I was playing around with this new site Wordle and putting in the sites of some other personal finance blogs

They make the cloud based on your RSS feed so it takes whatever you’ve been writing about lately, not a entire site survey (with over 2,200 articles, that would take forever), so it looks like I’ve been writing a lot about emergency funds, investing in index funds, and stealing Obama’s thunder and the use of the word ‘can.’ Yes, I can.

But this is no fun if I just do my site right? I had to see what others would look like so I played with it some more and made clouds for The Simple Dollar (there it is to the right, probably my favorite of the bunch I made and that thumbnail doesn’t do it justice), The Digerati Life, Five Cent Nickel, Get Rich Slowly, Consumerism Commentary, CNN Money, and a few more.

If you want to see the fruits of my minor diversionary labor, check out my gallery on Wordle.

Sometime in the last month or so, (or longer, I have no idea honestly) a new high yield savings bank appeared with little fanfare or press: Dollar Savings Direct. It’s a division of Emigrant Bank, FDIC Certificate #12054, which is the same parent company of Emigrant Direct. On the face of it, it appears there’s little difference besides interest rate and minimums. Dollar Savings Direct has a higher APY at 3.75% but has a minimum balance of $1,000 but no fees (if your balance falls under the minimum, you earn only 1%). If you go to their respective homepages, they’re designed with nearly the same elements (layout is the same except on Dollar Savings you have a picture of Benjamin Franklin versus a patriotic top hat, the buttons are basically the same, color-schemes, etc).

What’s the deal? Well, I called Dollar Savings Direct and chatted with a very nice CSR who explained the whole story. She confirmed that there was no difference other than APY and minimums, that was interesting. She also explained that Dollar Savings Direct was merely Banco Fortuna, Emigrant Bank’s foray into the Spanish-speaking banking market, rebranded in English. I suppose Emigrant’s foray wasn’t as productive as they had hoped. If you visit the Banco Fortuna homepage, it redirects you to Dollar Savings Direct, confirming the CSR’s explanation.

So, from someone who didn’t know about Banco Fortuna (or that it was going away), it appeared as though Emigrant Bank was trying to get more deposits without having to pay their existing Emigrant Direct customers. It now appears that isn’t the case.

The last question I had for the CSR was whether I could transfer between the two accounts and she said no. They were two separate banks, despite having the same FDIC certificate, so to transfer funds you’d need a checking account intermediary.

If you need a high yield savings account, I’d go with FNBO Direct (3.50% APY w/o the fears of failure). WaMu was one recommendation but they were recently acquired by JPMorgan Chase after they failed.

I don’t see how Emigrant Bank can offer two different rates on essentially the same product for much longer.

I picked up a copy of Quicken last year to help with our family’s personal finances and perhaps assist in the accounting of my fledgling little business. This year, Quicken has released yet another version update, Quicken 2009 is slated for a September 10th release, and offered some handsome discounts for those looking to upgrade or use the software for the first time.

Quicken 2009 New Features

I’ve read people talk about how they hated all these yearly updates because they offered little in upgrades. Well, in scouring the web for more information, I stumbled on this job posting in which Intuit, makers of Quicken, is “planning a major redesign of the product, and we are looking for a senior user interaction designer for 6-9 month.” Who knows what that means though.

There are additional portfolio planning features added, a whole new help system (with screens for each page), as well as adding more banks to its system. Quicken 2009 will now interface with over 6,000 institutions from banks to brokerages to PayPal.

Quicken 2009 Coupons Codes

• Quicken Deluxe 2009 ($59.99 $44.99 - 25% discount)
• Quicken Premier 2009 ($89.99 $71.99 - 20% discount)
• Quicken Home & Business 2009 ($99.99 $79.99 - 20% discount)
• Quicken Home and Inventory Manager ($29.99 $23.99 - 20% discount)
• Quicken Mac ($49.99 $33.99 - 23% discount)
• Quicken Medical Expense Manager ($69.99 $44.79 - 36% discount)
• Quicken Rental Property Manager ($149.99 $119.99 - 20% discount)
• Quicken Online (60 day free trial, then $2.99/month)

If you want to compare the economic policies and plans of Presidential hopefuls John McCain and Barack Obama, CNN Money has a good comparison between the two on a variety of issues from Social Security to Personal Taxes.

