Tip’d, “a community for financial news, ideas, and tips,” is a new socially driven money news site (think Digg or reddit, but strictly for topically focused news on money related subjects like investing or personal finance) that beta launched today. If you’re familiar with social media sites, then Tip’d is going to seem very familiar to you as it builds on the lessons learned from other social media sites. It was all the familiar usability elements you’ve come to expect from social media sites from the “Tip It” buttons below the current Tip count, to upcoming news, commenting, and even a Topple button (to bury a story).

Why use Tip’d and not larger sites like Digg or reddit? If you’ve spent any time on either of those two, or any number of generic social media sites, you’ll notice that the popular topics tend to skew towards stories that are funny, political, or technology related. Money topics don’t really find a home there unless it’s railing against a major corporation for a bonehead move they’ve made or it’s a “helpful tips” type of post that merely touches on money. If you wanted to find good investing or money related stories, you would have to wade through a lot of noise before you reached anything of value. If you wanted straight investment ideas, like FOREX or individual stocks, forget it (unless it was Apple and their product release schedules!). Tip’d steps in to fill that void.

Tip’d is focusing on the following ten broadly defined topics: commodities, economy, green, private equity and VC, stocks, currencies, funds and ETFs, personal finance, real estate, and tech. You’ll notice that it’s heavily skewed toward investment and money management topics and that’s clearly by design. As of this writing, many of the stories on the front page are about the economy and new financial news - you won’t find any of these on the front page of Digg.

Will this succeed? The key to social media sites is in growth. The more users, the more news and the more accurate the voting. It’s the network effect (think telephones - the more people use them, the more valuable they become). Will Tip’d succeed in taking over the financial news social media space? That’s hard to say but if you look crew behind Tip’d, it’s filled with internet veterans (SEOs, social media mavens, etc.) that have more than a few notches in their belt. (just one example is their community director Mu, who is none other than Muhammad Saleem, a Digg rockstar with a submitted story to front page ratio of 33%)

I have a sense that this site could become huge (it’s like betting on the front office of the New England Patriots or the New York Yankees) and it pays to be one of the first movers. (if nothing else, sign up so that if it does make it big, someone doesn’t steal your name!)

547 Ways to be Fuel Smart by Roger Albright was last published in 2000 (with editions in 1990 and 1978, hmmm curious dates they are!) and does in fact contain 547 ways you can get the same out of life but consume less fuel. The book is old, so you won’t find it in bookstores (I found it walking the stacks at my local library), but it contains information that is just as appropriate today as it was in 1978 and 1990.

While you won’t be able to use all of the ideas in this book, some of them will be a bit out of date, you are sure to find some that you can apply. There are five hundred forty seven ways in here pal, you should be able to find one.

Here’s one idea I won’t be using: Albright talks about four huge windows in his home that he loved but were huge energy sinks. They were afflicted with the same condition many older windows are: they were very drafty. He realized that he could live without opening them, because there were other options, so he nailed them shut, caulked the seams, and sealed off the draft. He could still admire and enjoy the views through the windows but he wouldn’t have to pay the energy costs for the draftiness. I won’t be nailing down any windows but it’s a good idea for those who live in older homes.

Which chapter did I like the most? Chapter 7: Rake in Savings From Your Garden! While many of the suggestions in the book are for people with in-ground gardens (versus a patio/planter garden like we do), there are still great ideas in here that we can take away. One section explains the best way to store your harvest to make it last. For example, there are two ways to store and dry herbs. The first is to dry it in hanging bunches in a fine mesh onion bag in your refrigerator for a week. The second is to use a microwave to dry them (wrap in paper towels and zap for short intervals). Both are better than leaving them out in the air because that’s how they lose most of their flavor. I haven’t tried any of these ideas but they seem plausible.

If you’re interested in finding a few new ideas, check to see if your local library has it.

