Before I was a convert I had no idea why people signed up for Netflix and took my fair share of shots at Netflix. So what changed my mind?

Online Streaming Video

Getting the DVDs sent to our house is only the beginning of the service and, quite frankly, the least valuable. I enjoy movies but on my list of entertainment options, movies aren’t near the top of the list. However, the online streaming video options that Netflix offers include lots of television shows that aren’t carried on sites like Hulu. If you want to watch the past seasons of popular television shows, Netflix has plenty of them available streaming to your PC or TV. If you like PBS documentaries, they have those (or History Channel, or any number of documentary-laden channels). DVRs are nice, but the show has to be broadcast before you can record it.

XBox Live Integration

The clincher for me was integration with XBox Live, which is the online service for Microsoft’s XBox 360 game console. This puts the entire library of Netflix’s online content at your disposal because the XBox is already hooked up to the TV. You don’t have to fiddle with connecting your computer to the TV and streaming the video that way, it’s all set up.

Six months ago, the process of watching shows or movies on the XBox was tedious. You had to add shows or movies to your Instant Queue before you could watch it on your XBox. Now, you can search the library from the XBox without having to add it to your queue first. You can still add things to your instant queue if you want (and we do, it’s easier than searching for it).

To take advantage of this you’ll need an XBox, XBox Live Gold membership, and a fast internet connection. So while the minimum plan is only $8.99, unless you have it set up then you’ll have to pay more for the infrastructure.

Review of Netflix Plans

Netflix has a variety of plans starting with the $4.99 a month for one DVD out at a time (limit 2 a month) and 2 hours of online content to $16.99 a month for 3 DVDs out at a time and unlimited online content. I personally don’t see the value in getting the $16.99 3-DVD plan, at most I’d get the $13.99 a month 2 DVDs out at a time because it lets you keep one while one is in transit.

Here is a review of the four plans:

Was Netflix Worth It?

Qualitatively, I think so. We are on the1 DVD out at-a-time plan plus unlimited instant watching for $8.99 a month. We chose that plan because of the unlimited instant watching, which is what you’ll need to get the XBox 360 integration I talked about above.

I went back to look at Feedfliks, which will take your Netflix account usage data and calculate the cost per movie, how long it takes for you to return DVDs, and other good statistical information to tell you whether you’re maximizing your usage. For us, it’s been worth it as our Relative Cost/Movie is at 40 cents each. Our usage is heavily influenced by our instant watching (25 shows or movies in the last month, 75% of which were TV shows).

Free 2 Week Trial

Netflix offers a 2 week trial that can help you decide if you like it. It’s long enough to get a couple movies by mail, to see how long it takes to receive them, but the real value is that it lets you browse their library to see if they carry the things you like to watch. If you sign up for the trial, select a plan that gives you unlimited video so you can watch content online. If nothing else, you get two weeks of all the online content you can mash into your brain.

Do you use Netflix? Hate it? Love it? Please share your opinion in the comments!

(Photo by brymo)

Netflix Review: Is It Worth It? from personal finance blog Bargaineering.com.

Checks for Vets

When I was approached by Joe McCarthy’s publicist about the book, I knew I had to get a copy and review it. I’m always grateful for those who serve, have served, or work in support of our armed services. Knowing how complicated government forms can be, I knew a guide to the whole process, written by someone with intimate knowledge of the process, would be invaluable for those seeking to claim their benefits.

Joseph Scott McCarthy

Who is Joseph Scott McCarthy? Joseph McCarthy has worked for more than eight years as a veterans advocate helping veterans get their VA pensions. He works with veteran service officers at the American Legion, county veteran service officers, and VA personnell to educate and guide thousands of vets and their surviving spouses through the VA pension process. Prior to that, he was a healthcare professional for twenty-nine years in Pennsylvania.

Checks for Vets

Despite the broad name, Checks for Vets primarily focuses on the Aid and Attendance and Housebound pensions program. That program is a non-service-connected pension, which are for veterans whose disability or death was not caused by or aggravated in the line of active military duty. The pension is available to wartime service vets, surviving spouses, and surviving dependent children who meet eligibility rules.

The books through the entire process of applying for and receiving the Aid and Attendance and Housebound pension. It begins with a look at VA Pensions and Benefits, from the past to the future. Then it covers eligibility in great detailed, how much you can expect to receive, how to file a claim and avoid delays, followed by locating one of the most important documents a VA needs for many of his or her benefits – the Discharge Record. Then it discusses the pension itself, other health benefits, and finishes with a series of Appendices of excellent resources one can turn to such as the location of American Legion and VA facilities.

One of the most valuable parts of the book are in the two dozen example forms. The book will include an official form along with detailed directions on what information is required in each box. It explains what parts of the form you can skip, based on previous answers, and what answers you have to fill out. It’s very detailed, much more so than the explanations in the form’s instructions. This is where McCarthy’s experience is most present.