Jeremy at Generation X Finance has a very good explanation of why the GAO report of 2/3rds of companies paying zero tax is political hogwash. Besides Jeremy’s good points, famous United States Court of Appeals for the Second Circuit judge Learned Hand once said - “Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one’s taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands.”

SVB tackles the question of saving for college, a question I’m going to put off for a little while.

Nickel’s favorite cashback credit card is the Blue Cash from American Express, a card I don’t have. It seems to have a lot of great features, like a comparison of your cashback performance, and good cashback categories as well.

The Consumerist confirms once again why I love Southwest in publishing it’s top 3 most and least “fee crazy” airlines. Southwest was they’re #1 least fee crazy airline.

Flexo wrote about a study that says sleep makes you smarter.

Have a great long weekend!

This week, in lieu of a Week in Numbers, I give you NBC’s 2008 Beijing Summer Olympics by Numbers.

My favorite numbers of the bunch?

• $25,000 - The amount each Olympic athlete is given by the USOC for a gold medal.
• 44 - The number countries with apparel deals with Nike at the Olympics, there are 204 countries participating in total.
• 0 - How much Michael Phelps will pay to eat pizza at Pizza Hut for the next year (all because he broke Spitz’s single-Games gold medal count record, I had no idea he did that)

My wife and I once discussed getting genetic testing done to figure out whether our kids would be grow up to become NBA superstars and fund our lavish retirement plans. Anyway, with that plan in mind, I originally planned to spend tens of thousands of dollars to get myself tested by a plethora of different genetic testing companies, but Discover Magazine, with their deep pockets and journalistic pull, beat me to the punch and saved me a bunch of money. (whew!)

Boonsri Dickinson was genetically tested by three different firms (Navigenics, 23andMe, and deCODE genetics) and the results were… eh, anticlimactic. What I learned in Dickinson’s article was that genetic testing was at best still an imperfect science. The data we have on the human genome simply isn’t deep enough to give us a clear and accurate picture of even our own future, let alone the future of the children of couples being tested.

One surprising factoid was the importance of race. I had always heard that there was really no genetic difference between any two races, that individual variance was a bigger deal than racial variances. This was in direct conflict with the analysis methodology for interpreting the DNA testing results. Dickinson is half-European and half-Asian… and her 23andMe results would wildly fluctuate based on how she classified her ancestry.

While I can see the merits of genetic testing, it still sounds like it’s an imperfect science because we simply don’t understand it well enough. We often see media stories about how we’ve discovered the gene for this or that and the reality is that it’s just not that simple. I think genetic testing, for now, with its hefty price tag and inaccurate results, is out of any future plans.

How about you? Ever consider it? Too creepy (Gattaca, anyone?)? Too expensive? See no point to it?

(Photo: mknowles)

We’ve reached the last of the deadly sins of personal finance and this one probably caught you off guard, right? All the others were your standard bits of personal finance advice: be sure to budget, have an emergency fund, ensure you’re adequately insured; this deadly sin is of the softer variety. It’s important that, while you’re following the standard personal finance advice, you remember to enjoy life while you’re living it. That’s why the seventh and final deadly sin of personal finance is…

Don’t Enjoy Life

Life, especially the personal finance aspects of your life, is all about balance. Don’t spend more than you earn, but don’t starve yourself of life’s pleasures. You don’t have to spend a lot to enjoy life but you don’t have to starve yourself of all fun in order to save more for a new house or your retirement. While all those goals are important, it’s also important that you enjoy life now so that you don’t burn yourself out.