It’s not easy thinking about Wills because doing so forces you to confront your mortality and that one day you will die. However, if you do not take care of this very important piece of business, the State will take care of it for you. In every state there are rules that dictate what will happen to your assets in the event of your death. Unfortunately, they may not match what you’d choose to do with it (chances are they don’t). Creating a Will is one of the most important and significant actions you can do for your finances and shouldn’t be put off. The preparation of Wills is big business too and can cost quite a large sum in lawyer fees, but there’s a way to significantly cut your costs - Suze Orman’s Will & Trust Kit.

My tentative plan is to create a Will with Suze Orman’s system and then get it reviewed by a lawyer. By having at least a draft, you save a ton of money on the hours that would’ve been spent preparing it. What makes this even better is that the kit is free for a limited time (meaning I have no idea how long it’ll last).

Suze Orman recently gave away her Will & Trust Kit to viewers of her show and you can get it by following these instructions:

1. Go to SuzeOrman.com
2. Click on Will & Trust Kit in the left sidebar menu
3. Click on the orange Gift Code button and enter “people first“

And now you have access to the Suze Orman Will & Trust Kit absolutely free.

Account Signup

Account signup was a cinch and took about ten minutes (but I type fast). You’ll have to put in a bunch of information such as your name, SSN, DOB, gender, address, phone, marital status, spousal/partner information (if necessary), value of assets, and answer a few questions about trusts. The system is very TurboTax-like in how it asks you questions rather than simply listing choices.

Throughout the screens, there is audio that you can listen to for additional information and guidance. There each only a few minutes long and I found them very informative. If you’re not in the mood to listen (or you can’t), you can also read a transcript of the audio underneath it.

Handling Personal Information:
With respect to personal information, you have three options to choose from when you first setup your accountL

Complete Save & Protect: All information you enter will be automatically saved.

Limited Save & Protect: The program will not save Social Security numbers or Dates of Birth; all other information will be saved.

No Save & Protect: None of the information you enter will be saved. Each time you use the Kit you will need to re-enter all information.

I chose the second option, Limited Save & Protect simply because I don’t know how secure Suze Orman’s site is. I trust companies like H&R Block and Intuit with that information when I prepare my taxes because they’ve been around longer but I don’t know about Suze Orman (her site does appear secure and I honestly have no doubts about it). Plus, it saves everything except Social Security and Date of Birth, those are easy enough to enter as needed.

Revocable Trust or Only a Will?

Here’s where the “TurboTax” like walkthrough during account signup comes in handy. About 80% through, there’s a question as to whether you want a Revocable Trust or Only a Will? Knowing nothing else and had I been given no guidance, I probably would’ve chosen Only a Will because I don’t know what a Revocable Trust is. However, based on net estate value and guidelines for my state (and other factors), I’ll want a revocable trust in addition to a Will (anyone with over $30,000 of assets in Maryland is recommended to use a revocable trust).

Documents

Following the account signup, I was presented with a list of four documents I’ll need to produce:

• Advanced Directive & Durable Power of Attorney for Health Care
• Revocable Trust
• Will
• Financial Power of Attorney

I don’t know how many documents there are in total but I suspect Advanced Directive & Durable Power of Attorney for Health Care, Financial Power of Attorney, and Will are shown to everyone; Revocable Trust is shown to those who feel their individual characteristics warrant it. (plus, there’s a menu up top and there isn’t much room for any other documents to be listed!)

Will

For the sake of brevity, I’ll only discuss how the Will part works but the creation of the other documents works in the same way. When you click on the Will tab you’re directed to a page that lists all the pieces of a Will. The will consists of the following five parts:

1. Will - “A will is a legal document that states where you want your assets to go after your death and what you want done with your remains.”
2. Letter to Your Executor - “If you want certain items of personal property to be given to specific people, you can simply write a letter to the Executor of your will about your wishes.”
3. Final Instructions Form - “Use this form to let your loved ones know your wishes regarding your funeral, burial, or cremation.”
4. What to Do When Someone Dies Checklist - “Review this checklist now and when the unexpected occurs you’ll know the necessary steps to take to make the proper final arrangements for your loved one.”
5. Funeral Cost Worksheet - “Funerals and burials are among the most expensive purchase older people make. When the time comes to make funeral arrangements, if you only contact on funeral home you may pay too much for services. To help you compare the costs of up to three different funeral homes, we have provided this calculator.”