If you’re a veteran looking for help on the Aid and Attendance and Housebound pensions program and can’t get assistance from Veterans Affairs, a local CFW or American Legion, this book looks like a good resource. I hesitate to recommend the book because I’m not a veteran and I’ve never applied for benefits (obviously). I do know that government forms are generally complicated and I’d take all the help I could get in order to avoid delay.

Checks for Vets by Joseph Scott McCarthy from personal finance blog Bargaineering.com.

What if you just want to maintain a budget? Enter You Need A Budget. You Need A Budget, often called YNAB, is a desktop budgeting software package that will help you set, maintain, and stick to a budget. It’s a much better version of what I used to hack together in an Excel spreadsheet.

YNAB Methodology: Four Rules

Before we get into the review of You Need a Budget software itself, I wanted to write about the basic premise of the whole system. Budgeting is almost never about the tools but how the tools establish a framework for which to think about your budget. For example, with my Excel spreadsheet, I molded it to match my own budgeting mentality. If you very good with budgeting and love hacking around with Excel, then Excel is probably right for you.

If your approach to budgeting is similar to YNAB’s methodology or if you have no approach, then you would do well to adopt the YNAB framework, with or without their software. You can budget with a pen and piece of paper, it’s just easier when you have a powerful application guiding you.

The YNAB Methodology is YNAB’s approach to budgeting and establishes a good framework. The steps are:

1. Rule One: Stop Living Paycheck to Paycheck – A notebook won’t help you stop yourself from living paycheck to paycheck, but YNAB will. You will have two types of income, primary and supplemental. When you start the system, you’ll record all your income, even if it’s from your primary job, as “supplemental.” Supplemental means that you will be spending the income in the current month. You are, in a sense, living paycheck to paycheck because you spend the money in the month you earn it. As you work through the system, eventually you’ll reach a point where your job income will be listed as primary income, to be budgeted for use in the next month. This is important because when you go to the budget section, the income will appear in the next month. The tool has, in effect, taken you off living paycheck to paycheck.
2. Rule Two: Give Every Dollar a Job – This rule enforces zero-based budgeting, where every single dollar is assigned to a category. The value in budgeting like this is that you have accounted for every penny you have in your budget. So many times we just budget for the big things – food, rent, etc. The act of sitting down and setting these numbers is tremendously valuable because you’re actively making decisions, rather than letting things happen.
3. Rule Three: Save for a Rainy Day – This rule is less about the tool and more about the idea of creating various savings funds whether they’re for emergencies, annual taxes, holiday spending, etc. This fits in line with the zero-based budgeting because these are entries in your budget.
4. Rule Four: Roll with the Punches – This is a great feature of YNAB that a lot of other packages don’t have. What happens when you go over your budget? Most other packages warn you, tell you not to do it next time, and probably do nothing about it. YNAB will deduct it from next month’s available funds. This is good.

I especially love Rule Two, Give Every Dollar a Job, because it is the cornerstone of budgeting and, subsequently, the YNAB approach. They work off the zero-based budgeting system where ever single dollar you bring in is accounted for. If you earn $1,000 a month, every single dollar is earmarked for something before the month begins. If you are over or under, you adjust your budget accordingly the following month.

On the tutorials page, there are short videos explaining how YNAB is used to support those four rules. I recommend watching them even if you have no intention of using YNAB because they easily explain some good budgeting principles. I found value in the rules themselves but having a video translate it into how it’s applied in YNAB was great.

You Need A Budget & YNAB Pro

You Need a Budget comes in two flavors, the basic edition and a Pro version. The basic version is going to be phased out soon so I didn’t want to spend too much time reviewing it. It’s a hardcore Excel spreadsheet, costs the same as the Pro version, and doesn’t contain as many features. They both work off the same YNAB Methodology, except with the Pro version you don’t need MS Excel because it is itself an app. (that ends the Basic review )

If you had a chance to see the videos, then you have a general review of the features of the Pro version. The Pro version is a full desktop application and the free 7-day trial gives you access to every feature in the application. This isn’t a watered down trial, it’s the real deal. The trial is for seven days, instant digital download, and the full version is regularly $49.95. All that, full support, and it comes with a 30-day money-back guarantee.

Importing Data

Not every piece of data has to be manually entered into the register, YNAB is able to important OFX, QFX, QIF, and CSV files from major financial institutions. It’s the same files used by Quicken and MS Money and YNAB never asks for sensitive information. You visit the bank, you enter your credentials, and you download the files yourself. It’s an extra step but it’s secure because you aren’t giving a third party any sensitive information.

Reporting

YNAB has some pretty looking reporting features that include pie charts and bar graphs. Visualizing your budget is difficult when you’re just looking at a list of numbers and YNAB does a fine job display your spending in three easy to view charts. There is a pie chart that illustrates Spending by category, a bar graph that shows total spending across several months, and then a final one showing current balances of various categories.

