Money and Finance

[topher]

Stocks, Bonds, CDs and Money Management. Discuss here.

[chonies]

Yay! I'll start!

Any advice on rebuilding credit? What about preparing for dealing with a huge pile of student loans?

Also, I recently won a scholarship that I want to save for travelling (to Asia next year) and I don't know if I should just put it in savings, or use it to open a money market account or get a CD.

Are there any free or low-cost financial planning services that are recommended for people who have no money and are just interested in starting out?

[topher]

You can get nice safe returns about 3-4% or better with MM account and CDs. With CDs, rememeber that one cannot touch the money during that timeframe w/o penalty.


The best way to rebuild credit is to pay off your debt and not miss payments.

Personally, I HATE debt in most cases. When people ask me for advice, I always tell them to pay down your debt no matter what. I knew a couple who had $50k in a savings account with $20k in credit card debt. I about blew my head off after hearing that.

[chonies]

Are student loans "acceptable" debt? I would prefer to be debt-free, and have made paying off consumer debt a priority, but there is no way I would have gone to grad school without loans. I was working a crappy retail job and would not have been able to pay for anything; also, my previously prestigious internships had been five or more years in the past and all the resume tooling I was doing wasn't fooling anyone.

Wow, that was whiny. I suppose what I mean to ask is about student loans, and if all debt is debt, or if there is a difference between consumer debt and school-debt, besides the interest rate?

[plush]

I know the following article is beyond the topic, but I just had so much fun reading it and I'll post it anyway. I apologize if I'm breaking any rules but I can guarantee that whoever works in the finance/banking industry like I do, will enjoy it a lot. Others may as well.

Banks vs Musicians

By Mark Gilbert
May 12 (Bloomberg) -- Investment banks have personalities that are reflected in how they go about their business and how their peers view them. Bands express their character traits through the music they make and the company they keep. What happens when you match banks with musicians?
1) Goldman Sachs = The Rolling Stones
Goldman Sachs Group Inc. occupies an odd position in the investment-banking pantheon. The world's No. 1 securities firm by market value is unloved by its peers and universally regarded as arrogant. Its prodigious appetite for hard work and its unrivaled profit-generating abilities arouse jealousy and admiration in
equal measure.
Goldman could almost be U2. While its followers are devoted, it's still not quite cool to admit to loving the Irish band. The rock 'n' roll establishment struggles to cherish a band whose lead singer, Bono, rubs shoulders with presidents and popes as he campaigns against global poverty.
U2, though, would never embrace Goldman's aim of being ``long-term greedy.'' So, step forward the Rolling Stones; no one ever accused Mick Jagger and Keith Richards of paying anything less than full attention to the bottom line.
2) Citigroup = Ozzy Osbourne
In ``Liar's Poker,'' Michael Lewis wrote that the key to being a successful trader at Salomon Brothers in the 1980s was a willingness to bite the ass off a bear every morning. Ozzy Osbourne would have fitted right in; around the same time he is reputed to have bitten the head off a dead bat thrown on stage after assuming it was a rubber toy.
Salomon is now part of Citigroup Inc.'s empire. Ozzy is now more famous for parading his family on a reality television show broadcast by MTV. Both Citigroup and Ozzy are growing old disgracefully; Citigroup's many and varied brushes with the authorities around the world make the bank worthy of an alliance with the former Black Sabbath singer.
3) Deutsche Bank = Fleetwood Mac
A lazy comparison would equate Deutsche Bank AG, Germany's only global bank, with Kraftwerk, Germany's only global band. Reliant on technology for success, secretive, Teutonic and somewhat emotionless, they have a lot in common.
A different list of attributes, though, suggests an alternative. Immensely profitable? Check. Years of infighting and not communicating with one another? Check. Badly in need of a style makeover? Check. It's Fleetwood Mac.
4) JPMorgan = Radiohead
JPMorgan Chase & Co. executives used to boast about the bank's roomful of 250 Ph.D.s, designing exotic derivatives strategies and proprietary mathematical models to tickle the wackier wedges of the world's financial markets for profit. Too clever by half, and needing another big hit to remain relevant? It could almost be REM. Radiohead edges it.
5) Barclays Capital = Oasis
The capital-markets division of Barclays Plc could be the Red Hot Chili Peppers; chaotic in the 1990s, gained some focus in the early years of this decade, now looking a bit bloated and self-indulgent. Or Barclays Capital could be Keane, since both rose without a trace and are seemingly missing a key component,
with Barclays surviving without an equity business and Keane bashing out pop music without the aid of guitars.
Oasis is a better fit. Snarling insolence failed to break the U.S. market and, while past its peak, the band is still capable of flashes of brilliance. Moreover, it probably has twice as many employees as needed. I just can't work out which Gallagher brother, Noel or Liam, is Barclays Plc President Bob Diamond.
6) Morgan Stanley = Coldplay
Deadly earnest. Blue-blooded. Well-heeled. Regularly at the top of the charts, though even fans have the nagging sense they might just be going through the motions. Morgan Stanley and Coldplay are made for each other.
7) Merrill Lynch = Madonna
Both Merrill Lynch & Co. and Madonna peaked in the 1980s and have been irrelevant since the 1990s, notwithstanding umpteen attempts at reinvention. A willingness to jump on any passing bandwagon keeps David Bowie fresh; it leaves both Merrill and Madonna looking a bit like Whitney (Houston) dressed as Britney (Spears).
8) HSBC = any boyband
Guns N' Roses has been poised to release ``Chinese Democracy'' for a decade. While some tracks have been performed live or been leaked in rough form, the album itself still isn't available. HSBC Holdings Plc has been poised to use its platform in Asian investment banking as the springboard to become a fully
fledged global investment bank for at least as long.
HSBC, though, could be any manufactured boyband. The true performers earn peanuts, while the management reaps the financial rewards. And, if there is a genius Robbie Williams lurking in the line-up, there's too much dead wood for the talent to shine through.
9) UBS = Phil Collins
The bank and the former Genesis drummer/singer are both rich, both based in Switzerland, and no one with any sense gives a hoot about either. Medallion men with year-round tans and chunky gold watches bank with UBS AG, and rate ``In the Air Tonight'' as their favorite track of all time.
10) Commerzbank = David Hasselhoff
Both Commerzbank AG and David Hasselhoff, the singing star of Knight Rider and Baywatch, are huge in Germany. Scientists have failed to explain why.