As you can see, some of the documents are documents you need to create while others are simply useful tools. The will creation menus were quite thorough in what it asked from whether you wanted a traditional Will or a blended family will, how you wanted your remains treated (cremation/burial/donation? embalming?), selecting an executor & an alternate, cash gifts, personal property gifts, contingent beneficiaries, and a few other questions.

After about a dozen questions and ten minutes, I had a draft version of my will. The draft was slick and took advantage of the fact that I was viewing it in a browser because all the important parts were hyperlinked. I could click on it and change information as needed.

But you’re not done… for it to be valid, you need to print it, sign it, notarize it with a witness, and do all the legal legwork involved in making it a valid legal instrument. However, I bet you it’s a lot cheaper to start with this draft than it would be to sit with an estate lawyer and have them ask you these questions. Here’s the first paragraph of the product’s disclaimer (emphasis theirs):

This product provides information and general advice about the law, but laws and procedures change frequently and they can be interpreted differently by different people. For specific advice geared to your specific situation, consult an expert. No book or form of other published material is a substitute for personalized advice from a knowledgeable lawyer licensed to practice law in your state. THEREFORE, CONSULT YOUR ATTORNEY.

So, I would start with this and then talk to an estate attorney to finalize. Heck, it’s free and lawyers are never free.

When HSBC Direct raised their savings account interest rate to 3.50%, I opened an account. I didn’t open it because I was planning on moving funds from a 3.00% ING Direct account, I did it because the cost of opening an online savings account was near zero and because I could then start funneling income deposited into a 0% Bank of America checking account into the new HSBC Direct account. It doesn’t make much sense to move funds from ING or Emigrant to HSBC, but it does make sense to change the destination of funds from Bank of America.

There were a few other non-financial reasons for opening the account. First, there’s no marginal cost to opening another savings account. HSBC has a well known international name and has consistently been among the leaders in interest rates. I would be hesitant to open an account at a lesser known bank. HSBC’s international presence is also a benefit. When we were in China and Taiwan, HSBC was everywhere (along with Citigroup) and that’s a side benefit. Lastly, my mom has an HSBC account, in part because of the China and Taiwan presence, and having that link is convenient as well.

Opening An HSBC Account

The HSBC account opening process is quick and painless (~10 minutes), though it requires more information than most banks because they try to set up everything in one pass. You start by giving the typical personal information all banks ask including social security number. They do a quick inquiry and ask you for three items from your credit history. Then, you get the option of linking a bank account right there.

They verify your bank account by requesting your login credentials and then login. My bank account was linked within seconds (and the transfer was initiated). No more waiting 3-5 business days for two small deposits, the verification process is done right there. Very nice touch.

After about two days, HSBC starts sending you emails (there are quite a few) about your registration, how to log on and set up your account for the first time. Specifically, they’ll email you a link to the Internet Banking Activation page and a registration code, but don’t bother going trying to activate until you get your temporary password by postal mail. Yeah, they mail your temporary password by pony express.

In all fairness, the letter got here pretty quickly. I opened my account on June 4th, received my temporary registration number by email on June 6th, and received the temporary password on June 7th (the letter was dated June 5th). However, because of the mail, any time that was shaved off in the bank linking portion is now definitely lost waiting for a password via mail (probably why they do that). It’s all done in the name of security but it strikes me as a bit unnecessary and overkill.

From here, you go to the activation page, enter in those codes, set up your account access credentials (which includes a username, password, and security key that must be entered by on-screen keyboard), enter two security questions, and you’re in! (whew!)

Bank to Bank Transfers

One of the features of online savings accounts that was once allowed but now stopped by many online banks was the ability to link online savings accounts. I used to have my Emigrant Direct and my ING Direct linked together so a transfer took only a handful of days, but about a year ago they severed the tie and began requiring paper checks to link accounts together.