Total Spending Chart	Spending by Category

Five Bonus Spreadsheets (with Pro)

Five bonus spreadsheets come with the YNAB Pro package:

• YNAB Debt Snowball – Based on Dave Ramsey’s debt snowball strategy
• 2009 Income Tax Planner – This can help you plan for your 2009 tax return.
• YNAB Retirement Planner – You can use this spreadsheet to help plan your retirement, including contingency plans.
• YNAB Mortgage Analyzer – If you have a mortgage, you can use this spreadsheet to help figure out how to pay it down faster, whether a refinance makes sense, etc.
• YNAB Car Maintenance Schedule – Need a little help figuring out when you should be bringing the clunker in for maintenance? This spreadsheet can help you out on that.

I have not seen these spreadsheets first hand so I can’t make a determination of how good they are.

YNAB Version 3.0

YNAB is going to get a huge facelift for YNAB version 3.0 and will include significant feature additions. Here’s a look at the Register screen getting an update. It looks a lot slicker, doesn’t it? Well in addition to a new look and feel, they’ll be adding a lot of search capabilities, improved scheduling features, a more customizable approach to rule four, and many other features. It’s set to launch in November 2009.

Live Online Budgeting Classes

Another nice feature I am 100% certain other budgeting packages don’t offer are free classes. If you are not good at budgeting or would like to take advantage of live classes that introduce you to the YNAB system and how to manage your finances, YNAB offers absolutely free classes several times a month. You can review the schedule to see what’s available. Classes are free, are limited to forty attendees, and include a live Q&A at the end of the session.

Finally, don’t take my word for it, you can see a ton of reviews on Amazon.com for YNAB Pro. The vast majority of reviewers rated it a 4 or 5 star product. One warning, I recommend you buy it directly from YNAB because if you buy it from Amazon you may not be able to upgrade to YNAB 3.0 for free.

Conclusion

Whew! That pretty much covers the YNAB system, YNAB 2.0, and even a look forward to YNAB 3.0 scheduled for release in about a month or two. When I first started this, I had no idea what I was getting myself into. This is quite possibly one of the longest reviews I’ve written in part because the product has so many features, is built on a sound financial foundation, and is about to release a brand new, soup to nuts, version in 3.0.

If you’ve been searching around for budgeting software, I recommend giving YNAB a look because with their 7 day trial, you can get a good sense of whether it’s right for you.

7-day free trial of YNAB

You Need A Budget (YNAB) Pro Review from personal finance blog Bargaineering.com.

Overall, the book is really comprehensive and after the first chapter, where the most basic of basics are explained, I felt like I knew enough about options to be a danger to myself. Call options, put options, wonderful… how hard could it be? If it were that easy, there wouldn’t be another two hundred pages to read!

How does it compare to Brian Overby’s The Options Playbook? Overby’s book is more about the various plays (hence “playbook”) and less about the ins and outs of options trading. I’d say its more “friendly,” with more pictures, diagrams, and not a lot of data to bog you down. Wolfinger’s book is like a textbook, educating the reader on every last detail in options.

Remember, Brian Overby is affiliated with TradeKing. I have to believe that part of the reason his book is so friendly is because its part education and part marketing. He’s trying to ease you into learning about an otherwise intimidating subject, so the emphasis is on gentle education. Wolfinger’s book is more like a textbook.

Which would I prefer? If you’re a seasoned investor otherwise and want to get serious about options, Wolfinger’s book is a better place to start than Overby’s. If you are just a casual trader and just want to learn a little but about options, then you can go with Overby’s book. In the end, if you really want to trade options and trade options intelligently, you will need Wolfinger’s book or one of a similar caliber.

The Rookie’s Guide to Options by Mark Wolfinger from personal finance blog Bargaineering.com.

Who are Lara Starr and Lynette Shirk?

Lara Starr is coauthor of The Party Girl Cookbook, with Nina Lesowitz, a book that “makes everything quick, easy, inexpensive, and most of all, fun. No deep-frying at the last minute or stuffing miniature mushrooms for hours on end. The 24 themed ftes in this book each includes ideas for invitations, party favors, decorations, music, games, costumes, and tons of food and drink.”

Lynette Shirk is the accomplished chef of the pair, a classically trained chef that has worked in some of the finest kitchens in the world, including Chez Panisse, Masa’s, Wolfgang Puck’s Postrio, Bizou, Stars, and Williams-Sonoma corporate headquarters.

So in terms of credentials, these two have it.

Frugal Foodie Cookbook

The book is separated into nine chapters, covering each meal, some snacks (even midnight snacks), party planning and even gifts. The first five, as you can imagine, cover the various meals of the day: breakfast, brunch, lunch, afternoon snacks, and dinner. Chapter 6 covers parties on a shoestring, followed by kids meals, midnight snacks, and even a chapter on thrifty gifts!

