Chile Forum

FYI, I just called eTrade. They offer the two-factor authentication feature I've mentioned (Schwab and PayPal). It costs $25 if your account balance is less than $25k. I was told that after obtaining an account and signing in, there's a link at the bottom of the page concerning security/online security, and from there a link for what they call "eTrade Digital Secure ID." (All these places have different names for it. It's difficult to find out if someone has it because you never know what it's called. Sometimes it's called "passcode" or "secure token").

Also, the High Yield Savings account doesn't come with an ATM card. Only the checking account. So, it's a $5k minimum balance. (Savings is $1k. I was hoping that would be a less-expensive way to get an ATM card.).

Mark

El Zorro wrote:how high is the High Yield Savings?

3.15%. eTrade's checking is 3.25% (with $5k US minimum balance). Charles (admin) says he gets 0% on their ATM card. But, I've detected eTrade has tiered pricing. If Charles has a big balance there, they may waive things for him which they wouldn't for someone with just the minimum balance. (They advertise 1% on their ATM card, which isn't bad.).

You can get 3.3% at Washington Mutual and $0 minimum. But, their ATM card is no good. It has a 1% international fee. But, they told me today it's going up to 3% in June. WaMu's good to have because they have free outgoing foreign wire transfers. But, you have to initiate it from a local branch office. I need to talk to them about how to initiate if when you're outside the country. Unlimited domestic ACH transfers.

Bankofinternet.com looks good if you're over 40. They pay 3% or 3.3% depending on whether you're 40+ or 50+. They're one of the few with a 0% ATM card. And no minimum balance. But, no international wire transfers. And, no way to initiate domestic ACH transfers. You have to initiate it from a bank that has that feature in their online banking interface. Most do (including WaMu and PayPal, which is free). They allow unlimited ACH.

Schwab checking is paying 2%. But, you can open a brokerage account with the checking account, no minimum for either, and do instant transfers to the brokerage account, putting money in the money market fund ($2500 US minimum balance) which is paying something like 2.8%. Also the total market bond fund which is paying 4.8% (but, bond funds go up and down in value. They're a longer term, fixed-income investment). Schwab's ATM card is one of the 0% cards. And, they have the "secure ID" two-factor authentication thing. $25 for outgoing international wire transfers. Initiated by faxing a form. Unlimited domestic ACH transfers.

BankDirect.com is reported to have the desirable 0% ATM card. But, they don't pay good interest. I don't know anything else yet (ACH, wire transfers). You'd have $100 US sitting there earning nothing just to have access to the ATM card (maybe wire transfers too).

Capitalone.com is paying 3%. They're reported to have the desirable 0% ATM card. No minimum balance. ACH withdrawals limited to 6 per month. Not sure if this applies to ATM withdrawals too. If not, it's not a problem because you'd be doing ACH deposits to get access via the ATM. Haven't investigated anything else yet (wire transfers, etc.).

evergreenbank.com. I think "EEUU" said they have free outgoing international wire transfers. They don't pay good interest. But, reportedly a 1% ATM card which isn't bad. It could be worth having since they have $0 minimum balance.

I don't believe there's one perfect place. If you have a lot of money to let sit, eTrade might be best. But, I think it's good to get a few of these (which don't require big commitments) because things change over time (as evidenced by WaMu's ATM card going from 1% to 3%). I picked up a bankofinternet account this morning. It's free. $50 to open the account, but $0 minimum for ongoing. I joined the 50+ club a couple months ago. So, I get 3.3% interest if I want to park some money. (Five more years I get the Senior's discount at Denny's. That's something to look forward to.).

El Zorro wrote:BTW, did I miss it? What is your connection with Chile, since you seem to live in Arizona?

Sorry. I should have posted to the new-user intro forum. (I'm not good with that.). I am married to a Chilena. We married in Chile. I'm planning to retire early (in Chile) in a year or three. Otherwise, my work lets me work remotely for months. So, I go to Chile for 3 months at a time. I stay around Santiago.

Mark

admin wrote:So, when etrade opened their bank division they where trying to lure new customers in and I believe I signed up under a different agreement.

Earlier I said the High Yield savings doesn't include an ATM card. But, I noticed they have another savings account called Money Market Savings. It comes with the ATM card. It has the same $1k US minimum balance. So, that might be an option for anyone who wants to see if they can get the 0% ATM fee you're getting. (The MM savings doesn't pay good interest. And, it looks like they penalize you if you close the account within 4-6 months.).

Mark

El Zorro wrote:Currently I’m bleeding awfully at about %2.5.

Don, 2.5% isn't bad for a cash investment that's FDIC insured. When you said you were getting a bad rate, I thought you meant 0.25% like a lot of traditional banks pay on savings (and 0% on checking).