Well, I was curious as to whether HSBC would let me link up with ING Direct and they did! I submitted a request through the Bank to Bank Transfer online form, HSBC made two trial deposits to my ING Derect account, I verified the transaction and the link was created. It’s important to remember that Federal Reserve Regulation D limits the number of transactions on a savings account to six a month, so I just expended two in the verification process.

Quicken & Money Data Support

Quicken and MS Money data addicts users will be happy to know that HSBC Direct offers support for both applications (for Quicken, you get Windows and Mac version support).

Thoughts

At the moment, I’ve been playing a little with my account and it seems pretty standard compared to other online savings accounts I’ve had. The one noticeable difference is that it’s not as sleek as the ING Direct interface and there doesn’t seem to be any way for me to easily create additional accounts. Of course, only ING Direct offers that option at the moment so it’s not like HSBC is really inferior to peers.

Overall I’m pleased with HSBC Direct so far.

Here’s another, incredibly comprehensive, HSBC Direct review written by your good friend and mine, Cap.

There are thousands of books on investing, a point highlighted in a back cover quote by Peter L. Bernstein: “Books on personal investing are a dime a dozen. But if we add them up, all those dimes come to plenty of money.” It was Bernstein’s contention that Christopher L. Jones’ The Intelligent Portfolio was a cut above the rest with its “strong foundation in theory, the depth of its insights, the power of its message, the clarity of its exposition, and the value of its examples.” That’s quite a laundry list, but does The Intelligent Portfolio deliver? That depends.

About The Author

First, a little about the author. Christopher L. Jones is the Chief Investment Officer and Executive VP of Investment Management for Financial Engines, a personalized investment advice and management service. One of the bonuses of the book is that you get a free yearly access pass to Financial Engines through a code written on a card in the book.

At this point you might think - hmmm, this sounds a little fishy. He’s the CIO and EVP at a generic sounding financial company, what’s the big deal? Hold on, Financial Engines, Inc. provides advisory services to 109 of the Fortune 500 companies and its services touch the assets of 6.8 million employees. As of the end of 2007, they were managing over $16 billion in defined contribution assets on a fee basis. They’re a pretty big deal.

About The Book

It’s not every day you read a book written by an EVP of Investment Management of a financial advisory and management company that tells you question the advice of experts and to approach everything, especially investing, with a very healthy dose of skepticism. From the preface: “… many of the most important ideas from financial economics, promoted by popular media and advertised by financial services firms, are distorted or misused in order to sell more products and services.”

So, given that knowledge, what do we need to focus on, according to Mr. Jones? He lists the following ten basic concepts:

1. Recognize the linkage between risk and reward
2. Avoid being deceived by history
3. Leverage the wisdom of the market
4. Select an appropriate risk level
5. Avoid the perils of stock picking
6. Don’t spend too much on investment fees
7. Diversify intelligently
8. Select funds using relevant forward-looking criteria
9. Understand how to realistically fund financial goals
10. Invest tax-efficiently

At the 30,000 foot level, all those concepts seem pretty straight forward. “Avoid being deceived by history” likely refers to how you shouldn’t base investment decisions on historical returns. “Don’t spend too much on investment fees” probably talks about how you need to check expense and sales ratios on funds and manage advisor fees and such.

The chapter I’ll highlight below was the one about avoiding stock picking since I, like many others, can’t seem to avoid the perils of stock picking (I own shares of Yahoo FTW!).

Avoid picking individual stocks

The crux of the chapter is that for the last few decades, investing the stock market usually meant investing in individual stocks. Mutual funds, index funds (which are mutual funds), and ETFs are all fairly recent investment vehicles. The problem with investing in individual stocks is that it’s risky and investors underestimate the risk and return involved, thus making a disastrous combination. Jones contends that most investors think that the risk of an individual stock is comparable to a mutual fund, despite it being significantly riskier. Financial Engines calculated that, as of Jan 07, the risk level, or volatility level, of the Vanguard 5000 Index fund was 1.5 (a market portfolio has a risk level of 1.0), can you guess the risk level for Dell? How about Pfizer? Or Tivo? (Dell was 3.7, Pfizer was 2.6, Tivo was 5.5) This is expected, I think it’s how much they differ that surprises people.