All throughout the book are little “frugal foodie tips” that are absolutely brilliant. For example, the first Frugal Foodie Tip explains why nonfat milk makes better foam (for coffee) than low-fat or whole milk. The fat messes up the stability of the bubbles forming within the milk, so the absence of fat is best. When they make meringue, they whip up egg whites only because the yolk has fat that interferes.

Following each chapter is a “Cents-able Solutions” section that covers one key frugal idea that isn’t confined to the chapter. For example, at the end of Chapter 5: Dinners on a Dime, they give you a page and a half table of substitutions you can make to avoid a trip to the store. If you don’t have sesame oil, consider sautéing 2 teaspoons of sesame seeds in a quarter cup of vegetable oil. If you don’t have currents or dates, substitution with raisins. No molasses, make your own by dissolving 3/4 cup brown sugar into a quarter cup of warm water. Clever stuff that saves you gas and a trip to the store.

I really enjoyed the book, much more so than I expected because of all the little trivia bits, useful tips, and great “centsable solutions” like the substitution table. I’m always hesitant to recommend that you get a cookbook because if you’re like us, you have a bunch that you never use, but I really enjoyed this one.

The Frugal Foodie Cookbook by Lara Starr and Lynette Shirk from personal finance blog Bargaineering.com.

The book contains a hundred little tricks and hacks that will save, or earn, you some serious money. He admits that while his advice does contain “a few splashes of innovation,” much of it is common sense – and it is. However, if the Darwin Awards are any indication, common sense is in short supply and we could all use a little refresher.

Secrets of a Stingy Scoundrel

I’m sorry to say but money saving tips type of books are a dime a dozen. Unless you pack it with hundreds of tips, as Trent did in 365 Ways to Live Cheap, Kerry did in 397 Ways To Save Money and the Wise Bread crew did in 10,001 Ways to Live Large on a Small Budget (WB: “I see your 300-something tips and raise it to TEN THOUSAND… and one.”), you’re going to have a tough time competing.

However, this book is worth picking up because he has two things going for him in Secrets of a Stingy Scoundrel:

• These tips are meaty. They aren’t your “use dryer sheets to de-static your clothes (tip #1), use dryer sheets in luggage to prevent musty smells (tip #2), use dryer sheets…” type of tips. You can pack in a few thousand of those in no time. His are multiple pages long and designed to save you dollars more often than cents.
• He’s hilarious. He’s self-deprecatingly funny as he teaches you the “black arts of scoundrel-ism.” None of the books I listed before are funny. They are straight-forward, a bit dry, useful, but not funny. Phil’s book is a hoot to read.

I was tempted to explain one of the 100 dirty little money-grubbing secrets but any summary would take away from the enjoyment of the book. His ability to turn his scoundrelism into humor is awe-inspiring. Some of his tips include his little hack for beating any of those fast food games, like the MacDonald’s Monopoly game or the Scrabble game. You have tips for getting into free movies, getting free swag (scamming banks no less), and all sorts of other little hacks. And all throughout the tips, his writing is funny and entertaining.

So, my recommendation is that you should buy the book, read it, and then return it. It would put a smile on Phil’s face.

Secrets of a Stingy Scoundrel Review from personal finance blog Bargaineering.com.

However, I feel for the people who, through no fault of their own, now have to deal with the after effects today and thought a review of this book might be helpful. So, let’s dive into the book!

Who is Dale Siegel

She is an attorney and licensed mortgage broker with twenty-plus years of experience in the real estate industry. She clearly has plenty of experience in the industry to be writing this type of book and the experience shows. She not only covers the big points, such as the entire mortgage process from an ultra high level, but she includes little notes along the way that shows she’s done the process over and over and over again (remember to change the locks on the doors and option ARMs are designed for people with irregular income, not for people with little income).

The Book

The book itself is laid out in a very straightforward way. It begins with a few chapters on the buyer’s financial situation – your credit score, your income, and other money related issues. She talks about how to get your financial situation settled and ready for the home buying process. It’s great information if you’re a first time homebuyer and want to avoid any headaches later on in the process.

The book then continues on to evaluating a home, including the appraisal and home inspection process. I thought this chapter was a gem, especially for first time homebuyers. I know that when my wife and I were looking at homes, we had on our rose colored glasses throughout the entire process. We knew what we liked but didn’t see what we didn’t like because weren’t homeowners. This chapter is great for pulling you back to Earth and helping you take a more discerning eye towards the place you want to buy.

The next few chapters contain the bulk of the book and it covers mortgages, where to look for a mortgage, and the loan process including interest rates, closing costs, and the close itself. The majority of this section is available online but not all in one place. It isn’t hard to find an explanation of Options ARMs or 40 year loans, but you won’t find all this information packaged into one convenient paperback book with a 20 year veteran’s notes sprinkled throughout. The value added is in those little notes and the fact that it’s all in one book.

