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Earlier this week, the house approved the $700 billion bailout bill. If you assume that there are 300 million Americans, this works out to be $2,333 per person. Of course, not all 300 million Americans are taxpayers. If only half of Americans are taxpayers, this works out to almost $5,000 per person.

What else could you purchase for $700 billion?

The Seattle Mariners play in Safeco Field. It cost about $517 million to build. For $700 billion, you could build 1,354 Safeco Field’s.

The new Freedom Tower in New York City is estimated to cost $3 billion to build. You could build 233 of these for $700 billion.

A dollar bill is 6.14 inches long. 700 billion dollar bills is 4.298 trillion inches in length. This is equal to 67,834,595.95 miles. The distance to the moon is 238,900 miles. This amount is about 284 times farther than the distance from the earth to the moon.

The current price of oil is $93.88/barrel. At this price, the US could buy 7,456,327,226 barrels of oil for $700 billion. The US currently imports 10,031,000 barrels per day. For $700 billion, we could import at our current rate for 743 days without running out of money assuming that the price stays the same.

At $9 per movie ticket, the government could buy each American 259 movie tickets.

A dollar bill is .0043 inches thick. $700 billion worth of dollar bills is 3,010,000,000 inches thick. This is equivalent to 250,833,333 feet or 47,506 miles thick. The Eiffel Tower is 1,063 feet tall. You could stand 23,596 Eiffel Towers on top of each other to reach the same height of $700 billion worth of dollar bills. The highest point in the world is Mt. Everest standing at 29,029 feet tall. Even at this staggering height, you would have to stand 8,640 Mt. Everests on top of each other to be the same height as $700 billion worth of dollar bills.

There are plenty of other comparisons I could make to show enormous amount of money that the US is spending to bail out the financial industry. I can think of plenty of other things that the US could spend their money on.

For the past few months we have been having multiple people come in telling us how worried they are about their deposits at Washington Mutual. It seems like these days people are starting to act on these worries. Yesterday we took in about $500,000 in new money that was deposited straight from Washington Mutual. $500,000 doesn’t sound like a ton of money for a financial institution, but if you consider the fact that our size is only $500 million, it puts it in more perspective. This comes out to .1% of our total deposits.

One should also take into consideration that this data is for only one of the 8 branches. If this coincidentally happened at each of our branches, this would have totaled $4 million in new money just from WAMU for the day.

WAMU is insured by the FDIC up to $100,000. If they fail though, you won’t have instant access to your money. It can take the feds up to 3 months to get your money back to you. If you were without your money for three whole months, what would you do? This explains why people are starting to panic more and more about WAMU.

If you find yourself worried about your account at WAMU or another institution, consider moving your funds over to a credit union. Credit unions are typically more conservative in nature than banks, and therefore are a safer bet for your money. Credit Unions are insured by the NCUA, which is similar to the FDIC. The NCUA insures your accounts up to $100,000 as well. If a credit union fails though, the NCUA will have your funds back to you within three days, not three months. Something to consider when looking for a new institution.

Yesterday I stumbled across this website somehow or another. I’m not totally sure. Anyway, what I found was a very useful and informative site. Ever wonder what mutual fund companies own your particular stock. Better yet, what stocks does a particular mutual fund hold? At MFFAIS you can find that all out from their wealth of information.

Here is how it works:

You search the name or symbol of any stock or mutual fund that you want to look at. It doesn’t seem like this search option has been perfected yet, because I had some troubles finding a stock using the search tool. The best way to find what you are looking for is by starting letter. If you are looking at a stock, it will show you all the mutual funds that are currently invested or recently sold out. It also shows the number of shares that they own and what those shares are worth. You could also click on a mutual fund and it would show you all of the funds current holdings and recent sells. It then shows the number of shares in each company that fund holds.

You can also find out some interesting information on the site’s home page. For example, the top mutual fund class right now is the Global small/mid cap growth class. It also shows that Philip Morris was recently added to 230 different funds.