The three risk types that affect individual stocks are market risk, company risk, and industry risk. With a mutual fund of many companies in numerous industries, company specific risk and industry risk are mitigated and often hedged by other holdings. Every domestic holding faces market risk, but the fact is that the company risk and industry risk effects on one stock are far more significant than on a basket of stocks in diversified markets.

Okay no big deal, we all know one stock is riskier than a fund of the five hundred stocks of the S&P 500. I think my stock pick is a winner and I’m comfortable putting that bet on the table. Jones then did a study where they randomly picked a single stock from each of the S&P 500, S&P 400, and S&P 600 (they represent large cap, mid cap and small cap US stocks), hold it for month and then buy something else, and then see if the stock would outperform its parent index over a 10 year period between 1995 and 2005.

They ran 100,000 hypothetical investors and the results were that the single stock monthly flipper lost. In fact, in the case of the S&P 600 small cap, the median cumulative return was 3.4% vs. the index’s 13.70% return, over 10% different. With the S&P500, 62.80% of the hypothetical investors lost out to the index itself. With the S&P400, 74.10% were losers and with the S&P600, $74.60% were losers. Do you think you’ll be in the top 30% each and every year?

Conclusion

I learned quite a bit about constructing a good portfolio and what the important factors are when selecting various investments. It was fun learning what alpha meant (manager alpha refers to how much a fund manager beats its underlying investment style) and get a few more factors to look at when comparing mutual funds. On the other, it did make a strong, indirect case for sticking to index funds because it mentioned the importance of managing fees very often and how it’s important not to let them eat into your returns.

I may give the Financial Engines a look over the next few months, as it was referenced very frequently in the book (you get a free annual membership with the purchase of the book, so it’s not like it’s a sales pitch or anything), and hopefully they have some more of the same type of interesting simulations and statistic analysis the book carried.

If you’re interested in what a more seasoned investor thinks of the book, here’s Seeking Alpha’s Geoff Considine’s review of The Intelligent Investor.

The College Grad Money Guide has been out less than a week and some first impressions have been coming in. If you are a blogger who has had a chance to read it and wrote a review on your site, please email me. If you are a reader and want to share your thoughts, you can leave them as a comment here or email me.

Nicki, who took a “personal finance” course in high school college (sorry!), sent me this email:

First, I wanted to say that both your blog and the mini-book for College Grads are great! I enjoy reading your blog on a daily basis. And I believe you achieved exactly what you wanted to with the College Grad Money Guide - it outlines the basics for those who are new to the world of personal finance! Your writing style/light humor made it a fun read as well.

In my “Personal Finance” course that I took, we covered a wide range of subjects (the textbook we used was Personal Finance - Turning Money into Wealth by Arthur Keown, 4th edition. We discussed the reasons behind financial planning, how to measure your financial health (using various ratios, etc), understanding the time value of money, tax planning/strategies, cash/liquid asset management (no mention of high-yield savings accounts there!), the use/role of credit cards and open credit, consumer loans, purchasing a home/automobile, life/health insurance, property/liability insurance (ie increasing this as your net worth increases), investment basics, mutual funds (my finance professors all made a huge emphasis on the importance of investing in mutual funds), retirement planning and finally, estate planning. [...]

Everything that you say in the short book is great and to the point. I believe it is a wonderful basic tool for those who do not have much previous knowledge. Some things you mention, which was not covered in my course and I have since learned about via PF blogs include: High-Yield Savings Accounts, Online Bill Pay, the 120 Rule (though we were told that starting young, it is good to go with 100% invested in equity, split 80/20 between domestic/int’l stocks indices by using mutual funds) and how to actually set-up a Roth IRA (though we covered IRAs in a lot of detail and were recommended to set up a Roth). Essentially, the course just went into much more detail regarding all the topics. One topic you cover which we did not was that of student loans (we discussed consumer loans).

