My wife and I still use Bank of America as our primary checking account and I called them the other day to let them know we’d be traveling and how we might be using our debit card abroad. I don’t plan on using it (we have a Capital One card for purchases) but I wanted to ask them about using ATMs abroad.

The past few days I’ve been researching the best way to exchange money, trying to keep the fees low and the accessibility high. I’ve discussed things with my friends over there and the consensus was that ATM was probably the best way. Between ATM access and us simply paying with our 0% transaction fee Capital One card, we should be paying as little in fees as possible.

Global ATM Alliance

It turns out that Bank of America has partnered with a few international banks to form their “Global ATM Alliance.” When we use a Global ATM Alliance ATM, we avoid a $5 access fee. If we use any old ATM, we would be assessed a $5 access fee. Otherwise, ATM transactions incur a 1% transaction fee to cover the exchange of currency.

Here are the partners in the Global ATM Alliance:

• Barclays (United Kingdom)
• BNP Paribas (France)
• China Construction Bank (China)
• Deutsche Bank: (Germany)
• Satander Serfin (Mexico)
• Scotiabank (Canada)
• Westpac (Australia and New Zealand)

Call Your Bank

If you’re traveling abroad, call your bank to see what your international options are. I should have done this from the start, rather than poke around and waste time researching the best option. One simple phone call would’ve yielded the simple advice of “Try to find a Barclays, you can use their ATMs.” The 1% transaction fee, which covers the currency exchange, is probably the leanest you’ll ever find. You will always have to pay a fee to exchange money and it’s either listed as a fee or integrated into an exchange rate that doesn’t match the prevailing rate (this is how credit cards used to “hide” the currency transaction fee and the reasoning behind the foreign transaction fee lawsuit).

Time to pack for London!

(Photo: funkypancake)

Do you ever feel like you don’t have a good handle on how much money is worth? I mean really worth, in terms of sweat and blood, rather than how much stuff it can buy? With credit cards and electronic bank statements, the true cost of money is often difficult to truly comprehend because there are so many abstractions. Money is an abstraction of labor and effort.

You earn money through labor. Some labor is hard, like in a factory or a mine, while others are easier, shuffling papers in an air conditioned office; but both types require time and energy and both result in money. The point is, spending money, rather than bartering labor for goods and services, abstracts away the value of that money and it sometimes helps to put things back into focus.

So, why don’t we?

Let’s put things back into perspective by listing popular and common products in terms of minimum wage labor hours. Using the federal minimum wage in the United States, at $6.55, we calculated how much stuff cost in minimum wage hours.

Some of the more surprising figures? That $443k party AIG threw for their salespersons cost 67,634 minimum wage hours. Lehman CEO Fuld’s cash compensation from 2000 to 2008 was $500 million - or 76,335,878 minimum wage hours (26,142 minimum wage years, if 8 hours are in a day). Finally, that $700 billion bailout package will cost 36,599,394 minimum wage years. Yikes.

We made some assumptions in compiling this list. One is that a day consists of eight hours. Another is that while the cost is in post-tax dollars, minimum wage is in pre-tax dollars (i.e. the employee still has to pay tax on the $6.55/hr wage), so things really cost more in terms of hours than what is listed.

I was talking to reader Mike Cannon, who lives a frugal lifestyle and runs a small business called Ascent Solutions Group in Maryland, about Aldi (more on them when I get a chance to check one out) when the conversation shifted off to an idea one of his professors at Maryland once told him about class (as in middle class, upper middle class, etc). I think it’s a very different and helpful way to look at class and how it should be defined, rather than how it is defined today (i.e. poorly).

His professor said, and I’m paraphrasing, that it’s far better to define class by looking at their financial planning time horizons than anything else. The higher you go in the class spectrum, the farther out the time horizon is.

At the low end of the extreme, the extremely poor are thinking only as far as their next meal. As you move up the spectrum, those living from paycheck to paycheck have a time horizon of two weeks (or their paycheck frequency). In both classes, the concept of saving is difficult because income is less than or barely meeting their expenses.

The middle and upper middle class are looking a few years to forty years into the future. They’re contributing to their retirement plans, contributing to their kid’s 529 plans, saving for their first/next home, or saving for their first/next car. Saving is possible here because income has exceeded expenses to the point where you can save for the future.

As you get even farther up the class spectrum to the upper class (and whatever is past that), you begin seeing people planning for their grandchildren and their grandchildren’s education. Once you have met your needs, you begin thinking about your future and your children’s children.