While I wouldn’t base my trading decisions on what this site says, it is interesting to see what the professionals are doing. If picking stocks is what they do every day for a living, I would think that their choices would likely be a bit better than mine. Just a guess. Although it is nice to see that some funds are doing worse than me this year. According to the site, the worst performing fund is Fursa Alternative Strategies LLC.

School Employees Credit Union of Washington is having a rate promotion as well. According to the website, this one does not have a particular promotion name, but it is a promotion nonetheless.

Here are the details:
SECUWA will give you 7.71% APY on any amount up to $750 in both your checking and savings accounts. In order to get this great rate, you must meet two requirements. First you must have direct deposit, and secondly you must have eStatements. If you meet these two requirements then you will get the rate. All balances above $750 will earn the standard savings rate. Currently, savings earns 2.27% and checking earns .50% on balances above $750.

So far this promotions seems to have the best bang for your buck. You earn a high rate over a decent range, and you only have to have two requirements. In actuality, these two requirements are actually quite simple. The only problem with this institution is that they only have two branches. One is in Seattle, and the other is in Spokane. They do have access through the co-op network of ATMs.

Horizon Bank is also offering a rate promotion, but this one is a bit different from the BECU one. You will notice as I go through these promotions that none seem to have the same requirements. The Horizon Bank promotion is called the “4-5-6″ promotion. The reason for this is that you can earn up to 4% on balances up to $5,000 for 6 months. As with just about any financial promotion, there are a few rules needed to follow in order to get this rate.

• $100 minimum opening deposit required
• You can earn 5% on the account if you open a checking account as well
• This checking account must have 10 or more transactions to earn the rate
• Minimum balance is $500 to avoid a $7 monthly service charge
• Balances under $2,500 earn a rate of .05% APY
• At least 50% of the deposit money must be new money

For all the rules and restrictions, be sure to check out the official flyer.

This account would be good for someone who has more than $2500 to invest. Anything under $2,500 earns only .05%, so I’m not really sure what the point of that is. Also, the minimum opening deposit is $100, but you need $500 to avoid the $7 monthly fee. I’m not sure why anyone would open it with only $100. I have definitely seen better deals out there, but it is a compelling offer if you have a bit of money and need a checking account.

About Horizon Bank: The bank was founded in 1922 in Bellingham, WA and went public in 1986. It trades under the ticker symbol HRZB and is currently trading at $7.10 with a market capitalization of almost 85 million. It has 20 branches within Whatcom, Skagit, Snohomish and Pierce counties in Washington.

I said in a previous post that I was going to discuss some of the promotions that banks and credit unions around the state are trying to use to attract deposits. BECU is the largest credit union in Washington State at over $8 billion dollars in deposits. They were one of the first companies that I can recall that created and heavily advertised any sort of accounts with super high rates. Let’s take a look at the programs that they offer.

BECU currently offers what they call the Member Advantage account. Essentially these are enhanced savings and checking accounts that pay a substantially higher rate provided certain criteria are met.

For Member Advantage savings accounts, members earn an APY of 7.5% on the first $500, and 1.76% APY on all balances above that. If you only have regular savings, you will earn 1.76% APY on your entire balance. It sounds like a big deal, but the Member Advantage will only get you ((7.5% - 1.76%) x $500) an extra $28.70 per year irregardless what your savings balances are.

Member Advantage checking accounts earn 7.5% APY on the first $500 and then .5% on everything above that. Regular checking earns .5%. Having the Member Advantage checking account will earn you ((7.5% - .5%) x $500) an extra $35 per year.

So what do you have to do to qualify to get Member Advantage and potentially earn an extra $63.70 per year?