Sorry this was so lengthy! Overall, I think the guide is fantastic. I am already passing it on to a few friends who I think would certainly benefit from it. I do not think any changes need to be made at all. Thank you very much for creating it, it is a wonderful introduction on the basics of personal finance!!

Tim, who downloaded the guide for his brother in college, had this to say:

This is a good guide. I’m not sure how much interest a fresh graduate might have in the health savings plans, I didn’t follow through to the site for your write up. I feel like graduates don’t get a good idea of what their “usual” medical expenses will be until they’re out of school for a few years.

I especially liked the section which talked about planning for the big life events, marriage, first home, etc. I know I kick myself for not planning a little more on those things. For guys you’d like to think about having that engagement ring fund ready so that you aren’t stressing about it later when you decide to propose.

Great guide overall. Even for those that have established good habits, a good guide is handy because a whole bunch of new things happen after graduating which you don’t have experience with.

If you’d like to get your copy, the instructions are on the College Grad Money Guide download page. If you’re already a subscriber, just look below for the download link.

If The Consumerist were a religion, Gotcha Capitalism would be its Bible.

I think that every consumer in America needs to read Gotcha Capitalism by Bob Sullivan (he also writes for Red Tape Chronicles). Go to the library, head to the bookstore, jump on Amazon.com, but get yourself a copy. This isn’t a book about investing that appeals only to those with some extra income to invest in the stock market. This isn’t a book about relationships and money. Gotcha Capitalism will teach you how to identify how you’re being cheated by major corporations and what you can do about it. If you spend money, you need to read this book. (I’ve never given a stronger endorsement to a book) Heck, just get it and scan it, you’ll end up savvier than when you started. I bet that once you start reading, you won’t want to stop.

The book has three major sections. Section one describes Gotcha Capitalism, how ten industries are bilking you and every other American out nearly a thousand bucks a year ($946 on average, they calculated, and that on only ten specific industries), and how they get away with it. Section two describes exactly what they’re doing and how to defend yourself against it (and get your money back!). The third and final section is like a tool-kit of consumer tools - a collection of sample letters, emails, scripts, etc. for dealing with companies. In summary, section three is the hammer, section two tells you where to hit them, and section one charges you up with the fury you’ll need to drive that nail home in one shot.

The crux of section one is that the world is separated into myopes and sophisticates. Myopes are the folks who happily overpay for things and don’t comparison shop. Sophisticates are those who are savvier consumers, who read more of the fine print and comparison shop products so that you get a good, if not the best, deal available. I’d say all of you are sophisticates (no I’m not buttering you up, a myope wouldn’t be reading blogs about personal finance, they’d simply trust the first financial planner they met) and we’re the enemy to corporations. The solution to the busting the comparison shopper is to confuse them. While we do have savviness in abundance, we only have so much time. So they force arbitration clauses on us, and hidden fees, and ridiculous early termination charges. They hide where the true cost is (for printers, it’s in the ink, not the printer) so that you can’t accurately comparison shop. They deliberately plan to confuse and befuddle you to the point that you become a myope. Your brain can only process so much! Myopes are awesomely profitable, sophisticates are not… and so the game begins.

Section two goes into every one of the ten industries, and more, they identified (Credit Cards, Banks, Retirement/401(k)s, Mortgages and Rentals, Cell Phones, Home Phones, Pay TV, Internet Access, Travel, Groceries, Gift Cards, Rebates, Student Loans, Everything Else) and talks about all the fees and ‘gotchas’ they employ. A great one they discuss deals with retirement plans and 401(k)s. The ‘K’ in 401(k) stands for kickback. Your HR contacts a third-party administrator to handle the fund options for your 401(k). Your company gets a great deal on the administration of the plan from the third party administrator because the third party gets a huge “revenue-sharing payment” (*cough* kickback *cough*) for including certain funds. They state that 90% of mutual funds use revenue sharing. 90%. Look to the person to your right and then the person to your left, chances are you’re all getting screwed. This section is nearly 200 pages long.