I think that’s a far better way of defining class than any income ranges or net worth figures. It’s about mentality, rather than income and I believe it’s a far healthier approach towards class than talking income. What does it matter being upper class if your expenses force you to spend the vast majority of your income? One stretch of bad luck and you could lose it all (just think about any number of bankrupt celebrities) and then you’re no “better” off than someone in a “lower” class. In fact, I would say that the stress of living on the edge of disaster is far worse than the enjoyment you get out of living in a huge house or driving half a dozen fancy cars. I’d much rather be happy living the simple life within my means than feeling the pressure to produce to sustain an expensive lifestyle. I suppose that’s why they say money can’t buy happiness.

What do you think about this definition of class?

(Photo: indieink)

The U.S. Mint announced the four designs of the new penny to debut next year on Abraham Lincoln’s birthday, February 12th. They will be rolled out in three month intervals, starting Feb. 12th, with a Lincoln commemorative silver dollar released in 2009 as well. It’ll be the first time in fifty years that the penny will have changed and each of the four rear designs will show milestones in his life:

Log Cabin design, his birthplace

Indiana rail splitter design, where he worked as a young adult

Illinois State Capitol design, where he served as a representative

Half-finished US Capitol design, representing his work to build/preserve the Union

If you’re a fan of trivia, you’ll be happy to learn that Abraham Lincoln was the first person to appear on a regular US coin in 1909 (the penny of course). Here are 49 other fun facts about money.

Lastly, some want to see the penny abolished all together!

New Lincoln penny designs unveiled [CNN Money]

I’m not asking because I want to rob you, though if you carry more than a grand I would be tempted (just kidding! ), but cash seems like such an outdated way to stay financed.

How much do you have on you right this very second? I just checked my wallet and I have $142, which is far higher than what I normally carry. It’s that high because two weekends ago we took a trip to Ocean City, MD with some friends and I did one of those “pay with credit card, take the cash” moves at a restaurant (Citi mtvU offers 5% cashback and I have student loans to pay off!) so that boosted the amount.

A few months ago, I remember reading an article in a major men’s magazine that talked about how carrying a fat roll of cash gives you a sense of power, confidence, and bravado that you don’t have carrying a couple pieces of plastic. I believe the author likened it to a power suit. Anyone who has put on a nice suit can attest to this. Suits boost your confidence because you look good in them. You look professional, smart, and powerful. Does a roll of money do the same?

Normally, I don’t carry much cash on me, maybe forty or fifty bucks at any one time. I don’t really see the advantage in carrying a lot of cash. Plastic offers so many more protections on so much more money that credit cards are really my primary source of funding. If you lose cash, it’s gone. If you lose a credit card, you cancel it and get a new one. The combined credit limits on the cards in my wallet is easily over ten thousand dollars but I would never ever even consider putting more than a few hundred in my wallet.

How much cash do you have on you right now? How much cash do you usually carry on you? Why so little or so much? Do you think I need to carry more or less? Do you think I’m insane?

I listen to the American Public Media’s Marketplace shows almost every day (this was before Lynnae, Steve and I were on last week, which was really cool!) and a few months ago there was a personal finance segment, in which a caller asked about annuities in their IRA. About halfway through the answer, the personal finance expert, Chris Farrell, describes “rich” as someone who has maxed out their IRAs ($5,000/yr) and their 401(k)/403(b)s ($15,500/yr) and still has discretionary income to contribute towards investments.

I thought it was a great definition of financially rich because it was both concrete (gives a set dollar amount and criteria) and financially responsible in its message (meaning rich people should max out their IRAs and defined contribution plans). Of course, rich is a much broader word than dollars and cents and I would extend that definition to include some comments about happiness, family/loved ones, and fulfillment (basically fulfillment of Maslow’s entire Hierarchy of Needs, in a sense), but I want to leave that out of the discussion for now).

I asked some bloggers earlier this week what it meant to them and here’s what they said:

• Plonkee
• One Caveman’s Financial Journey
• MoneyNing
• Bible Money Matters

I’d like to know, how much is “rich” to you?

(photo: christinasnyder)

My wife and I are avid fans of Star Trek (no surprise there right?). Having grown up watching Star Trek: The Next Generation and continuing on to Deep Space Nine and even a little Voyager, but recently we’ve been watching the four seasons of Star Trek Enterprise. It’s the one with Scott Bakula as Captain Jonathan Archer of the NX-1 Enterprise (there it is to the right) and the only one set in the near future. I have no idea how the seasons were received when they aired but we’re really enjoying them because it’s not set hundreds of years into the future, only a hundred and fifty. In future Earth, we’ve developed warp drives, transporters (though we’re not comfortable using them), and have made contact with alien species (no universal translator, just a really good translator).