I had a friend who was extremely diligent about saving money during the week. He’d bring in his lunches, he’d skip out on happy hours after work, and would otherwise live a pretty austere and frugal lifestyle. There’s absolutely nothing wrong with that. However, whenever he would go on vacations with his girlfriends, he’d go all out. As you probably know, anytime you visit a vacation destination, there will be ample opportunities for you to spend a lot of money. If you ask him, he’d tell you that he was saving his money during the week so that he could go crazy on vacations without worrying about how much he spent. If you ask me, I thought his pendulum was just swinging the other way from austere to lavish. I never judge how other people spend their money, that’s their own business, but a small part of me wondered if his “average spend” would be lower if he just enjoyed life a little more on a daily basis (you can go out with friends without spending a lot).

Let’s be honest, you don’t need me to tell you to enjoy life, right?

Finally and hopefully fittingly, as you work those long hours at the office or the shop or while you’re hitting the books at the library, remember also to spend time with your loved ones doing the things that make you happy. Be sure that you’re working to live, rather than living to work. Promotions and more pay are great, but there’s more to life than money and those things are free.

Ben at The Consumerist sent me this article about high yield interest rates in Iceland, after Sedlabanki, the central bank of Iceland, bumped borrowing interest rates to 15.5% to battle inflation. That puts interest rates for regular savings accounts betwee 11.65% and 15.55% - that’s pretty amazing. But I’m not biting.

No FDIC

As IndyMac went into the conservatorship of the FDIC, people lined for hours to withdraw their money. The FDIC gives you $100,000 of coverage… Icelandic insurance covers the first $20,731 and if you want to actually physically run on the bank, you have to haul yourself to Iceland.

How important is this? That depends on how risk averse you are and how comfortable you are sending your money abroad. One of the benefits of the FDIC is that if you put your savings in an insured bank in the US, you have a backstop against the worst of the worst. Even if the bank itself imploded, you knew your money was safe and that’s something we often take for granted. Many people are apprehensive about putting their funds in an online high yield savings account, this is easily ten times riskier because it lacks FDIC insurance. (though all the banks listed in the article are huge, almost “too big to fail” huge :))

Exchange Risk

Not knowing the solvency of banks in Iceland, I think the biggest risk has to do with currency exchange risk. That’s the risk that your money will lose value as the dollar strengthens against the Icelandic Króna. One mitigating factor is that there’s inflation in Iceland, which means they will likely stand pat or increase rate (strengthens the króna against the dollar), but the dollar is coming off historic lows against a lot of other currencies.

Check out the list of top diversified emerging market funds according to Yahoo Finance. The funds that are the top performers over 5 years are not the ones that are top performers over 3 years. None of the top performers of the last year were top formers over the last 3 (Lazard funds appear in the 5 year list though). Emerging markets are volatile in part because of exchange risk and those funds are diversified. You’d be putting all your eggs in the Icelandic bucket.

Is It Worth It?

How much do you really have to save and is it worth opening an account in an international country? If you were to put $20k, the insurance limit, then the difference between a 15% APY and a 3.5% APY (FNBO Direct offers this) is 11.5% or $2,300. After you take 25% off for taxes, you’re left with $1,725 on $20k. $1,725 is a lot… but let’s see what you have to do to open an account abroad.

I went to Kaupthing Edge, the high yield online deposit product of the first bank listed in the Barron’s article, and the United States wasn’t listed. Strike one.

I then went to Glitnir Bank, the second listed bank. After poking around and finding some information on individual banking, I learned that you’d have to go to their Iceland or Norway websites (which aren’t in English) to open a regular account. They have a Save & Save product, which is linked to sustainability efforts, but again you have to go to an Iceland or Norway site. Strike two.

Last one left is SPRON, or the Reykjavík Savings Bank, and they actually have an internet bank link on their homepage… but I can’t figure out how to sign up for an account. Strike three.

I’m out.