The last section is the toolkit section with sample phone scripts and form letters you can use to battle the fees described in section two. The sample scripts are great because they outline exactly what you need to do and they can help keep your emotions in check. If you’re listening and reacting, there’s a pretty good chance you’ll get angry, flip out, and start screaming at the poor CSR on the other end. By having a script to follow, you can go through it like an emotionless killing machine to get the job done. Plus, yelling never helps.

That’s Gotcha Capitalism in a nutshell. I don’t really want to talk it up any more than I had in the first paragraph so I’ll leave with this suggestion. Give the book a chance by getting it at the library. When you realize you can’t put it down and that it could be a handy reference for a long while, you’ll understand why I was so positive about it.

Last week I wrote about a little preview to the SmartMoney 2008 Broker Survey in which SmartMoney released some preliminary results from their annual ranking of brokerage firms. SmartMoney has published the full details of their report and I’m sad to say that TradeKing did not retain the top spot they enjoyed the last two years (third place isn’t bad!).

Summary

SmartMoney changed the way they listed their rankings a little this year. Last year, they separated “discount” and “premium” brokers. Compare the tables from 2007 versus the tables from 2008, they went from three (premium, full-service, discount) to one (umm… everything).

Of the 2008 top 5 (they were, in order, E*Trade, Fidelity, TradeKing, TDAmeritrade, Charles Schwab), only TradeKing came from the 2007 Discount Brokers bracket and they took the third spot (so one could argue they are still reigning champs of the Discount Broker conference?), the rest came from premium brokers.

The Winner: E*Trade

E*Trade snagged the top spot this year with nearly five stars across the board. They also shared a nod for the best trading tools with TD Ameritrade and topped the list for best banking services (sharing that one with no other brokerage). When you can offer an interest rate of 3.25% on your holdings and not require thousands and thousands in the bank, it’s no surprise they were given the nod there. I personally enjoy using E*Trade for my stock trading because of this convenient link between the bank and brokerage.

Incidentally, in 2003’s rankings, E*Trade scored 9th in the “basic discount broker” category because of their $22.99 a trade commissions. It’s amazing what five years and “listening to feedback” can do for you.

The Top 5

Looking strictly at stars, not much separated the top five. While the criteria were not equally weighted, each one scored five stars in at least two categories and a minimum of three stars in each (in fact, only TD Ameritrade had two three-star categories, every other broker had only one).
Here were the concerns (and my comments) about the top five:

1. E*Trade: None listed, they are so perfect.
2. Fidelity: Commissions were on the high side, at $10.95, I agree. Though I don’t really consider Fidelity a discount broker (in 2007, they were considered “premium”).
3. TradeKing: Weaker fund selection, though they were noted for low commissions ($4.95 a trade).
4. TD Ameritrade: No negatives listed, though they only gained three stars in banking services. Their interest rate on cash of 0.1% was the lowest of all the sixteen listed brokers by far (second lowest was #9 Scottrade at 0.5%)
5. Charles Schwab: Is Schwab really a discount broker? Commissions run $12.95 a pop, hardly “discount” prices, but they had only three-stars in customer service.

TradeKing: 2007’s #1 Discount Broker

They probably got hosed this year by the rejiggering of categories (they had to update their little award picture!) since they were the only one of the top five to have come from last year’s discount category. Of the top ten, they were the second cheapest to Interactive Brokers (a firm I hadn’t heard of before this year’s survey) by a significant margin (after TradeKing, second cheapest was Firstrade at $6.95, a 40% difference). TradeKing did score a ribbon for best customer service and were the only firm to earn five stars in that category.

Zecco: 14th of 16th - Ouch!