One of the interesting aspects about Star Trek is how it treats money. Even a mere 150 years into the future, there is no concept of money. People do their jobs because they take pride in their work, satisfaction in their accomplishments, and work hard because they don’t want to let down their peers or their society but receive no monetary compensation. While they get all of their needs satisfied (food, shelter, entertainment), no one is saving for retirement because there’s nothing to save.

It was always difficult for me to see the logical jump from society today to anytime in the future where money is obsolete. Entire industries exist solely because money exists (mortgages, finance, banking to name a few) and you can bet your last dollar they’ll do anything it takes to make sure money keeps on existing. So how are we supposed to get from our money driven world to one where money has no meaning?

By having social norms overtake market norms. It’s an idea I first read in Predictably Irrational. In one of the chapters of Predictably Irrational, Dan Ariely talks about how in the workplace we’ve replaced a bit of the market norms with social norms. In the days of Ford and the assembly line, workers punched in and punched out. They worked for the paycheck, trading in their time, effort, and expertise for money. It was a clear trade, punctuated by the sound of time card machines. As we’ve moved away from a labor based economy to a service based economy, social norms have begun to replace market norms.

I have friends who work 40+ hours a week but are compensated for only forty, the extra being spent “to get the job done right.” I routinely worked a few hours over forty myself to get the job done because I didn’t want to let my team down (I was very fortunate to be on very strong teams that didn’t find ourselves under the gun or behind on deadlines). I didn’t work those extra hours out of the goodness of my heart but I also didn’t do it for direct compensation. I worked those hours because I knew I had an obligation to both the project’s clients and my teammates. It was the social norms, not the market norms that compelled me, and so many others, to work without direct monetary compensation.

It’s an interesting idea and while it clearly doesn’t explain everything, it’s the first time I’ve read of an idea that will even take us in that direction. Eventually social norms can overtake market norms, a social support infrastructure will be put into place, and we’ll have abolished money, developed warp drives, met alien species, and find ourselves cruising among the stars in one of these:

(Both photos by anthonygrimley)

Did you know that paying cash actually costs you more than paying with a credit card? Did you know that if you are pay in cash, you end up subsidizing the transaction fees for credit card payers? Unfortunately, it’s entirely unavoidable, hidden, and no one is at fault other than good ole Daddy Economics. Let me explain.

Imagine you are a store owner and on any given day, 50% of your customers will be paying with a credit card and 50% will be paying with cash. Credit cards, while convenient, represent an added cost of around 3-4% for you, the store owner, and you’d love to be able to pass that additional charge onto the credit card paying customer individually. Unfortunately, you can’t because of merchant agreements and, more importantly, because you can’t identify the credit card paying customers ahead of time.

The end result is that you, as store owner, consider credit card processing fees an expense and build it into the cost of everything to everyone, including cash customers. The 50% of your customers paying cash will end up subsidizing the transaction fees of the other 50% of customers that pay with a credit card.

From the perspective of the shopper, this means that every time you pay cash, you’re paying a little more than what you should’ve if credit card didn’t exist. While you can’t recoup the costs simply with a 1% cashback card, you certainly can cut down the premium by at most a third of a percent. Ultimately it’s the credit card company that benefits from the added convenience of everyone swirling around credit, to the tune of 3-4%.

This is an economics concept known as an externality, though they’re often best used to describe other scenarios as well (such as how the true and total cost of driving should include pollution and its impact on residents living near highways). The true cost of using a credit card isn’t actually felt by the card user or the store owner, it’s felt by cash paying customers even though they aren’t aware of it.

Interesting huh?

(Photo by phatcontroller)

Check out the latest super-anti-counterfeit bill to hit the streets, it’s none other than the fiver and it debuted today with much fanfare over its added security feature and that humongous purple FIVE located on the back (picture below). Many of the added security features come from higher denominated bills (such as more watermarks and a security strip) and I was surprised that they would revamp a $5 with these security features, but what do I know. Here’s the back of the bill.

I’m a fan of the increased use of microprinting, where small, difficult to reproduce, text is repeated in numerous places. On the front, Five Dollars” is written inside the left and right borders. E Pluribus Unum (”Out of Many, One.” in Latin) is printed at the top of the shield in the Great Seal. USA is printed between the columns of the shield. Finally, on the back, USA FIVE is printed on the edge of the purple 5.

