[Chuckit]

Originally Posted by Railroader 

You really have no idea how you're losing money?!?!

Uh…how do you lose money just by having a checking account with no fees? I'm not seeing it either. It seems like it wouldn't lose me money the same way not buying soda every day doesn't lose me money.

[Strix]

Originally Posted by Chuckit 

Uh…how do you lose money just by having a checking account with no fees? I'm not seeing it either. It seems like it wouldn't lose me money the same way not buying soda every day doesn't lose me money.

No banking is "free", it's just a case of whether you pay up front or not. For example, in the UK, the HSBC offer a free account simply called "Bank Account" for which you get free internet banking, telephone banking, and access to the branches (whoopie). However you only get 0.1% AER on credit balances.

Upgrade to the "Bank Account Plus" for £12.95 per month and suddenly you get worldwide family insurance, security protection, and a 2.5% AER on credit balances, etcx

Essentially you need to "speculate to accumulate" and if you have enough money to warrant £12.95 per month on the assumption that 2.5% interest will at least offset that charge, then that will be for you.

So basically you "pay" for "free" banking by having an exceptionally poor interest rate.....

[Oisín]

Originally Posted by Strix

So basically you "pay" for "free" banking by having an exceptionally poor interest rate.....

But that’s still not the same as actually losing money. If you don’t have enough money in your account to warrant the extra £12.95 per month, you’d be losing money by going for that option, instead, since you’d be paying more for the account than your interests pay you. Sure, you only gain 0.1 per cent AER, but 0.1 per cent gained is still 0.1 per cent gained, not losing money.

It’s like saying you’re losing money if you work as a waitress. Sure, compared to an architect, you’re making less money per hour worked; but if you don’t qualify to be an architect, the point is moot. Similarly, you have to actually have the premises to have an account that gives you these benefits in order to be losing money by not having one.

(Also, my bank account is free, and I have a 1.75 per cent AER, which I find quite satisfactory)

[Strix]

Free banking would imply that there are no charges, whether transparant or not. The fact that one account pays 0.1% whilst another pays 2.5% indicates that the bank is charging the customer via an interest rate penalty, ergo the account is not "free" (albeit you still get 0.1% which is better than nothing (almost)).

[Oisín]

I’m no economist, but I’d say that the default rate would have to be the lowest, and everything above is an extra service rendered to those who pay a higher fee, rather than saying that the best deal possible is the default, and everything below that is hidden charges for those not willing to pay top premium. If you book into a hotel, you can’t say that the presidential suite is the standard of that hotel’s rooms, and all the other rooms just come with hidden ‘charges’ for those not willing to pay full premium.

[moonmonkey]

welcome to 10 years ago!

[Strix]

One day no doubt I'll walk into a bank and hand over a million pounds and ask to open a free bank account. "yes sir, of course sir" they will say, "but for £12 a month we can give you a higher interest rate, sir". I will then do one of two things:

"I'm investing with you a million pounds, and you want to charge me for the privelage??? Not only will you earn serious profits from the investments you'll make with my money, but you'll also be earning more money off me. Baahhh, I'd rather buy a new mattress."

or

"I've got a million pounds, sure I'll pay that, its extremely minute pocket change for me....."

Of course neither scenario will become true

[turtle777]

Originally Posted by Railroader 

You really have no idea how you're losing money?!?!

Yes, I'm that dumb.

And now, since you are soooo smart, please tell me. Be specific.

Otherwise, people might think you are full of sh!t.

-t

[turtle777]

Originally Posted by Strix 

Free banking would imply that there are no charges, whether transparant or not. The fact that one account pays 0.1% whilst another pays 2.5% indicates that the bank is charging the customer via an interest rate penalty, ergo the account is not "free" (albeit you still get 0.1% which is better than nothing (almost)).

This is crap, you are comparing Apples to Oranges.

If my Checking account pays 1%, you can not say I get ripped of because someone's Money Markety funnd pays 4%.

You have to compare Checking to Checking. My USAA Checking acount pays a small APR. It's not a lot, but more than *ANY* other FREE checking account I know of.

-t

[turtle777]

Originally Posted by Strix 

One day no doubt I'll walk into a bank and hand over a million pounds and ask to open a free bank account.