Summary

If you are a first time home buyer, I believe getting a copy of this book, whether you borrow it from the library or buy it from the store, will help you more easily navigate the home buying process. It’s a scary time and you could lose a lot of hours on the internet searching for the information you want.

I thought the book was written quite well in terms of pacing and the depth of the material. In some areas, the book is very broad, it has to be, so you may find yourself skipping sections that you think don’t apply to you. I warn against it though. You may not want a 40 year mortgage, but I advise you to read about it so you’re more informed about the options you might have. An Options ARM is probably not right for you, but you should at least understand it and who it is designed for.

If you’ve been through the process before or otherwise have a good understanding of it, you won’t get as much out of the book. First time homebuyers will find it extremely valuable but everyone else will find themselves skimming quite a bit.

The New Rules for Mortgages by Dale Robyn Siegel from personal finance blog Bargaineering.com.

The problem with personal finance is that there are multiple solutions to any one problem. If you think it’s simply about math, you’re wrong. Someone in credit card debt understands that when you use your credit card and don’t pay your entire bill, you’ll go into debt. They aren’t stupid, they know how interest works, but there is a non-math reason why they’re in debt.

If you had to boil down the book into a single sentence, then I’d say that Dave Ramsey’s Total Money Makeover is a book that gives you a good framework to get yourself out of debt and back on solid financial footing.

Dave Ramsey’s “Baby Steps” to Financial Freedom

At the core of Dave Ramsey’s advice is his “baby steps” towards financial freedom:

1. Save $1,000 cash as a starter emergency fund
2. Start the debt snowball
3. Finish the emergency fund – accumulate 3-6 months of expenses
4. Invest 15% of your income in retirement
5. Save for college
6. Pay off your home mortgage
7. Build wealth – Invest, donate, enjoy life (without going into debt)

Debt Snowball Strategy

The debt snowball strategy is one that has received a lot of ink throughout the years. The strategy states that you should list all of your debts and their monthly payments. If you have extra cash to put towards debt, put it towards your smallest amounts first. When that debt has been repaid, take the amount you would’ve sent them and add it to the payment you make to the second smallest debt. This way, as you pay off your debts, your monthly payments to the other debts increases like a snowball.

Why does this strategy work? It comes down to motivation and celebrating successes. It makes more financial sense, mathematically, to put your extra cash into the debt with the highest interest rate. However, by paying off the smaller debts, the number of debts you do have decreases. These successes give you the motivation to continue your payments and put you back on the right path.

The brilliance in this methodology, specifically the much maligned debt snowball strategy, is that it takes into account human psychology. That’s the non-math part of personal finance. Like I wrote earlier, people don’t get themselves into debt because they don’t understand math. No matter what you say about the inefficiencies in his strategy, the reality is that it works. I’d venture to guess that thousands of people have pulled themselves out of debt with the advice he’s given in just this one book.

Summary

The book is routinely in the top three in Amazon’s Personal Finance category, so if you’re struggling with debt, I think you might want to give this book a try. The book also contains a lot of motivational stories of people who probably were in more dire straits than you and were still able to pull themselves out.

One final recommendation, if you are in debt, borrow this book from the library and put that cash towards your smallest debt.

Dave Ramsey’s Total Money Makeover Review from personal finance blog Bargaineering.com.

About Gregory Karp

First, who is Gregory Karp? He is a nationally syndicated columnist whose weekly “Spending Smart” column appears in the Chicago Tribune, Baltimore Sun, Hartford Courant, and several others. The column has won the Best Column Award from the Society of American Business Editors and Writers three different times. He’s also authored another book, Living Rich by Spending Smart. If he has a background in finance, it’s not listed anywhere in his bio – in a sense, he’s kind of like you and me. He’s someone who has learned the principles of personal finance, had the opportunity to write about it for over twenty years, and has parlayed that learning into a book.

The 1-2-3, Step by Step Approach

When I first opened the book, I thought the 1-2-3 meant there were only three steps to the money plan. To be honest, I didn’t believe that personal finance was so simple that three steps alone could set someone back on track. While it appears I’m still right, Karp’s book doesn’t refer to a three step plan, the 1-2-3 refer to how each part of your financial life must be tackled step by step. There’s no 1-3-5 money plan, it’s 1-2-3.

So, now that you know it’s not a three step process, what does the book cover? It covers everything from how you get started to estate planning, from ID theft to bill paying, from making sure you have adequate insurance to whether organic food is worth the price. It’s pretty detailed in the topics that the book covers, but I wanted to talk about the overarching principles he prints on the inside jacket of the book.