One cool thing I didn’t know was that the little yellow “05″s are arranged in a EURion constellation. Many color photocopiers will refuse to copy a document if it detects a EURion constellation pattern. Here I thought the “05″s were just randomly scattered. Many currencies use this EURion constellation pattern.

Now, I’m not a huge fan of the big purple 5 but it’s said that it is designed that way for the visually impaired, what do you think about that purple 5? Ugly? Pretty?

(Images from Wikipedia)

Cash, cabbage, paper, scratch, scrizzle, dineros, dough, whatever you want to call it, it’s all means the same - it’s cold hard cash. There is plenty of useless and fun trivia about currency that is certainly fun to know and you guessed it, I’m going to give you at least fifty fun facts about currency, mostly US facts but a sprinkling of international ones near the end. The first bunch have to deal with US money history in general such as the creation of the Mint and the Bureau of Engraving and Printing, then moves onto specifics about the bills and coins such as what they are made of. Then we move onto some of the interesting facts that deal with counterfeiting. The 50 facts end with a few facts on what you should do with damaged or mutilated currency and then a few international facts for those of you looking to get an edge in Trivial Pursuit. I hope you enjoy it!

Oh, and in keeping with the tradition of these 50 fun facts posts, I added a few bonus facts so there are a few more than 50 in the list. If you enjoy this list, you might enjoy 50 Fun Facts about Credit Cards and 50 Fun Facts about Banks.

US Money History

• The Massachusetts Bay Colony was the first the issue paper money in the American colonies in 1690.
• The Bureau of Engraving and Printing of the Department of the Treasury didn’t become the sole producer of currency until 1877.
• In 1894, the production of postage stamps was added to the responsibilities of the Bureau of Engraving and Printing.



• The Mint didn’t become part of the Department of the Treasury until 1873, before that they reported directly to the President.
• The Mint is responsible for producing military medals (such as the Silver and Bronze Stars, the Purple Heart and the Navy Cross) as well as the Congressional Medals.
• In 1865, the Secret Service Division of the Treasury Department was created to suppress counterfeit currency. Two years later, their mandate was expanded to include “detecting persons perpetrating frauds against the government.”
• As an aside: the Secret Service didn’t start informally protecting Presidents until Grover Cleveland in 1894. They officially began protecting Presidents until 1913 though they received funding (they received funding and began protection Presidents as far back as William McKinley in 1907).
• Legal tender refers to how currency can be used to satisfy “debts, public charges, taxes, and dues” but no one is required by law to accept it.

Bills & Coinage Facts

• According to the Treasury Department, there are three reasons why US currency is green (the “greenback”): 1) That color ink was readily available in large quantities back when they were first being printed; 2) It is highly resistant to chemical and physical changes, and; 3) it’s a color that the public identifies with strong and stable credit.
• Most coins have a copper filling with another metal on the outside, usually a mix of copper and nickel (75/25). Pennies are made of zinc coated in copper and nickels are entirely that copper and nickel mix.



• In 1943, pennies were made of zinc coated steel to conserve copper for the war, it gave them that silverly look.
• Between 1942 and 1945, during World War 2, nickels didn’t actually have nickel in them. It was a mix of copper, silver, and manganese.
• With the exception of WW2, nickel has stayed the same material composition since it was first designed in 1866. It’s the only coin that has stayed the same.
• Until 1804, none of the non-copper coins made in the US had their value engraved on it, people just had to know based on size. It wasn’t until the quarter in 1804 were the values engraved on the coin.
• The first batch of coins produced by the Mint was 11,178 copper cents in March 1793.
• “In God We Trust” was first put on coins in the Civil War but didn’t make it onto all coins until 1955.
• “E Pluribus Unum” was first used in 1795. “E Pluribus Unum” means “One from Many,” one country from many states.
• Abraham Lincoln was the first person to appear on a regular US coin in 1909.
• Queen Isabella of Spain was the first woman to appear on a US commemorative coin in 1893. She’s also the only real person to appear on a coin produced by the Mint.