Are you really that dense ?

We are talking about Checking accounts. Who in his right mind keeps his savings there ?



-t

[Strix]

Must be dense, as currently I don't have a million pounds.

Anyway, what's this argument about?

[Dakarʒ]

Originally Posted by Chuckit 

Uh…how do you lose money just by having a checking account with no fees? I'm not seeing it either. It seems like it wouldn't lose me money the same way not buying soda every day doesn't lose me money.

Obviously you're losing the enjoyment of that crisp, refreshing taste. *takes a swig* Ahhhhhhh...

[turtle777]

Originally Posted by Strix 

Anyway, what's this argument about?

The argument was about your argument. It didn't make sense.

-t

[Strix]

Originally Posted by turtle777 

The argument was about your argument. It didn't make sense.

-t

Excellent, then I've achieved my objective.

Basically nothing in life is free, so when a Bank says it's free, it's not, although you don't realise that it's not, because you think it's free, which is what the Bank wants you to think, because then you tell everyone how fab this Bank is with free banking (which it's not) as opposed to one which charges, which it does, even the free one which claims it doesn't.

I think that summarises something.

[turtle777]

Originally Posted by Strix 

Excellent, then I've achieved my objective.

Basically nothing in life is free, so when a Bank says it's free, it's not, although you don't realise that it's not, because you think it's free, which is what the Bank wants you to think, because then you tell everyone how fab this Bank is with free banking (which it's not) as opposed to one which charges, which it does, even the free one which claims it doesn't.

I think that summarises something.

You are completely missing the point of the previous discussion and went of on a rabbit trail.

We were talking about (checking) accounts and comparing how some of them are "free" versus others that charge for various services.

Nobody said they were "absolutely" free, but they are "more" free than those accounts that charge you extra fees, put limitations on its use (e.g. minimum balance) or charge you for ATM usage.

My example was USAA as an account that doesn't have any *obvious* hidden charges, and I argued that they can offer that good deal because their cost structure is better since they offer fulls service banking w/o any physical branches.

-t

[Strix]

I'm not sure one thing can be more "free" than another free product, but I do understand where your coming from.

The bank I use in the UK is, lets say, free at the point of use, and I avoid charges where-ever possible (eg. some ATM's will charge you, so just have to avoid them).

The UK bank sector is apparantly highly competitive, hence varying (though competitive) interest rates on the basic accounts, however to actually change bank is a pain in the posterior.

There is a discussion in the UK at the moment regarding bank charges (see following as an example):

BBC NEWS | Business | 'Unjust' bank charges criticised

One of the banks arguments regarding penalty charges is that if penalties were either reduced, or scrapped, then free banking would cease, and the introduction of monthly fees would become wide spread.

[andi*pandi]

my bank doesn't do interest for the free checking accounts, unless you have a $5k minimum balance or something. And yes, I work a j-o-b so I don't qualify for that. I'm happy my bank offers free online banking, no atm fees, no check fees.

rr, not everyone can walk into a bank and have the manager rush up obsequiously offering coffee and begging for business. Obviously you have enough money that they value your business immensely. It's nice for you, but no need to be condescending to the rest of us.

[Railroader]

Originally Posted by andi*pandi 

rr, not everyone can walk into a bank and have the manager rush up obsequiously offering coffee and begging for business. Obviously you have enough money that they value your business immensely. It's nice for you, but no need to be condescending to the rest of us.

Yes. They. Can.

If I can do it, anyone can.

[turtle777]

Originally Posted by Railroader 

You really have no idea how you're losing money?!?! Very telling.

Now go back to work. You probably need the money. I'll just rest and relax here retired at 36 years old.

Originally Posted by turtle777 

Yes, I'm that dumb.
And now, since you are soooo smart, please tell me. Be specific.
Otherwise, people might think you are full of sh!t.

We are still waiting for your awesome arguments so we can admire your greatness.

Unless, you really are full of sh!t, which remains a very likely possibility.

-t

[Cold Warrior]

No kidding. RR you are such a poser.

[SpaceMonkey]

Originally Posted by turtle777 

We are still waiting for your awesome arguments so we can admire your greatness.

Unless, you really are full of sh!t, which remains a very likely possibility.