Don’t be paralyzed by perfection: Be good enough – When I saw that, it added to what I thought of Karp. While I’ve never read his columns, this single line told me that he was a realist. He wasn’t a financial adviser looking at hard numbers and telling you that you should invest 50% in this and 50% in that. One of the greatest challenges for regular people like you and me is overcoming analysis paralysis. Should I invest in the stock market today? What if it goes down tomorrow? While you tell yourself you shouldn’t market-time, we all know we do it. Karp’s saying that it’s better to make a good decision now than a perfect decision someday… a someday that may never come. I wholeheartedly agree.

The book has a lot of other practical tips sprinkled through. For example, he echoes the idea that you should be contributing 10-15% of your salary towards your 401(k). If your eyes bugged out of your head, you weren’t alone. He gives a good suggestion, again one I’ve seen elsewhere, that you can just increase your contributions by a percent or two every time you get a raise. It softens the blow and you probably won’t even notice it!

Summary

Overall, I liked the book. The step by step approach is very practical and actionable. Whether it’s a book for you will depend on where you are in your life, it’s a book you should check out at the bookstore and, after flipping through it, you feel it’s for you, pick it up. If you don’t have it in your bookstore, Google Books has a sneak preview you can check out.

Review: The 1-2-3 Money Plan by Gregory Karp from personal finance blog Bargaineering.com.

W. Randall Jones is a pretty rich man himself, having founded Worth Magazine, and in this book he spent two years interviewing local business editors and community leaders in a hundred towns to find the most successful and richest self-made individuals in each. 96 of the 100 were men, which, coupled with simplicity, gives us the title of the book. From there, he used public data to value their holdings to estimate their net worth, which is to say it’s a guess. Either way, the stories and quotes you read in the book come from very rich and successful people, even if they aren’t #1.

Twelve Commandments of Wealth

1. Seek Money for Money’s Sake and Ye Shall Not Find
2. Find Your Perfect Pitch
3. BYOB: Be Your Own Boss
4. Get Addicted to Ambition
5. Wake Up Early – Be Early
6. Don’t Set Goals – Execute or Get Executed
7. Fail to Succeed
8. Location Doesn’t Matter
9. Moor Yourself to Morals
10. Say Yes to Sales
11. Borrow from the Best – and the Worst
12. Never Retire

In each chapter, Jones weaves the stories from the richest men and women in town to support the commandment of the chapter. If it’s RMIT Commandment #3, then he’s explaining how each of the entrepreneurs found success in controlling their own destiny and being their own boss. If it’s about failing to succeed, he’s sharing the failures of many of the richest men and women prior to their success stories.

The book is a lot like Ryan D’Agostino’s Rich Like Them, except D’Agostino actually interviewed affluent people in their homes about their success. The lessons from both are valuable and the books are similar in that regard, but I think Jones’ Richest Man in Town focuses on teaching a lesson in each chapter, rather than just learning from a success story.

The Richest Man in Town by W. Randall Jones from personal finance blog Bargaineering.com.

The book goes through every chapter of his life, from leaving Kearney Nebraska to his life in Chicago and his (four) “rounds” in Washington DC. It includes his time as Chairman of CEO of Lehman Brothers and everything else in between. The story of Blackstone Group doesn’t appear until Chapter 14. Some believe that living life is about collecting stories, making memories of the good and bad that has happened, and Mr. Peterson has done an excellent job writing down his.

If you’re a fan of books like these, where you get to hear stories straight from the first person, then you’ll enjoy this. If you’re thinking you’ll learn something actionable, you probably want to pass on this. If you just want to learn about him and the Blackstone Group, check out Wikipedia. It’ll be less fun but it’ll be faster.

Review: The Education of an American Dreamer by Peter G. Peterson from personal finance blog Bargaineering.com.

397 Ways to Save Money by Kerry Taylor is a book that has exactly what you think it’ll have, nearly four hundred ways to save money in almost every aspect of your life. I’m a big fan of books like this because they’re very “referency.” You won’t read it cover to cover, but you can pick it up every day and flip through it for ideas and inspiration.

The book is organized into four major sections:

• Big Decisions (renting, homeownership, financial choices, shopping)
• Home Management (home maintenance, energy, cleaning)
• Room by Room (kitchen, living room and dining room, bedroom, kid’s rooms, bathroom, laundry room, garage, outside your home)
• More Ways to Save (vacations, pets, family meals, maintenance, hardware store)

Want an example of a tip? Here’s one we have used in the past:

Buy mis-tinted paint for smaller surfaces.

Buying a quart of paint to change up a wall or put a fresh coat on an old table can be costly – about $15. To save some bucks on painting, check out the mis-tint or pre-tinted paints section in your hardware or paint store. They are often very good quality at a greatly reduced price and may be the perfect shade for your project. You may even find a bigger batch of mistakenly tinted paints and have enough to paint an entire room!
BOTTOM LINE: Save 30% to 50% by choosing a pre-teinted or mis-tinted paint the next time you’re looking to freshen a surface.

Now you’ll have to buy the book to read the 376 other ways.

