Financial Oppo

"AestheticsInMotion" (aestheticsinmotion) 09/25/2020 at 15:08 • Filed to: None

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Any tips for personal finances during these times?

I’ve got one. As interest rates have plummeted these past 6 months, saving, checking, money market accounts, CD’s —even the high-yield online variety—have become almost useless for anyone hoping to earn a bit from interest .

However, there’s one company in particular that hasn’t touched it’s rates.

T-mobile. Yep, that T-mobile. 4% on the first $4000 is absurd given the Fed’s current interest rates . 1% return on any balance over that $4k is also phenomenal at the moment. Look up “best rates on high-yield accounts” and you’ll see that they cap out at about 0.9%, and that's for similar online-only savings accounts that5 often come with some strict requirements to unlock that rate .

If you’re a T-mobile customer already, opening a checking account with them feels like a no-brainer. 

SBA Thanks You For All The Fish > AestheticsInMotion 09/25/2020 at 15:16

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I’d definitely be taking long positions in canned goods, bottled water and small arms ammo.

Dr. Zoidberg - RIP Oppo > AestheticsInMotion 09/25/2020 at 15:20

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Anyone who takes advice from me is an idiot. So here we go.

If your career is largely unaffected by Covid: not a bad time to refinance or get that new car, I suppose.

For everyone else, including myself, same old same old:

- reduce frivolous spending. Drip coffee and less wee— I mean, beer

- cancel accounts for things you don’t use (like that gym you haven’t shown your face at in 8 months, or Hulu which you claim sucks now)

- look at that nest egg. Now that’s been threatened, is it really as strong as you need it to be?

- consider switching to a more durable career in the future

- keep paying your rent and mortgage if you can. If you have student loans (for example, fedloan is suspending all payments during Covid ), keep paying them.

DipodomysDeserti > SBA Thanks You For All The Fish 09/25/2020 at 15:25

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I have friends who work at gun shops and they’ve been insanely busy all year. I’m sure they  will only get busier if Biden gets elected. Dems are very good gun salesmen.

Mid Engine > AestheticsInMotion 09/25/2020 at 15:28

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I had no idea, that’s great! I have cash with Ally (now ratcheting down to .6%) and Citi still offering .9%

I need to keep it in cash as I’m building a new shop and house this year, it’s been frustrating to watch the yields on savings ac counts drop like a rock while the fed holds the rate at zero. There’s no correlation. 

Is T-Mobile FDIC insured?

AestheticsInMotion > SBA Thanks You For All The Fish 09/25/2020 at 15:29

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I want an underground bunker right about now

WilliamsSW > DipodomysDeserti 09/25/2020 at 15:30

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You’re not wrong.  But that has me wondering why the NRA doesn’t spend their lobby money backing Dems? 

SBA Thanks You For All The Fish > DipodomysDeserti 09/25/2020 at 15:31

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Despite the perception of tough gun laws in California, the business has been insanely brisk in SoCal since the virus hit. And, with the riots? New record levels of sales.

There should be an over/under on the effect on the markets when Biden wins.

SBA Thanks You For All The Fish > WilliamsSW 09/25/2020 at 15:33

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Who says they’re NOT? I mean, semi-seriously, the Dems took in an extra $100 Million of dark money last month. That’s most definitely NOT the “small donors” that supported Obama... Some deep-pocketed entities want Biden to win.

Thomas Donohue > SBA Thanks You For All The Fish 09/25/2020 at 15:39

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TOILET PAPER!!!!!

fintail > SBA Thanks You For All The Fish 09/25/2020 at 15:42

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Definitely, the NRA is putting money on both sides, they win either way as piles of shit like LaPierre operate in a void of real world accountability. I suspect the consumer weapons industry would love a Dem victory, simply to further the ignorant and paranoid emotions of the so-called “right”. If 45 wins again, the heat will only be on if he or his neo-fascist minions opens their yaps and add to the societal discord.

DipodomysDeserti > WilliamsSW 09/25/2020 at 15:43

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It seems they were spending most of their money on board members.

fintail > AestheticsInMotion 09/25/2020 at 15:45

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I just want a winning powerball ticket.

Maxima Speed > SBA Thanks You For All The Fish 09/25/2020 at 15:53

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I’ve got guns but am not really a “ gun person”. That being said, buying guns early during republican presidencies and selling them on election years seems like an excellent investing strategy.

longtimelurkingtdiguy > Mid Engine 09/25/2020 at 16:04

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Yes, it's insured. T-mobile isn't actually the bank. They are partnered with I think Customers Bank who officially hold the account.

subexpression > AestheticsInMotion 09/25/2020 at 16:05

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If you don’t feel like cooking, Aldi’s refrigerated take-and-bake pizzas are good and cheap. But skip their frozen pizzas, those suck .