-t

I believe that Railroader is probably referring to inflation. But, as has already been said, the best, lowest-cost inflation-beating investments are not normally found in banks, anyway.

[Chuckit]

Originally Posted by Railroader 

Yes. They. Can.

If I can do it, anyone can.

Yes, anyone who hit it lucky in the stock market and is now independently wealthy, I suppose.

[Railroader]

Originally Posted by turtle777 

We are still waiting for your awesome arguments so we can admire your greatness.

Unless, you really are full of sh!t, which remains a very likely possibility.

-t

With such kind words.... nah.

[Railroader]

Originally Posted by SpaceMonkey 

I believe that Railroader is probably referring to inflation. But, as has already been said, the best, lowest-cost inflation-beating investments are not normally found in banks, anyway.

Mostly my point. If your bank does not offer inflation-beating checking accounts, you need to switch banks.

[Railroader]

Originally Posted by Chuckit 

Yes, anyone who hit it lucky in the stock market and is now independently wealthy, I suppose.

I have not been "lucky" in the stock market. I invest mostly conservatively. My secret is to not buy every little thing my heart wants. And working smartly and very hard.

[Railroader]

Originally Posted by Cold Warrior 

No kidding. RR you are such a poser.

Ha ha...

[turtle777]

Originally Posted by Railroader 

Mostly my point. If your bank does not offer inflation-beating checking accounts, you need to switch banks.

Inflation beating checking accounts for free ?

Where ? Links, please. Facts on the table.

-t

[Chuckit]

Originally Posted by Railroader 

I have not been "lucky" in the stock market. I invest mostly conservatively. My secret is to not buy every little thing my heart wants. And working smartly and very hard.

Then you have been paid better than most people, because conservative investing (again, unless you get lucky) will not get you much over inflation and even with extremely conservative spending, it's still pretty hard to save up, say, $60,000 per year. Either way, I don't believe it's a typical case.

[Chuckit]

Originally Posted by turtle777 

Inflation beating checking accounts for free ?

Where ? Links, please. Facts on the table.

Freedom Checking

[turtle777]

Originally Posted by Chuckit 

Then you have been paid better than most people, because conservative investing (again, unless you get lucky) will not get you much over inflation and even with extremely conservative spending, it's still pretty hard to save up $70,000 per year.

The only way how he could retire early was because he got paid off at a GM RIF (reduction in force). He's gonna enjoy his "retirement" for two years, then run out of money. After that, he'll find how the real world works. The same job he did before will pay less than 50% at non-GM and non-Ford.
Then he'll get a reality check and hopefully get off his high horse.

-t

[turtle777]

Originally Posted by Chuckit 

Freedom Checking

Not bad, but not exactly free.

* ATM fees you pay reimbursed up to $7 per month
* No monthly service charge with a $1,000 average daily balance, otherwise $4 per month
* Initial check order provided free -- BofI 50 Pack

So, if you have less than $ 1000 in it at all times, you pay for the account. Again, comes down to the time value of money.

3.4% APY is really good for checking, but as an investment option, it's limited. If I compare $ 10,000 @ 3.4% with $ 10,000 at a savings account with APR of 5.1% or more (e.g. bankrate.com), this account costs me

$ 51 (5.1% of $ 10,000) per year
$ 34 (3.4% of $ 10,000) per year

COST: $ 17.

Not a lot, I give you that, but not FREE !
And why leave such big amounts in a checking account anyways.

I'm still waiting to find out how I'm being ripped of with my absolutely free checking account that I never have more that $ 500 in. Rest goes to Money Market or Savings or Mutual funds.

-t

[Chuckit]

Originally Posted by turtle777 

And why leave such big amounts in a checking account anyways.

I don't think $1000 is really an unreasonable amount to have in your checking account. I usually try to keep a couple thousand in there so it doesn't get too low even if I decide to buy a Playstation 3 or something.

[Railroader]

Originally Posted by turtle777 

The only way how he could retire early was because he got paid off at a GM RIF (reduction in force). He's gonna enjoy his "retirement" for two years, then run out of money. After that, he'll find how the real world works. The same job he did before will pay less than 50% at non-GM and non-Ford.
Then he'll get a reality check and hopefully get off his high horse.

