about it, interest rates have nowhere to go but up and that usually spells trouble for bond investors.
How do you protect yourself from falling into this trap?
- Understand statistics. It is generally accepted that the stock market returns vary from -30% to + 50%, 95% of the time. So 2008 wasn’t typical but it wasn’t unprecedented. The market only returned one negative year from 1982 through 1999 so we got spoiled. Over the longer view, the market has a negative year once every four years. You have to expect some bad years. I guess you figured that out by now.
- Understand that we have just experienced (or are experiencing) something in the stock market that happened only 3 times in the last 80 years. To expect this kind of pain to continue forever is not realistic. To say that the market will never recover flies in the face of observable history.
- Don’t be a doofus. If you had a bad year, or even a few bad years, that little voice inside you is going to be screaming that you should be more conservative with your investments. That’s the worst time to make that kind of change.
- Get your decision time frame in line with your investment time frame. Let’s say you have 20 years to invest. Make the best decision on how to invest for that 20 year time frame and stick to it. That doesn’t mean you don’t re-allocate the portfolio. What it means is that you shouldn’t make a decision about how much risk to take based on how you feel that morning if you have another 20 years to go till retirement.
You can’t change what’s already happened to your portfolio. The only thing you have control over is what you do next. Re-establish your time horizon and ignore the reports you’re going to see about how terrible the stock market is. These are the most important steps you can take to make sure you don’t become an investment doofus in the years ahead.
Have you abandoned your investment strategy? Why or why not?