In my area, the huge (16" maybe?) Aldi take-and-bake is in the same price range as the higher-end frozen pizza brand s in the big   grocery stores. But it’s usually a little better quality and it’s way more food.

Mid Engine > AestheticsInMotion 09/25/2020 at 16:13

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I have a degree in economics and I can’t for the life of me understand what the fuck is going on in the investment business. I know that the feds pumped trillions into the bond markets, including some really shitty bonds. Softbank is making it rain, buying up everything in sight, and we have mil lions fucking around on Robinhood with absolutely no idea what they’re doing. Idiots.

Stocks are a real gamble as all we’ve done for the economy is kick the can down the road, with the rich getting richer (tech prices are insane) . Bonds are worthless. P re c ious metals have been having a field day, too late to join that party.

I’m looking into a variety of reasonably priced equities that throw off dividends, I plan on moving my 401(k) into dividend plays while I watch the economy completely collapse. Good times.

LimitedTimeOnly @ opposite-lock.com > AestheticsInMotion 09/25/2020 at 16:44

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With interest rates so low and already having mine and my wife’s 401(k) retirement money in stock and bond funds , with the little extra we have to invest we are using to get a guaranteed relatively high rate . . . by paying off car debt quickly and planning to move on to mortgage debt soon.

No point in CDs with so little interest or additional stock investments with such volatility at the moment. Trying to keep our emergency money stable (despite our house’s best efforts) and stick to this plan.

BrianGriffin thinks “reliable” is just a state of mind > Mid Engine 09/25/2020 at 17:03

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I’ve been watching this whole thing with a ton of interest. My background in a past life was behavioral economics, but what is happening is still...shocking.

Right this moment is a terrible time to invest (I think?!), stuff is going to constrict come November / December due to the inevitable upheaval and unrest, regardless of who wins. Maybe? I don’t even know any more.

The market constricted in March due to corona uncertainty. It bounced back due to some input from retail investors and a lot of input from options traders doing goofy shit with the markets. It’s very much to the point where stock valuations are imaginary numbers with no basis in reality all based on sentiment. If everyone thinks something is going to go up for the simple result of going up, it’ll go up.

I refinanced my home to get a lower rate, and I’m going to try to refinance a small rental property to get some cash (though rates are going up quite a bit...). Wait until the likely plunge in the winter, and then buy some blue chip funds.

My biggest expense has been all the improvements I’ve been putting into my house on my own, since I have time to do five years’ worth of projects all right now 

barnie > AestheticsInMotion 09/25/2020 at 17:05

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FWIW and it’s nothing like what I’ve read here: I haven’t had a credit card since ‘83 save for a corporate card. Always paid cash for everything. But then I never owned a house or business nor had children . However , Sparrow cost ~240k to outfit and complete over 4 years .

I figure out what I need, find a good source, then figure out how to pay for it. Patience and perseverance are the keys here. There is less than a grand in my credit union (never use a bank!) accounts. Extra money went in to Krugerands for savings. Cash is king! 40 years of this practice and I’m comfortable in retirement. N o money accounts on my phone . I never allow institutions to pull money from my accounts. I live frugally but eat steak and taters twice a week. My car is 15 years old but it’s cheaper to keep it running than get a new(er) one since I have friends here to help me fix it .

DC3 LS, Fuck Hyundai, now and forever > AestheticsInMotion 09/25/2020 at 18:35

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wtf I have T-mobile and I had no idea you could open a checking account with them.

AestheticsInMotion > DC3 LS, Fuck Hyundai, now and forever 09/25/2020 at 18:55

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I don't see it advertised much

GLiddy > AestheticsInMotion 09/25/2020 at 19:00

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I quit chasing interest rates. The returns are too poor to even consider. I “make” more money on $2 Whopper Wednesday than I do on saving $100,000 at .1% interest. (Actually I do have $100,000 at .1% from an inheritance from an aunt.) Yeah, that’s 100/yr.while the regular price of a Whopper is $4.19, so paying only $2 a week ‘earns’ me 113.88 a year. Pathetic huh?

I’m not much of stock trader..seriously, but I bought Apple at the Covid dip and while I missed the top, I still made $11,000. Who gives a shit about interest rates unless you need short-term cash for a purchase. Right now though, I went about 80% into cash in my retirement investments. They hit an all-time high (of my net worth) and I got out except for  some index stocks and some gold mining stock I decided to hang onto just in case the market moves. I will look for opportunities after the election.

PatBateman > Mid Engine 09/25/2020 at 19:11

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People that invest substantial money on Robinhood are the same people that are set to lose money in the future and then say that the market is rigged (and take zero responsibility).