-t

Nah, I was working for "icing on the cake" when I was working for GM. I already had a retirement mentality.

Actually, I do have a "job". And just to let you know, my salary is around $7,000 per year and I put 100% of it in the bank. I have already been offered to do the same work I performed at GM, for 50% more than what I was making at GM.

Please, dream up another scenario. They are entertaining.

The "real world"... ha ha...

Get back to work.

[Railroader]

Originally Posted by turtle777 

Inflation beating checking accounts for free ?

Where ? Links, please. Facts on the table.

-t

Nah. You are a bitter little man and don't deserve the help.

[turtle777]

Originally Posted by Chuckit 

I don't think $1000 is really an unreasonable amount to have in your checking account. I usually try to keep a couple thousand in there so it doesn't get too low even if I decide to buy a Playstation 3 or something.

But why keep it in a Checking account ?

Electronif funds transfer between checking and savings takes 2-3 days. Well, IMO, you can do that, but I keep excess money > $ 500 in a different account. Since I pay with a Credit Card to collect points, I have a month longer for the money to sit in my Savings. :-) But according to RR, this is just plain dumb.

-t

[Railroader]

Originally Posted by Chuckit 

Then you have been paid better than most people, because conservative investing (again, unless you get lucky) will not get you much over inflation and even with extremely conservative spending, it's still pretty hard to save up, say, $60,000 per year. Either way, I don't believe it's a typical case.

No.

I worked very hard, paid cash for EVERYTHING, and saved saved saved. Paid cash for my house.

It's certainly not typical. People don't have very much self control today when it comes to spending. I am certainly out of the ordinary. It's a shame too. I love my life.

[Railroader]

Originally Posted by turtle777 

But why keep it in a Checking account ?

Electronif funds transfer between checking and savings takes 2-3 days. Well, IMO, you can do that, but I keep excess money > $ 500 in a different account. Since I pay with a Credit Card to collect points, I have a month longer for the money to sit in my Savings. :-) But according to RR, this is just plain dumb.

-t

How do you come up with this BS/FUD?!?! I'd like a quote where I said that. Nah... don't waste your time, you are quite transparent.

[turtle777]

Originally Posted by Railroader 

Nah. You are a bitter little man and don't deserve the help.

I knew it, you are full of sh!t.

Ah well, no shock.

-t

[Railroader]

Originally Posted by turtle777 

I knew it, you are full of sh!t.

Ah well, no shock.

-t

Says the person who makes up quotes and stories... no surprise.

Get back to work for da man you!

[turtle777]

Originally Posted by Railroader 

How do you come up with this BS/FUD?!?! I'd like a quote where I said that. Nah... don't waste your time, you are quite transparent.

I didn't come up with this, it came from YOU.

Originally Posted by Railroader 

But the best advice I can give you is: pay cash for everything. Use a credit card ONLY for things you have to like booking hotel rooms or car rentals. /creditadvice]

Originally Posted by Railroader 

What's worth more, "points" or money?
[...]
When you can pay cash for evreything you'll see what kind of freedom you can have. Until then you are blinded by the myth.

Do I need to find more ?

-t

[Railroader]

Originally Posted by turtle777 

I didn't come up with this, it came from YOU.

Do I need to find more ?

-t

I meant the points crap.

But hey, I'm gald you are at least absorbing a little of my wisdom elsewhere.

[Chuckit]

Originally Posted by Railroader 

No.

I worked very hard, paid cash for EVERYTHING, and saved saved saved. Paid cash for my house.

It's certainly not typical. People don't have very much self control today when it comes to spending. I am certainly out of the ordinary. It's a shame too. I love my life.

I guess I'll take your word for it, but I'm having a lot of trouble making the numbers mesh in my head unless you're single and living with your parents. As an example:

Let's say you make $70,000 per year. I think that's a bit more than average, but not extravagantly so. You sustain your family on $20,000 per year (a tight budget, but I'll go with it), saving $50,000 every year. At the end of 15 years, you now have $750,000 and you retire. But you also bought a house, so you actually have more like $450,000. You now have a budget of around $7,500 for the next 60 years — oops!

What am I missing that makes a scenario where you don't make a lot of money and don't have very lucrative investments work out so that you can have a family and retire at 35?