[india7]

How long does it take to rebuild credit after filing for personal bankruptcy? I've been very good about never being late with my payments, I have one credit card I was able to keep, and it gets paid on time always. I have a good job, I'm not overdrawn in my bank account, etc. It's been over three years now since I filed. Recently, when I opened my new bank account in February, the woman checked my credit score and said it was actually pretty good - she said anything over 600 (I think) was considered good, and mine was around 667. But every so often, I'll get turned down on something and I know it has to do with the bankruptcy. For example, when I moved into my new apartment, my renter's insurance is much higher than in the old place. I think it has to do with that, although the agent at Allstate said he wasn't sure.

Any advice?

[topher]

India if your score is 600+ with a bankruptcy it sounds like you built some back. IIRC, I think it might be 7 years for the bankruptxy to come off you credit score.

Plush, nice to finally see somone else in my field.

This killed me. Do you have a link?

Both Commerzbank AG and David Hasselhoff, the singing star of Knight Rider and Baywatch, are huge in Germany. Scientists have failed to explain why.

[Auroranorth]

Chonies, moving this over from the feminism thread, my personal favorites in the advice line are:

1. Joan Perry's A Girl Needs Cash. The title's cutesy but the advice is solid. She explains things well and doesn't dumb them down. This is aimed at women, so she considers things like the Prince Charming Syndrome (aka "a man is not a plan.")

2. MSN's Money section, especially the planning one.

3. Andrew Tobias's The Only Investment Guide You'll Ever Need. If you don't know a mutual fund from a money market account, start here. He leads you through the maze carefully and clearly. Don't look here for risky investments or day trading advice- he's against both. Also, don't buy a boat.

4. Dara Dugay's Please Send Money. A Financial Survival Guide for Young Adults on Their Own. This covers all those lovely little things like budgeting, credit, money and relationships, etc. It's a good basic workbook. When I started out temping after library school, I used this to design a budget and was able to support myself until I found a permanent job nine months later.

5. Michelle Singletary's Your Money and Your Man : How You and Prince Charming Can Spend Well and Live Rich. This may be useful for the couples issues you mentioned.


I hope these help- if you have library job-related questions, please PM me. *offers fellow librarian virtual handshake*

[india7]

topher said:

India if your score is 600+ with a bankruptcy it sounds like you built some back. IIRC, I think it might be 7 years for the bankruptxy to come off you credit score.

Thanks, Topher. I keep hearing wildly varying time lengths, from three years to seven to 12, and I've never been sure. By the way, the woman at my bank who said my credit score was good? She asked, when I opened my checking and savings, if I also wanted a credit card. I declined, and explained about the bankruptcy. I told her that not only did I not want to get in over my head again, but that I probably wouldn't be approved. I said that between my debit card and my actual one credit card, I should be okay. So while while she was running all my info through and told me about my credit score, she then said, "Oh, and by the way - you've been approved for the credit card if you still want it." I declined again, but it made me feel a little better.

And just NOW, for kicks and grins, I attempted to apply online for an American Express card (my card I was able to keep was a Chase Visa, and my debit card is Bank of America with a Visa logo). Mostly because I knew I'd get turned down, but wanted to see what would happen anyway. And sure enough - turned down. Interesting - although, I tried that for kicks and grins about a year ago, and my ex (boyfriend at the time) pointed out that Amex isn't a good one to try for because it's one of the hardest cards to get. Actually, I did have an Amex before the bankruptcy, so it may have to do with that. "Heeeey, we remember you!" I don't actually want anymore credit cards - that was just a test. But I would like good credit again!

[dwanollah]

Are student loans "acceptable" debt?

Well, I think so! ;D We actually found student loans quite helpful when we were first starting out, because we could get them at a much lower interest rate then anything else, and defer payments while I was in school, so we've stayed otherwise-debt-free by paying off credit cards and whatnot in the beginning with my student loans.

We also were pretty fucking miserly for quite a few years, and didn't buy a bunch of shit on credit.

In a related note, I've just paid off ALL of my student loans this month, except for my current semester. We are now officially debt-free! Gawddamn, that's a great feeling, after I spent the first 20-odd years of my life under the umbrella of debt. My mom sucks with money. So do I, actually.

p.s. Buy real estate!