Summary

15.55% is sooooo appealing. But with risk comes reward, you never get rewards without putting your neck on the line and there’s a reason why you can get 15.55% in Iceland when you can only get 3.50% here in the United States. If there wasn’t a reason, the big money would’ve already gone to Iceland and depressed the yields on those accounts… it’s simple market economics.

There are also a bunch of reasons I don’t even know about, because I’m not a foreign exchange expert. In fact, the only thing I know about foreign exchange is that it’s like high quality kitchen knife. A trained chef can use it to butterfly a chicken breast, I’d probably cut myself. If you’re like me, go the safe route and keep it here in the States. If you don’t mind the risk, go for it.

No reward comes without some risk.

(Photo: 100 Krona by sippeangelo)

This is a post by Connie Brooks, a new mommy in Louisville, KY and a regular contributor on Blueprint for Financial Prosperity.

Having a baby is one of the most incredible experiences in the world.

There are no words to describe the moment you hold your baby in your arms for the first time. When their little eyes look up to you and you realize you made the little tyke. There are no words to describes the feeling of pride the first time you see them turn over, or when they crawl and then eventually walk.

While these memories are priceless, having a child is a very costly endeavor. Most parents expect to pay for the obvious things once the baby arrives like food, diapers, and clothes but they often don’t anticipate “the other stuff.” When we had our daughter, we expected to pay for more food and diapers, but we never planned for “the other stuff.” From the moment I found out I was pregnant though, a seemingly limitless chain of bills started showing up. We were literally supporting our baby from the moment we knew about her. It doesn’t have to be that way.

If you are thinking about having a baby any time soon, here are some of the expenses (”the other stuff”) you’ll want to plan for, even before your baby arrives:

1. Prenatal Care

As scary as it is to think about, most miscarriages happen within the first three months. Chances are your Ob-gyn will not even want to see you until you hit the three month mark because of this. After that, you can expect to go once or twice a month for the next six months, and even more frequently for the final three months.

Every time I went to my Ob/Gyn, it cost me an insurance co-pay of $30. We had hyperactive prenatal doctors so we ended up going even more often than average. Our cost for pre-natal doctors visits over nine months was around $500. Your cost will vary depending on your insurance plan.

2. Prenatal Diet

Your baby is literally depending on you for its nutrients. If you don’t have a healthy diet, then your baby will not get what they need, and that could have long term consequences.

The truth is, we weren’t eating very well when I got pregnant. We ate out once, sometimes twice a week, and ate a lot of beans, rice and eggs otherwise. Doing that kept our before baby food budget to around $300 a month.

After I found out I was pregnant, our food budget literally doubled. We stopped eating out, and I bought fresh organic fruits, vegetables and yogurt. The only food I craved when I was pregnant was steak (which was odd since I am a semi-vegetarian!). The steak was expensive too because I chose to buy only top quality grain-fed beef.

I did not care how much our food ended up costing us, I wanted my baby to have every building block she needed to grow. Over a twelve month period (I breast fed for three months afterward, so we kept our diet the same.) Our food ended up costing us $7,200. Prenatal vitamins added in another $270 over nine months.

3. Maternity Clothes

– I gained around 20 pounds while I was pregnant, so my clothes fit me for most of my pregnancy. However, by the eighth month, there was no containing my belly. I had to face facts and invest in a few good quality maternity clothes. I bought a week’s worth of clothes as cheaply as possible. I also used my husband’s shirts and bought things like hip-hugger pants that I could wear after my baby. The total cost of my maternity clothes was around $400. If you’re careful you might be able to get by cheaper, but it could easily cost more depending on your needs. Try to maximize sales whenever you can!

4. Baby Clothes & Supplies

We were very blessed because our friends and family gave us nearly everything our daughter would need for her first few months. If you don’t have a strong supportive network, then this will be a real expense.