[Railroader]

Originally Posted by Chuckit 

I guess I'll take your word for it, but I'm having a lot of trouble making the numbers mesh in my head unless you're single and living with your parents. As an example:

Let's say you make $70,000 per year. I think that's a bit more than average, but not extravagantly so. You sustain your family on $20,000 per year (a tight budget, but I'll go with it), saving $50,000 every year. At the end of 15 years, you now have $750,000 and you retire. But you also bought a house, so you actually have more like $450,000. You now have a budget of around $7,500 for the next 60 years — oops!

What am I missing that makes a scenario where you don't make a lot of money and don't have very lucrative investments work out so that you can have a family and retire at 35?

You have a lot of assumptions in there. Let's address a few.

I am married (10 years in a week actually). Had kids at 32 years old. Wife woked until just recently.

We both were making $80k+ before we retired.

Why in the world will I buy a $300,000 house?!?

I started working very young. I saved every penny.

I bought a house when I was young. I paid cash. I did a lot of work on it and sold at a very nice profit.

You want to know my budget?

$2000/yr. property taxes. That's ~$170/month.
$150/month phone, internet, TV.
$100/month insurance.
$180/month utilities.
$500 food & clothes
$200 to splurge with.

That's only $1300/month I have to come up with. That's it. Sometimes I spend a little more, sometimes less... but that's the gist of it.

I make over $3500/month on investments. After my tithe and my budget, the rest goes in the bank.

BTW: In your scenario why is my yealry budget only $7500?!?! Do I bank with a coffeee can in the back yard and not invest?!?!

[turtle777]

Originally Posted by Railroader 

You really have no idea how you're losing money?!?! Very telling.

Originally Posted by Cold Warrior 

OK smart guy, tell us the sweet deals and rates you get. Make us jealous.

Originally Posted by turtle777 

And now, since you are soooo smart, please tell me. Be specific.

Originally Posted by turtle777 

We are still waiting for your awesome arguments so we can admire your greatness.

Originally Posted by turtle777 

Inflation beating checking accounts for free ?
Where ? Links, please. Facts on the table.

Originally Posted by Railroader 

Nah. You are a bitter little man and don't deserve the help.

Is that all you got ?
So you are making all those claims and then bring no single fact ?

I guess we have to accept that you bring up contention just for the argument's sake.

Why would I believe *ANYTHING* you say ?

-t

[andi*pandi]

I had another post typed out but the database ate it.

gist: Regional differences in salaries/standards of living apply. Yes, I know that my money would work harder for me in an interest bearing account, but I simply don't have enough extra cash to maintain such an account.

$80K is not enough to retire on around here. My spouse and I make more than that, and while we're not poor, we don't have near enough savings to retire! Mortgage alone is over $2k/month. Did we buy a huge mcMansion above our means? No. we bought a modest little cape. You can't find a house around here for <$300k. Moving to an area with a lower cost of living would result in a correspondingly lower salary.

[Dakarʒ]

I'm on the other side of that fence. Anywhere else I move to I'll have a higher salary, but my cost of living will increase much more.

[Railroader]

Originally Posted by turtle777 

Is that all you got ?
So you are making all those claims and then bring no single fact ?

I guess we have to accept that you bring up contention just for the argument's sake.

Why would I believe *ANYTHING* you say ?

-t

Your quite bitter lately. What has happened in your life?

[sek929]

Originally Posted by Railroader 

Why in the world will I buy a $300,000 house?!?

Because not everyone lives in eastcuttybumf**k Michigan.

300 grand will get you a saggy house on a 1/2 acre of land around here.

[Railroader]

Originally Posted by sek929 

Because not everyone lives in eastcuttybumf**k Michigan.

300 grand will get you a saggy house on a 1/2 acre of land around here.

Ha ha... you're ignorance is showing sek.

You should see what $300k will buy you here in Indianapolis! A mansion practically. Actually, just about any where in the US, except the coastal areas, you can buy quite a nice house with less than $160k

Here's some simple advice: If you can't afford to live where you are living... move.

What's wrong with living in a saggy house on 1/2 acre of land anyway?

[Chuckit]

I said $300,000 because that's what a shack costs in this part of the country. The average price of a house, if the open house listings are any indication, is $750,000.