My review may be biased because I know Kerry as a personal finance blogger, she runs SquawkFox.com. However, you can’t go wrong with a book of money saving tips, right?

397 Ways to Save Money by Kerry Taylor from personal finance blog Bargaineering.com.

If you want to get the gist of the book, read chapter 2. Passell explains how your approach towards your entire financial world should be adjusted because of the new rules. He points to the impact inflation will have on your savings, how too much interest in your investments is as dangerous as too little, and how you should be investing in your best asset – yourself. Once you read the overview, you’ll get a sense of his style and whether you want to read more. The later chapters get into applicable advice and ideas that you can do immediately.

Overall, I thought it was well written, succinct, and applicable; three qualities I admire in a book. It’s even valuable if you know nothing about personal finance, because Passell does a good job explaining the basics like Coverdale accounts and Certificates of Deposit. It’s a book worth pulling from the bookshelf to find out if you like it.

Where to Put Your Money Now by Peter Passell from personal finance blog Bargaineering.com.

Ally claims the account opening process takes only 10 minutes, which, after my experience, is probably accurate if you don’t run into any problems (more on that later). It’s also important that you have all the information present, including but not limited to your social security number, your driver’s license, and any banking information for the accounts you want to link to your Ally account (ABA routing number, name, account numbers, etc.) It’s all fairly standard stuff.

Select Account

Selecting Account Owners: The first step covers how many owners the account will have. We selected joint owners (2) because I want the account to be in both of our names. The primary reason is so that both of us can access and work with this account. If it were only in my name, I would have to do everything. If it were only in her name, she would have to do everything. Joint account ownership gives us flexibility. The second reason is because FDIC insurance is $250,000 per account per person, so with two names on this account, we get $500,000 of FDIC insurance coverage. The difference between $250,000 and $500,000 is really meaningless for us but something to consider if you have a large amount of assets.

Selecting Products: The next sub-step of the account selection process is selecting the products you will want. We chose the 12-month CD offering 2.80% APY and the regular online savings account offering 2.25% APY. The interface is intuitive but the “Potential Earnings” calculation is a little tricky. On Certificates of Deposit, the potential earnings is calculated for the entire term. On Online Savings Accounts, it’s calculated for the month. Frr example, we put in $5k for the CD with a potential earnings of $138.38 and then $5,000 in the OSA with a potential earnings of $9.47. The $138.38 is the earnings over 12 months, the $9.47 is the earnings each month.

Naming accounts: I like to name my CD accounts a particular way – CD [term] [maturity date], so my CD is named CD 12m: June 2010 so I know it’s a 12 month CD that matures in June 2010. I don’t know what the account summary screen will look like so I always name my CDs that way so their name gives me all the information I need.

Personal Information

Here’s where it gets to look like every other bank account application process. You will need the social security number and your driver’s license (or military/state ID) of every account owner. From there, you enter in your typical personal information like address, phone number, identifying information (the license or other ID).

Here’s a nice touch on the part of Ally, each account holder gets their own username, password, secret code, and banking pin. I’ve had joint accounts at other online banks before, not many, and they have only given us one account login to share. (after you set up your login, each person is asked to setup the secret images and secret passphrases and their security questions).

After this step, your account is technically created.

At this point, I think our application departed the usual path.

Adding An External Account

After your account or accounts have been opened, you need to add an external account and then fund your account. Click on “Transfer funds” in the sidebar. At first, this transfer funds screen will be useless because you don’t have any “external accounts” set up. Click on “add external account” to… tada, add an external account.

We added our standard checking account and our ING Direct account (via firewall of course!) as our linked external accounts and used the “online test deposits” as our verification method. Some banks will let you link online savings accounts, some won’t. Ally did let me link up my ING Direct account, so that’s definitely a plus. They also give you the option of verifying by mail, but that would take a long time so we skipped it, that’s so 1999.

The transfers appeared several days later and the verification process was quick, everything you’d expect.

Transferring Funds

I’m afraid this step was as boring as it sounds. I simply chose which account to transfer from, both of my linked accounts were here, and which I was transfer to. I transfered a little into both my online savings account and the CD maturing in June of 2010.

I initiated the transfer two Wednesday’s ago at 2:30PM and the account was funded effective the very next day. I’m fairly sure the funds didn’t transfer in a single day but it appears they gave me credit starting then because that’s the effective start date of the CD. That’s important because the very next day Ally Bank lowered their CD rate from the 2.50% APY to 2.35% APY.

Summary

Except for the hiccup with my wife’s maiden and married names, everything went smoothly. Ally even gave me a call to tell me when the accounts were opened, though it wasn’t entirely necessary. In the week it took to open the account, I called Ally three times and was put in touch with an account representatives within five minutes of starting my call (including navigating the menus). I expected their customer service to be pretty strong. I had always heard that GMAC Bank’s customer service was pretty good and they’re trying to rebrand themselves, so I expected service to be top notch at least in the beginning. (when you log in, it even tells you, in the upper left hand screen, your expected wait time if you were to call their 800 number!)