• In general, living people don’t appear on US coins but Calvin Coolidge in 1926 became the first President on a coin while he was still alive.
• To determine which Mint facility produced a coin, look for an engraved letter on the front. “P” means it came from Philadelphia, “D” means it came from Denver, and “S” means it came from San Francisco.
• The lifespan of a coin is thirty years, the lifespan of a bill is a mere 18 months.
• Bills today are 2.61″ wide by 6.14″ long with a thickness of 0.0043″.
• Bills are made of a cotton (75%) and linen (25%) fiber mix known as “rag paper.” This is distinctly different from regular paper, made from the cellulose in trees. This helps the paper withstand wear and tear, like when you accidentally wash a hundred dollar bill in a pair of jeans!
• Nearly half the bills printed by the Bureau of Engraving and Printing are one dollar bills (~45.47%)
• 95% of the bills printed each year are used to replace bills already in circulation.
• Each bill is supposed to weigh about a gram, so there are 454 bills per pound. A million dollars in $100 bills would weigh a little over twenty-two pounds. If you used $1 bills, it’d be about a ton in weight.
• If you instead used pennies, a million dollars would weigh around 246 tons!
• If you were to stack a million $1 bills, it would be around 361 feet high.
• Only one woman has ever appeared on a bill… can you guess who it was? Martha Washington appeared on the $1 Silver Certificate of 1886 and 1891, then appeared on the back of that bill in 1896. Not a single woman since!
• It costs about 6.2 cents to print each bill (2007).
• The cost to make each coin varies because of the material inside of them but a USA Today article puts the price per penny at 1.23 cents and the price per nickel at around 5.73 as of mid-2006.
• During the Civil War, 3 cent bills (”fractional currency”) were printed because coins were being hoarded for their intrinsic value. The largest denomination bills were the $100,000 bank transfer note in 1934.

Counterfeiting Facts

• Do you know why there are ridges on the edges of coins? Back in the day, when coins were made of gold and silver, people would shave off or clip the edges of the coins and then save the shavings for later. While illegal, it was difficult to catch because coins were always irregularly shaped because of poor manufacturing so the ridges helped in detecting that.
• It wasn’t until 1877 that Congress passed a bill that prohibited the counterfeiting of any coin, gold or silver bar.
• It’s been estimated that between 1/3 and 1/2 of all bills in circulation after the Civil War were fakes! (this was the impetus for creating the Secret Service)
• In 1980, 777,957 $50 and $100 were passed and seized. That number increased to 1,240,840 by 1990. (Federal Reserve Bank of San Francisco)
• In 1994, with the Crime Bill Public Law 103-322, Title 18 USC Section 470 was revised to state that “any person manufacturing, trafficking in, or possessing counterfeit U.S. currency abroad may be prosecuted as if the act occurred within the United States.”



• Counterfeiting money is a felony, convictions can result in prison sentences for as long as 15 years and fines of up to $15,000.
• If you counterfeit a coin worth more than 5 cents, you’re subject to the same laws. If you alter an existing coin, you are violating Title 18, Section 331 of the USC. The crime is punishable by a fine of up to $2,000 and/or prison time of up to 5 years.
• If you want to print funny money, make sure it’s a different size (50% larger or 25% smaller). If you print only in black and white, that’s okay too as long as you satisfy the size change.
• Counterfeit bill detecting pens work by reacting with the cellulose found in regular paper. Since bills produced by the government is made on this special rag paper, it doesn’t react in the same way to the pen.
• The ink used to print the bills are magnetic and so vending machines use that as one of the means of detecting whether a bill is legitimate (since it can’t rely on many of the usual methods people can such as touch).
• The Treasury Department is looking to enhance the designs of bills every 7-10 years. This began with the $20 bill in October 2003.

• On March 6th, 2004, Alice Regina Pike tried to pass a $1,000,000 bill at a Wal-Mart in Georgia (the largest bill in use is the $100). She might have gotten away if she only used a $200 bill!

Damaged/Mutilated Bills & Coins

• If you have a damaged bill and you have more than half, you can bring it to a commercial bank to be replaced. The bank will then send it to the Fed along with other damaged and worn bills.
• If it’s damaged and you have less than half, you’ll have to send it to the Treasury Department.
• Damaged coins? Same process, except the bank goes to the Mint.

International Money Facts

• Largest numerical denomination bill ever is 1 Milliard Hungarian Pengő (1,000,000,000,000,000,000,000) in 1946. (Wikipedia) It was only worth twenty cents US! Hyper-Inflation is rough.
• The oldest currency bills known to have existed come from China and the Han and Tan Dynasties. The earliest bills to still exist (as in not disintegrated) come from the Ming Dynasty and were issued between 1368-1399.
• The largest bill by size is the 100,000 Piso of the Philippines according to the Guinness Book of Records, it’s about the size of legal paper.
• In 180 other countries, differently denominated bills are different in either color or size or both. In the US, all bills are of uniform size and similarly colored - an issue that has been taken up with the courts lately.

If you thirst for more facts, there are plenty at the Bureau of Engraving and Printing. Also, if you’re a fan of looking at old bills, you can check out this incredible American Currency Exhibit provided by the Federal Reserve Bank of San Francisco.