Depending on the stocks, they can be a gamble OR can just be prudent investing. I’m not allowed to give examples here (thank FINRA for that), but there are plenty of companies that will be good in the mid to long term. Short term... We’ll see what the rest of the year has in store (not saying it’ll all go to shit, but there will probably be election-related volatility).

When it comes to investing in dividend stocks, BEWARE THE VALUE TRAPS!!! There are a lot of companies that look great to invest in (all the numbers will point to it), but aren’t going to  work out. And the economy is coming back online after we purposely shut it down; d on’t short it.

PatBateman > AestheticsInMotion 09/25/2020 at 19:13

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Would you like advice from someone who does this for a living?

AestheticsInMotion > PatBateman 09/25/2020 at 19:15

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Yes

PatBateman > AestheticsInMotion 09/25/2020 at 19:35

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I have worked in finance for 20 years. I started from the very bottom rung of the ladder as a teller (despite having a business degree, don’t come out of college in a recession), became a banker, a licensed banker, and now a wealth manager. What you are doing is called “rate chasing”, and it’s actually detrimental to your financial well-being.

Let’s say you have $4,000 in your savings account, and you can get 4% on every little bit of that money at T-Mobile. That’s about $160 in an entire year, or about $13/month IF they give you that rate for an entire year.

Instead of getting that $160, another option is to find an investment advisor at a reputable financial institution that offers incentives to have your entire relationship there. So, let’s say Sara works in the investment arm of Acme Bank down the road. You go to her and tell her that you want to open a checking account, savings account, credit card, online banking, bill pay, AND an investment account (IRA or non-qualified, whatever) with the bank. You’ll be lucky to get .2% right now in the savings account, but interest rates are currently at 5,000 year lows (yes, you read that correctly), so you’re not missing out on much. But what you’ll probably get instead is a free checking account, discounts with your credit card (and probably help building your credit), the ease of having everything under one roof, and discounts with your investment account. In the future, you’ll also probably get a discount on a mortgage and car loans to boot. And yes, those will come in handy, regardless of what mortgage brokers and/or dealership finance managers say.

All of that will add up to more than $160, but I’m not done yet. What you get from Sara is added attention and help building your portfolio, planning for retirement, and meeting your financial goals. I can tell you personally that clients who  commit to me and my process get discounts, but a lot more attention, too. THAT alone adds up to multiple times that $160.

I’ve said all of that to say this: stop chasing introductory rates and find a trustworthy PERSON at a financial institution that will commit to you when you commit to them. Intro interest rates are for people that forget about the big picture. Don’t be that guy.

AestheticsInMotion > PatBateman 09/25/2020 at 20:08

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Any advice on finding a good financial advisor? I’ve spent the last few years trying to build up my financial literacy and feel like I’m in a pretty good place now. That said, I’ve thought for a while that an advisor would be the best step moving forward. I'm just a bit unsure where to even begin looking. Between credit cards, brokerage accounts, checking, savings, etc. I'm linked up with a lot of the bigger companies and a few smaller local ones. 

PatBateman > AestheticsInMotion 09/28/2020 at 09:27

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On finding a financial advisor: First, look at the banks you’re already linked to and see if they have in-house advisors. For example, Chase, Bank of America, and Wells Fargo will all have advisors you can meet IN PERSON at their branches. That’s important, because you shouldn’t rely on a 1-800 number to speak to a stranger who you know nothing about.

Second, ask them questions like “how often do you speak to your clients”, “how long have you been in investments and finance”, “what is your financial planning process”, and “is there a time when I get handed off to another department (for example, if you have more than $250k in assets)“. If they’re newer in the industry, then ask how they would put a portfolio of investments together. Usually, the firms have their own risk-adjusted portfolios (do ETFs for now, but mutual funds will be good when you have a bit more money saved up), and those are pretty good. Also, check them out here .

Finally, make sure that you remain financially literate, but don’t try to be more than that. There’s a plethora of bullcrap on the internet that will lead you down the wrong road. I know you know this, but some of the sources (fool.com, zerohedge.com, etc) look like they’re legit when they’re actually filled to the brim with complete horse shit. If you want to know about a stock, or IRAs, or market forecasts, ask the financial advisor for some research from their firm. I have clients come ask me ALL THE TIME about something they read in the news or online, and I have to set them straight. That’s fine, but the danger is when they start believing the free online a dvice from dubious (and in some instances, anonymous) sources over an award-winning research department.

Oh yeah: look to consolidate some of those financial instruments at one institution.  I’m telling you, it can absolutely be worth it.  When one of my clients has their brokerage, IRAs, credit cards, and banking business with me, they pay next to nothing in fees on top of getting super low rates on things like mortgages and lines of credit.