Wal-Mart and Target have the most reasonably priced baby clothes. If I had to put a price on what we were given I would say that it amounted to easily $800 to $1000 worth of diapers, clothes, shampoo, and supplies. Again, we had an extremely generous family, who put all they had into helping us prepare for our baby. In retrospect, If I were the one paying for the items, I would have spent around $400 total on clothes and supplies for my daughter’s first few months – and that would have been plenty.

5. Nursery & Travel Items

The crib for our daughter was $500. Her mattress was $100. We bought a crib that would turn into a toddler bed, and eventually a full sized bed as she grew. Her car seat and stroller ran us about $400 – again because we bought for the long term and wanted something that would last through several children if necessary. You can definitely do this cheaper than we did! The total cost for her nursery was around $1,500 after decorations.

6. The Big Day(s): Hospital and Delivery Costs

How much this ends up costing you will depend on your insurance, how difficult your labor is, and how well everything goes.

In my case, nothing was simple. I spent two days in the hospital being induced and ended up with a c-section. My daughter had a fever when she was born, so she spent a week in the hospital on antibiotics undergoing a lot of tests. (She was fine, thank God!) They kept me for four days after my surgery. I can honestly say that for a month after we came home I dreaded going to the mailbox and pulling those medical bills out!

The total cost for her delivery was nearly $4000.

7. The Paperwork

After my daughter was born, we did have to take care of some paperwork. Particularly ordering several copies of her birth certificates. This was another unexpected cost. I’m not sure why I thought that the hospital would provide us with one – they didn’t. They sent her birth records off and we had to order an official copy. Those were $10 each, and we ordered 3, so we $30 spent on her paperwork.

8. The Aftermath

In the first few months following her delivery she and I both went back to the doctor a couple of times for routine checkups. This was not a huge expense, but it was one I did not expect. The follow-up visits probably ran us around $150.

From conception to birth, our daughter cost us about $14,000. Fourteen thousand dollars. Oh, and that does not even take into account the diapers or the eventual formula costs once I went back to work. It also does not include childcare, which thankfully, we did not have to get.

If you are considering having a baby, please make sure that you get a hefty savings account going before you take the plunge. Many of these costs we had not planned for, and that made it more difficult than it had to be. When we planned out our finances before getting pregnant, we always planned out what we thought the costs would be after we had her, and we did not take into account what it would cost just to get her to delivery!

I am very sure that if I had it to do over again, I could do it for less money. I think that I went into it from the mindset of doing what I thought was right for my baby, and the finances took a backseat. That being said though, my daughter’s birth story is an excellent example of how having a baby can easily cost you a fortune – so it’s something to think about.

How about you? Do you have children? What would you say it cost you and your spouse to have your baby? Leave us a comment below!

(Photos: Baby Factory by swanksalot, Baby Booties by normanack, Baby Birth Certificate by michaelallroy)

Every few months, about a dozen friends of mine get together for an event we aptly called Scotch Night. The idea behind scotch night is that it offers us the opportunity to try a variety of premium scotches on the cheap. Rather than paying $60-$100 a bottle on something you may or may not like based on its region, you pay into a pot or bring your own bottle and sample others. You in effect pay $60 - $100 to try as many scotches as there are people; all the while hanging out with friends.

There are really only two rules to our scotch nights. Either you bring your own bottle to share or you chip in about $20 to pay for a communal bottle of something we’ve never had. The point of the Scotch Nights isn’t to save money and get wrecked (a sign we are getting older!), it’s to sample premium Scotches without breaking the bank in doing so.

15-Second Primer on Scotch

If you’re planning your own scotch night and know little about scotch, here’s a quick primer. Scotch is whisky that’s made in Scotland, whisky is a generic term for alcoholic beverages distilled from fermented grain mash and aged in wooden (oak) casks. In order for it to be called a Scotch, it has to be distilled in a Scottish distillery, the grain used has to be malted barley, it must mature in Scotland in oak casks for at least three years and one day, and finally it cannot be bottled at less than 40% alcohol by volume. Scotch can come in four types as well - single malt, vatted/pure malt, blended and single grain. Single means the malt came from one distillery, the blended/vatted/pure designation means the malt came from multiple distilleries.