Here are the official requirements:

• Open both a BECU Savings and Checking account
• Sign up for free eStatements instead of receiving paper statements in the mail
• Sign up for one or both: Free online Bill Payment and make at least one payment a month and/or a recurring Direct Deposit into your BECU Checking account
• You must continue to meet the qualifications to remain eligible for Member Advantage benefits

Basically as long as you use paperless statements and either have direct deposit or use bill pay, then you will be eligible for the enhanced account. Like any account, rates are subject to change and can have an affect on any stated earnings here. To see the current requirements on the official BECU site, click here.

In a way to raise deposits, credit unions and banks have started coming up with clever ways to get people to bring more deposits to them. The majority of these plans come in by way of offering higher rates in turn for some sort of favor on your part.

This is how the typical deal looks.

The institution will advertise an abnormally high rate given our current market conditions. This typically runs somewhere between 5% - 8%. There are typically a few catches though.

• The high rate is usually paid on only a set amount, like the first $1000 for example
• Many require you to have direct deposit through them
• Most require that you are signed up for some sort of online banking feature (usually eStatements, or logging on a certain number of times each month).
• Some require that you do a certain number of debit transactions each month.
• Other interesting rules exist as well.

If you are willing to follow the rules that they set forth, you can find yourself earning a decent interest rate, especially given current market rates. Over the next few weeks I am going to review some of the major promotions that are occurring in Washington State.  I might branch out to other states as well if I find something interesting. I am planning on disclosing the exact details of the promotion, like what you need to do to qualify. I will also state what type of person might be interested in these programs. Another thing that I will disclose is the amount of additional income that you will earn by signing up for this program. This way you can see how much extra you are really earning for all that extra work!

After 5 years of having an account with RBC Dain Rauscher, I have finally closed it out. I realized that at this point in time having a full service broker wasn’t right for me. I first opened the account when I was 18 because I wanted to invest in some stock. The first and only stock transaction I did with them was purchase 20 shares of Microsoft. I was pretty excited when I made the trade, but that soon changed when I found out what the trading commission for it was. It cost about $65 to make the trade. When you factor that out, you find that the stock will have to rise $6-$7 before you make any money. That made me pretty upset, but I didn’t sell because then I would have eaten $130. So I hung onto it ever since.

I got really excited when they paid their one-time $3 dividend. I was mostly excited because the dividend ($3 x 20 = $60) was almost enough to cover my commission to purchase the stock. I never really paid a whole lot of attention to the account because there was just one stock in it. A year or so later I was looking at a statement that came in the mail. When I looked at it I noticed that there was nothing in the cash account. I knew that there should have been at least $60 in there plus a smattering of small dividends plus a bit of interest from the cash account. This was a bit upsetting to say the least. The next day I called in to talk to “my broker.” Of course the broker was not available, so I end up getting passed around from secretary to secretary and finally end up with someone who sounded like they hadn’t worked there too long. I told her what happened and she said that she would look into it and give me a call back.

After about three days of playing phone tag during my lunch I finally found out what had happened. Apparently if you do not have over $100,000 in your account you are charged a $100 annual maintenance fee. When you have only ~$500 in your account that comes out to be a 20% deduction. She did seem excited to tell me though that since I only had ~$70 in cash assets in the account they only charged me that and wrote off the rest. How nice of them.

After this incident I decided to close out my account and transfer it to Fidelity. For some reason I got charged $112.98 for the transfer. I guess that is the closing fees associated with closing out an account. That seems kind of ridiculous for transferring 20 shares of stock. Between the $65 purchase price, the $112.98 close out fee and the $20 sale price, I am going to have to sell Microsoft for $9.90 more than what I bought it for to break even.

I guess there are a few lessons to be learned from this:

1. High priced full service brokers only make sense if you have a ton of money
2. If you are doing all the research to buy and sell stocks, you shouldn’t be paying a premium to do it.
3. Know the fee structure of a full service broker before you get into one. Otherwise the fees will eat you alive.