What about #14 Zecco with their free trades? (they get a lot of blog press) They scored very weakly across the board for each of the five categories (one star in Trading Tools, Research, and Customer Service) though they received special citation for the worst customer service of the bunch. The $0 per trade offer is a compelling offer but if you’re looking for some hand holding, you won’t get it. Tou get what you pay for ($0). If you only need a broker to enter your trade into the market, Zecco is a good deal; if you’ll ever need to talk to someone about anything… you might as well slide up the commission price chain and go with someone like #6 Firstrade ($6.95 a trade) or #3 TradeKing ($4.95 a trade). You shouldn’t be trading so much that much anyway (though Sharebuilder, the epitomy of buy and hold, took dead last).

There you have it, another year, another brokerage survey from SmartMoney. If you’re looking for a bank and brokerage in one, I personally recommend E*Trade because they make it easy to link up the two (open up one account and you can open the other within minutes online), which can be a good or a bad thing.

Source: SmartMoney’s Annual Broker Survey [SmartMoney]

I don’t know Fred Fuld too well, though we’ve swapped a handful of emails, but I suspect he’s a no nonsense, get to the point, don’t waste your time kind of guy. I suspect this because his book, Investing in Brazil Stocks, is a no nonsense, get to the point, don’t waste your time kind of book. If you want to learn about the major companies of the major industries in Brazil and you had only one hour to do it, this is your book.

The book is organized in a very straightforward manner. The book begins with a discussion of the importance of international markets, of BRIC (Brazil, Russia, India, China), and the rapid growth of industries in those countries. The book then makes a bit of an entertaining digression to discuss a fund Fred created called the Gisele Bündchen index (he has created several of these and the Gisele Bündchen index was featured in Money). The Gisele Bündchen index increased 29% last year (Dow increased 6.5%) and is down only 1.9% this year (Dow fell 5.6%). From there, Fred jumps into the major industries of Brazil in this order:

• Chemical, Energy & Mining
• Bank & Real Estate
• Telecom
• Food
• Utility & Forestry
• Airline

In each industry, Fred outlines a handful of companies in pretty solid detail. For each there is a brief profile, history, recent news, sometimes some trivia and discussion of their financials. Some of the trivia is entertaining to read as well such as Petrobras Energia Participaciones, a leading Brazilian oil company commonly called Petrobras, having some product placement in the yet-to-be-successful Speed Racer movie (that’s polite for ‘it bombed’).

If you are looking to get a comprehensive overview of the major Brazilian industries and their major players, you’ll be hard pressed to find a better starting point than this book. I recognize that’s a very specific need, one that I really didn’t have (but the prospect of a book on Brazilian stocks did interest the trivia side of my brain), but investing internationally is where the investment money will be made in the next hundred years so you might as well start learning now or be relegated to the dinosaurs.

The second edition will be coming out in the Fall.

Many folks in the personal finance community, both bloggers and mainstream media writers alike, have complained that our high schools should be teaching personal finance along with home economics and shop class. High school students aren’t being educated on the intricacies of dealing with credit cards and their fifty page T&C’s or preparing their taxes or even the fundamentals of saving. Well, Don Silver probably heard those calls and, through Adams-Hall Publishing, put together a book called High School Money Book.

The book itself is quite basic but comprehensive in its coverage of personal finance topics. While it’s targeting high school students, it really applies to anyone who is clueless about the breadth of personal finance topics. It discusses things on how to be frugal, handling debt and credit, being philanthropic, preparing for college, banking, paying bills, etc. It’s more a breadth type of book than a depth type of book. By this I mean it covers a lot of topics at a shallow level without going deeply into any of them. While it has been many years since I was in high school, I think this book hits the mark by educating the reader to the keywords they need to know and the processes they need to become familiar with once they start handling money on their own.

The only concern I have is whether high school students care, which is outside the scope of the book, and whether they’d sit down and read it in book form. With as much information as there is on the internet and the younger generation’s savviness with it, I would think anyone proactive enough to want to read something like this would go directly to the internet; those who are less proactive will probably skip it.

Either way, at a little over 150 pages, it’s a good brief primer on personal finance for anyone.