Writing Daily

Though I've neglected my blog as I've moved beyond my journey into minimalism, I still post here when I have things to say. I had a lot more to say when I was constantly reading about personal finance, but I still will come upon interesting business ideas from time to time.

One model that I love is at 750words.com. Buster Benson, the creator of the site, wanted to make a site that encouraged him to write every day. I've found the site invaluable for the writing habit. It's set up to make writing every day painless and easy.

The site is minimalistic. You start with a blank page. You need only to sit down and write 750 words per day. You get an extra point if you do it without any distractions of three minutes or more.

I've vowed many times to write more. Sometimes, I get buildup and I'll spend a couple hours writing. I never seem to stick with my goal.

I started on 750words at the end of February when I saw it suggested on another site. I've used it every day since and I plan to continue ad infinitum.

There are a handful of nifty badges that Buster has to motivate people. So far I have six out of the possible nineteen. I've reviewed all of the badges and decided to gun for the Early Rooster and the NaNo next. The Early Rooster should be completed within a few days, but the NaNo has to wait for the summer. I'm planning to make June my NaNo month. I'm already writing 750 words per day. If I write 1,666.6 repeating words per day in June, I can hit the NaNo target. I will probably hit the Flock without consciously trying for it. I have more than 13,000 words already and I will definitely keep writing on the site past the 100,000 word mark.

Two of the badges that I've already earned are the Cheetah and the Hamster. It's funny how that happened - I've formed a habit of taking 10 minutes to write per day. I know that I could actually be completely fine with a distraction and come back. I know that I don't have to write my entries in 20 minutes or less. But I find myself aiming for my 10 minute goal without any distractions. It's the easiest thing to promise myself to write for 10 minutes. My fastest time to 750 words is 8 minutes. The site is a good exercise in self-discipline, because I can promise myself to sit down and type for 10 minutes without distractions of 3 minutes or more every day.

Todd Bol's Libraries

I love the idea of sharing books a la Todd Bol. It's very similar to PaperbackSwap, but it's even easier. You don't have to worry about points and you don't actually have to ship anything. You simply have to open yourself up to your community and let people take or give books as they like. What an excellent example of how people can help one another voluntarily and with minimal hassle!

Fifth Third and Its Draconian External Transfer Policies

My parents decided that they needed to set up another account for me. I've just been drawing from one of our banks until now, but they thought that it was time to put my money into another bank. So the rest of my allowance for this school year went into a Fifth Third bank account.

Mistake #1
They left it up to me and I FOOLISHLY chose Fifth Third because my father and I didn't have any linked accounts. Fifth Third was the place to connect our finances, as my father relies on it for his personal expenditures.

Everything went swimmingly until I needed to pay my credit card bill. As I set up the transfer, I realized that they had a $3 external transfer fee. I was outraged. It's not about the amount; they were charging me to access my OWN MONEY and put it into my own account!

I had to take emergency measures to pay my credit card and I swore that it would be different for February.

Mistake #2
I thought that I could live with paying a $3 fee once, to get most of my money out of their clutches. Like a fool, I started to go through the external transfer process again. To my surprise, I couldn't get it to go through. I apparently hit the limit.

I was astonished. The little tab that they have in the external transfer section states that I have a monthly limit of $100,000. My blocked transfer wasn't even near that.

So I investigate a little more. It turns out that I have a $2000 daily limit and $5000 monthly limit on my external transfers to every linked account. They lovingly tack on a $3 fee to each of those transfers. The reason for the $100,000 limit comes from the fact that they limit incoming transfers at $25,000 per account. Unlike external transfers, incoming transfers are free! Hurray.

Today, I went to the branch and asked them if there was any way that I could get the external transfer fee waived. They told me that it was impossible.

tl;dr I withdrew ~63% of my account.

The Full Story
After learning about the sneaky external transfer fee, which only shows up listed as a $5 external transfer fee if it's verbal, I looked through the list of the other fees that Fifth Third charges. It charges for many, many things that I haven't been charged for in my life. All of my other accounts have those either waived or the fees just do not exist.

Mistake #3
They charge $7 for cashier's checks; I decided to just take out my money in cash and dodge their fee for access to my own money. I could go straight to another bank, one of the other four where I have accounts, and just deposit it there. The bank teller freaked out when she saw my withdrawal slip and went to whisper to a lady whom I think is her supervisor. I couldn't hear most of the conversation, but she was very animated and looked like she had just been shocked.

She came back and told me that they recommended that I get a cashier's check because I shouldn't walk around with that much money in cash. I told her that I didn't want a cashier's check because I had read the full list of fees and knew that they were going to charge me for it.

(Change to present tense)

The nice supervisor lady soothes everyone's ruffled feathers and says that my account gets one free cashier's check a month. I don't think that it's true, because it's nowhere in all of the information that they gave me. But, hey, I'm not going to argue with getting my cashier's check for free. So I tell the original teller that ok, I'll take the money as a cashier's check because they won't charge me for it.

She retorts angrily, "It's seven dollars!" She, of course, is looking at my account balance and thinking that I can afford to pay seven dollars. But, again, it's the principle. They want me to pay them to access my own money. The nice supervisor steps in and says, "But it's free anyway," with a smile. "That's great," I say, smiling back. The teller prints out the cashier's check and has me sign the top part of the sheet. Then, she leaves for a few minutes to get it authorized.

(Change to past tense)

She came back with it. I took the cashier's check, thanked her, and left.