Overall I think it was a decent learning experience. Buying that first 20 shares is what really got me interested in trading. I don’t think that I would be as active into my trading today if I hadn’t started out this way. Although it may look like a wasted $270, but in the end I learned a lot about how these companies work. If you have a lot of money and just want someone to do all the work for you, a full service broker may be right for you. If you are just starting out and don’t mind doing a bit of research, then a low priced broker like Fidelity, Scottrade or Schwab would likely be the better option.

I have noticed an interesting trend going on as CD rates continue to drop. At my institution we don’t change rates all that often. All in all we change them maybe 2-3 times a months. Other places around town will change them on almost a daily basis. After people have seen our rate stay the same for a while they become slightly shocked when rates drop. They tend to comment, “wow your rates sure have dropped,” or “your rates sure are a lot lower than other places.” Then, about two weeks later our rates are still at the same spot. When that same person comes in they tend to get super excited about how high our rates are. Interesting because we hadn’t changed them since the last time. I guess the best thing to take out of this is that savings rates are all in relation to something else. You could be paying 7.5% interest, but if you are the lowest guy in town then people will think your rate is low. Alternatively if you are paying 3% and you are the highest in town, people will get all excited about how high the rate is.

Anyway, I wasn’t really trying to go anywhere too far with this. I just thought that I would point out an interesting pattern that I have been observing. Also, even with rates this low there are still a lot of people opening CD’s. This is fairly surprising to me. To their credit they have all been fairly short term of about 18 months or less.

Another interesting observation is refinances. About four months ago we didn’t have enough open time slots to do refinances. Now with rates even lower than they were then the amount of people inquiring about refinancing has completely disappeared. Our borrowing rates must be a lot higher than other places around town. I guess everyone could have already refinanced as well.

I have decided that I am going to open a savings account at a new financial institution. There a few reasons that I am going to do this. The first reason is that my current financial institution is too far away for me to use on a consistent basis. It doesn’t make a whole lot of sense for me to drive the 21 miles round trip to make a deposit there. That’s about a 40 minute trip to the bank and back. This bank is directly north of Seattle, and I hardly ever travel north of the city. This makes it especially inconvenient because I have to make a special trip to the bank just to take care of my business. With gas as expensive as it is, it is almost worth taking a hit on the ATM fees just to avoid the trip.

Instead of take the hit on the ATM fees, I figured that I would just open a regular savings account with ATM access at an institution that is located down town. This would help me in my new savings strategy. My new savings strategy is cash only. The plan is to transfer somewhere between $100-$150 a week from my current checking account to this new one. At the end of the week I would put back any cash that I didn’t use and then take out an additional $100-$150 for the next week.

I went downtown today to look at a few different institutions. The one that I was thinking about going with, Washington Federal Savings, did not have an ATM outside their building, so that pretty much defeated the purpose of joining them. Next, I went to Evergreen Bank, but they require you to have a $300 minimum balance in their savings in order to avoid the $8 fee. That didn’t sound like much fun to me, so I decided not to sign up for either one.

So I didn’t accomplish my mission, but here comes the ironic part. When I got home today I had my monthly statement waiting for me from my institution. When I opened it up there was a flyer inside of it. I assumed it was your typical refinance your loan flyer. When I took a closer look I found that it was an advertisement for a service called MoneyPass. MoneyPass is an ATM service that many banks have begun to use in order to expand their ATM network. The best thing about MoneyPass is that it is FREE! In downtown Seattle, the banks that are a part of this network are US Bank, Watermark Credit Union, and Northern Trust. Based on punching in a few random zip codes around the area, it seems like US Bank is the only major bank that uses the MoneyPass network, and the rest are small institutions.

This is the first time that I have heard of MoneyPass and if it becomes as popular as I think it will, I imagine people will start to see it around a little more often. It is a great idea and a no brainer for people who have been paying $2-$3 per transaction. According to the MoneyPass website, these are the main benefits to their service:

• No surcharge at ATMs that participate in MoneyPass
• Access to thousands of ATMs across the nation
• Convenient, accessible locations that include bank and credit union branches, convenience stores, grocery stores, restaurants, discount retailers and many more