Overall, there’s nothing about the process that bothered me. If you open an account, expect a hard inquiry to appear on your credit report because they do allow you to overdraw (which makes absolutely no sense). That will reduce your credit score by a few points. If you’re OK with that, the rates are very competitive if you don’t have an online savings account yet.

Time to add this account to our financial network map!

Ally Bank Application Review from personal finance blog Bargaineering.com.

So, they changed their name.

But are they a good bank to do business with? Let’s find out.

History Lesson on GMAC

If you are confused with all the acronyms and relationships between businesses, you aren’t a lone. I was very confused. GMAC stand for General Motors Acceptance Corporation and was once a wholly owned financial services arm of General Motors, the auto manufacturer. The financial services company provided financing to GM dealers, among other things. In 2006, General Motors sold a majority stake in GMAC to Cerberus Capital Management, thus providing some separation in the GM and GMAC relationship. Last year, GMAC was converted to a bank holding company to give them access to TARP funds.

GMAC Bank is a subsidiary of GMAC Financial Services, which offers a whole host of other financial products. This year, in May, GMAC Bank changed their name to Ally Bank.

Whew! Hopefully that all makes sense, but the end result is that Ally Bank/GMAC Bank is part of GMAC Financial Services, which is separate from General Motors itself and has been since 2006.

FDIC Insured

First things first, always confirm that the bank is FDIC insured. I would never bank at a non FDIC/NCUA insured financial institution and neither should you. Ally Bank is FDIC insured under FDIC certificate #57803 and have been since August 2004. The FDIC certificate still lists gmacbank.com as their primary internet web address but that will redirect you to the Ally Bank homepage. If you’re curious, their headquarters is at 6985 Union Park Center, Midvale, UT 84047.

Bankrate Safe & Sound rating: I don’t put a tremendous amount of credence in bank ratings because I believe FDIC insurance trumps everything, but they are valuable to read so you know what you’re getting into. Since the reports are quarterly, the most recent one is from December 2008, which is arguably a little dated. Back then, they still had a three star rating (out of five) and their predictive indicator was positive. You can read the memo for GMAC Bank here. I didn’t find a more recent report.

Online Savings Account

Let’s get to the reason why you and I care about Ally Bank in the first place, their deposit products. Ally Bank’s high interest rate on their high yield savings account is pretty good, enough to snag one of the top spots on my table of high yield savings account rates (Everbank is listed higher with an asterisk because they offer a promo rate for three months). The minimum to open is a comedic $0 (they will close your account if you don’t fund it, but I’d read that to say “no minimums”) and there are no monthly fees.

One thing I do like seeing is the explicit listing of a limit of six withdrawals or transfers per statement cycle. This limit is true on all savings accounts because there is a six transfer/withdrawal limit mandated by federal regulations. So many people, myself included, run into this problem with online accounts and it’s mostly out of ignorance. It’s nice to see them inform people about it.

No Penalty Certificate of Deposit

They’ve been heavily promoting the fact that they have no tricks, with no fees, no minimums, and all sorts of other anti-gimmick messages. It’s a great angle, especially during a time when banks are trying to earn as much revenue as possible, but a lot of other banks have very low minimums and don’t have any maintenance fees. In that respect, they’re not that much different. However, they do have one unique product – a no-penalty CD.

The no penalty CD lets you withdraw your money without paying a penalty, which is usually several months worth of interest. On CDs shorter than 12 months, the standard penalty is three month’s worth of interest. On CDs greater than 12 months, the standard penalty is six month’s worth of interest. For the no penalty CD, the penalty is in fact $0. The difference is in the interest rate.

In May 2009, they offered a 9-month No Penalty CD at 2.50% APY and a 9-month regular CD at 2.60% APY rate, a difference of 0.10% APY (the rates have since changed). That translates into $0.75 on ever $1,000 deposited over the 9 month period. Seventy five cents doesn’t look like a lot, but to be fair you need to compare it with the interest you would’ve earned at 2.60%. When you calculate the difference as a percentage of the total interest earned, it’s not a significant price to pay at 3.86%. You lose a little under percent to gain the flexibility to cancel, it doesn’t seem too bad and would be a fair price if you think interest rates are rising.

The only downside with the no penalty CD is that the only term they offer is 9 months.

Summary

It’s FDIC insured, they have great rates compared to their peers, and they seem to be in sound financial shape. I don’t have an account with them but I’ve heard good things about people who opened GMAC Bank accounts because of their great rates. I don’t see anything that would stop me from banking with them.

Do you have a GMAC Bank/Ally Bank account? What do you think of them?

Ally Bank Review from personal finance blog Bargaineering.com.