What I Learned
1: Always check the bank before depositing money there. Always. I thought I was safe because my parents banked there, but I was wrong.
2: Bank tellers may not like giving you your money. They work for the bank, not for you.
3: It's actually illegal not to disclose bank fees due to the Truth in Savings Act, but I'm not going to prosecute over a $3 fee.
4: I'm so young that I take mostly fee-less bank accounts like my accounts with ING Direct for granted. I have experienced the awfulness of the big banks first-hand for the first time. Even though ING Direct was bought by Capital One, it remains better than Fifth Third, which I consider a major bank. I'm disgusted with brick-and-mortars now.

Mitt Romney's IRA

Mitt is slowly moving to the forefront. As he gathers more support and with the upcoming caucus win in Nevada, he is going to become the #1 Republican candidate. His business record is incredible and he has the common sense that we need to turn around this nation.

A story about him this week emphasized the strange way that Mitt's IRA was set up: there might be assets valued at over $100 million in a tax-deferred account. Mitt will have to start taking distributions when he is 70 1/2 and the IRA will be taxed at a maximum of 35%. The TIME article on the IRA completely neglected the fact that Mitt's IRA is valued highly because it's full of equity in Bain/Bain Capital.

I have a fair amount of interest in estate planning. I personally believe that he's not planning to live on his IRA while he is retired. He will take the minimum distribution and live off the income of his blind trusts. Then, he will pass on the assets to his wife and descendants in a tax-advantaged way.

It would have helped him to have a Roth IRA, where he would have paid the taxes when he put the money into the account. However, the Roth IRA is a relatively new invention. It wasn't around while he was working for Bain. The story actually goes to highlight the benefit of Roth IRAs for everybody. 

The idea that IRAs work because they reduce short-term tax liability is ridiculous; IRAs would only make sense if trying to scrape together enough money to pay taxes during April was impossible for you. If you're that cash-strapped, though, you may not want to tie your money up in an account that you can only access without penalty when you are 59 1/2.

Creating Our Future: A Case Study

I've been reading That Used to Be Us and it's incredibly thought provoking. I'm not finished with it, but I came across something on page 85 that reminded me of one of my acquaintances, Alvin Chen. He works for Siemens and is exactly what Thomas Friedman says our future looks like.

1) Alvin is American-Taiwanese.
He's fluent in Mandarin and has studied at Tsinghua University in Beijing, but he grew up in Colorado. His dad was one of the engineers that came to the US back in the 70s and recently retired from IBM. Part of our future is made of talented immigrants and their kids.

2) Alvin is an engineer.
Vivek Wadhwa, Thomas Friedman, and others like Senator Lugar are interested in STEM students. Why? These people create jobs. I have more than my fair share of engineers in my family, but Alvin stands out because he's part of my generation, not a Boomer or a Gen Xer. Alvin is part of an increasingly rare breed, because few of us (including myself) are too intimidated by the rigorous coursework in engineering.

3) Alvin is an energy engineer.
That would mean nothing to me, a non-science person, if I couldn't talk to him about what he actually does. When he was in college, he put together a house that would use only wind, solar, and geothermal energy. Now, Alvin is a sustainability professional, which means that he works towards cutting waste and monitoring energy usage in large places. When Alvin was in Kentucky, he did work with the University of Kentucky in Lexington to cut energy waste. He is well positioned in a growing part of the economy.

4) Alvin is going back to school.
Now, a bachelor's degree is par for the course. A master's degree is the new bachelor's. Alvin is going to choose between a normal MBA and an MS in global sustainability. That's what it takes to be competitive  today, when we have college-educated kids in my generation totally unable to find jobs as white-collar jobs disappear or are farmed out overseas.

Higher education in a growth segment of the economy will ensure that Alvin will have some security in the future.

5) Alvin is a creative creator.
Friedman says there there are two kinds of workers: creators and servers. Alvin is a creator. He gained company-wide recognition when he put together some programs in MATLAB to do his job, energy analysis. Though it wasn't his job, he did it on his own. He was actually told not to do it by his boss, because his boss was concerned that it would detract from Alvin's actual job, which was the analysis itself. His programs are now saving the company literally uncountable sums of money, because he's made analyzing energy usage very efficient.

Wabi-Sabi

I've always loved things with one glaring imperfection. The best description of this love until today was found in a book about Jahanara, the daughter of Mumtaz Mahal for whom the Taj Mahal was built. One of her servants did not want expensive, perfect things. He only wanted things with a beautiful, glaring imperfection.

Today, I learned the word for the appreciation of things with faults. It's Japanese: wabi-sabi.

Characteristics of the wabi-sabi aesthetic include asymmetry, asperity (roughness or irregularity), simplicity, economy, austerity, modesty, intimacy and appreciation of the ingenuous integrity of natural objects and processes.

Wabi-sabi encompasses how I feel very well. I also was never taught this word, even when I was exposed to Japanese culture all those summers I stayed in LA. I think appreciation of imperfection is something learned, not taught.

You Can't Make the Horse Drink

Sound financial advice was given free of charge to investors, but almost none of them followed the advice.

I don't find this advice astounding at all. I've just read Sway, which explains that people chase losses when it comes to stocks. People tell themselves that it will get better; they never think that the stock could tank. When it does, they are devastated. If people simply sold on the initial slide down, they would have recouped most of their money. People are very loss-averse, so much so that they'll continue to take a loss when they should simply sell.

Utpal Bhattacharya, one of the authors of the study and my finance professor, says that Dodds-Frank simply adds a burden to financial institutions. If we truly want to protect consumers, we have to focus on the demand side, not the supply side of investments.