6 Classic Single Malts

Ok, now you have the chemistry (sort of), where do you start? I think you start with single malts and with some of the “6 Classic Single Malts.” According to the United Distillers and Vintners (which is a subsidiary of a spirits company Diageo and not an independent trade organization), there are 6 Classic Single Malts (their names are preceded by the region they come from and they all appear to be Diageo brands):

• Islands - Talisker
• Islay - Lagavulin
• Highland - Dalwhinnie
• Lowland - Glenkinchie
• Speyside - Cragganmore
• West Highland - Oban

From here, I would find some options from those regions (you don’t have to necessarily go with Lagavulin if you want an Islay, there are several options to chose from (Ardbeg, Bowmore, Caol Ila, Laphroaig). Each region will have different characteristics (Islays are known to have a stronger peaty component and also a bit of salt and iodine).

How important is age? The older a scotch is, the smoother and less “bity” it will be. Younger scotches will seem a bit rougher and the alcohol component will be sharp. If you’ve ever let wine “breathe,” it’s a similar idea. It’s the reason why some prefer their scotch on the rocks (with ice) or with a splash of water, it’s to get that heat to open up a little. Also, the age refers to the time spent in the cask so you’ll get a stronger flavor as the years go by. I think the best option is to try them all in their earliest years (or a few steps up) to get a good basis for comparison. You may find that the flavor components of an 18 year Macallan is too strong for you and you prefer the 8 year; you won’t know unless you try it.

Lessons Learned

Scotches, like wines, have different subtleties and flavors and you often have to sample a few to get a feel for the types you like. I prefer to drink peatier & smokier scotches in the beginning of the night and then transition to smoother, crisper scotch towards the end. My favorites are Islays (Lagavulin) start (smokier and peatier scotches) and transitioning to Macallan and Glenlivit (both are Speyside scotches) towards the end of the night.

Like wine, scotches go well with chocolate. I’m not an expert but I know that darker chocolates work better with smokier, peatier scotches (see this article on chocolate and Laphroaig, another scotch I’m a fan of).

Skip anything cask strength unless you’re going to put it on the rocks or splash some water in it, it just tastes like burning. I bought a bottle of Macallan Cask Strength and while it was pretty good, the high alcohol content pretty much dominated a lot of the flavors. It looks cool (comes in a fancy red box and all), but go with one that’s been pulled down out of the stratosphere.

It helps to keep notes, as dorky as it might sound. The problem with trying a bunch of scotches in one night is that your memory begins to fade. While you might remember broader preferences (you like peatier scotches, don’t like sherry casks, etc.), it’ll be harder to remember specifics. Of the Islays, do you prefer Bowmore, Laphroaig, Lagavulin, or Caol Ila? Did you try Bruichladdich or Bunnahabhain?

When keeping notes, don’t stick to the terms you think fancy schmancy scotch drinkers use to describe scotch. I’ve used the term peaty, smoky, iodine, salty, etc., you don’t have to. While those may be scotch-describing terms, describe them in a way that makes sense to you. Part of the popularity of Gary Vaynerchuk’s Wine Library TV is in how he describes wines in plain English. I’ve seen an episode where a wine was described as having a component of “Hello Kitty eraser.” Snooty wine people don’t know what Hello Kitty eraser smells like. Use whatever terms make sense to you and will evoke the same response. If a scotch tastes like the smell of honey the moment you burn it, then write that down.

If it weren’t for these scotch nights, I wouldn’t have tried as many scotches as I’ve had. I wouldn’t have developed as much of an interest in it either because, frankly, paying $60-$80 a bottle isn’t something that’s in my genes. I recognize that the bottle can last a long time but it’s a significant up-front cost to “try out” something, you know? With these scotch nights, I’ve been able to try out a bunch of different scotches and find the ones I enjoy.

(Photo: batcave13)