The highest yield short-term CDs are paying 2.7-3.0%. (A month or two ago they were 2.3-2.5%.). But, those are the highest yield. At some banks you're lucky to get 2.1%. (BTW: That's another thing I like about Schwab. They have a large selection of CDs from different banks. So, you can get the higher-yields without opening accounts at those banks. The only thing I'm not certain of is whether the FDIC insurance flows to you or Schwab.). Money Market funds (MMF) are in the 2.3-2.8% range. Not insured. But, more liquid.

I don't understand some of these banks offering 3.0-3.4% in savings and/or checking. I always think they're subsidizing the rates to get new customers, and won't last forever (beating MMFs and CDs). It doesn't make sense that they'll pay more than they would by issuing certificates of deposits, and incur the expenses of managing pesky customers. But, they've been doing it for 2-3 years.

Until recently there's not been much variation in MMF yields, except between the ones with low and high minimums (to reduce fund expenses). But, lately some of them have taken a hit. During the recent economic bubble some funds began investing in higher-yielding products like Auction Rate Securities. These were short term contracts where people with a lot of money (and corporations) could park their cash for 7 to 90 days, and get high interest rates. When the credit crisis hit, the market ceased to exist. ARSs lost 30% of their value. A lot of speculation that MMFs would violate their self-imposed rule to maintain a $1 NAV price. I think what they are recouping their losses through lower yields, and basically subsidizing the fund's share value so they don't "break a buck." If the share value dropped below $1 nobody would ever put money in that fund again. It's just sleight of hand.

Without knowing your particular circumstances, most people should be diversified between bond funds, stock index funds (including international funds) and different cash investments. The percentages change based upon age, goals, etc. If you do that you tend to get 6-8% annually over the long haul. But, some of those things are more volatile. Something like stock funds can lose 30% in one year, taking 3-5 years to recover. That's why the allocation between those things is so personal. But, if you're 30-40 years old, with all your money in a savings account. That's not smart. (Someone in that position can withstand more volatile investments for the sake of longer-term growth.). Missing 1/2 percent isn't the problem.

I hope I'm not talking down to you. I'm not sure what you're experience is.

Mark

El Zorro wrote:Mark, until now, I was just accumulating some capital, but since I’m planning on retiring this year, I’m trying to get educated on how to invest that capital so I can live off it, at least until SS age, eight more years.

Are you saying you plan to consume all capital so you can retire early, and then live of Soc. Sec? If you have longer-term cash management requirements I can give you some ideas from what I've learned. (I'm not trying to solicit you to reveal personal info. If you want to PM me you can.). If not, I probably don't have to remind you about the stories Soc. Sec. benefits will be reduced (or, some even predict eliminated) over the coming years.

El Zorro wrote:Vanguard,

Vanguard's great. They're famous for having the lowest fund expense ratios available to individual investors. Fidelity is a close second. The only downside (when I looked a couple years ago) is that they tend to have high minimums. Like, $5k US initial investment to get into a mutual fund. That's how they keep their expense ratios down. But, it makes them less useful for people just starting out, with modest funds. Also, they (at least Vanguard) have a lot of fees unless you have a lot of money with them. They have three levels of accounts (voyager, sojourner and vagabond, or something like that . Those classes of customers were always off-putting to me.). The people in the lower category get hit with sizeable fees which probably diminishes any gains they make from the lower fund expenses.

(Pumping Schwab again. I have no affiliation except as a customer.). I like Schwab because they have very low minimums. $100 US initial investment, $1 subsequent investment. That's almost unheard of. With a $0 minimum to open the brokerage and checking accounts, literally someone with no money could get started with long-term savings. With those low minimums I'd expect them to have high expense ratios. But, theirs are consistently well below the category averages. (If I had a lot of money, I'd probably switch to Vanguard to get the lower expenses.).

El Zorro wrote:On another front, re your “little book” where you keep the answer to the “secret questions,” I’m guessing you’re talking about an actual notebook. If that’s the case, couldn’t you just keep an encrypted file on your computer?

It's a physical note book. I've considered loose-leaf pages in one of those pocketed file folders. But, the little notebook looks less important. Encryption can be broken with brute force attacks, depending on how complex your passphrase is. The more complex (random characters) the easier to forget. (Although, see http://www.ironkey.com. It has hardware encryption built into the USB drive and will fill the drive with binary zeros if someone enters the wrong passphrase ten times in a row. The only thing better would be if it exploded. You could use a very simple passphrase that couldn't be guessed within that number of tries.).

Another concern would be the fact that even flash storage wears out. That's why flash file systems are designed to write to different areas of "disk," so they don't bang away on the same area as you add and remove files like a magnetic disk. (I think it's a "file system" controller built into each flash device, whether a CF card or pen drive.). But, eventually they fail. It would be problematic to lose all the secret responses. Especially in a different country.

I guess you could keep an encrypted file on your normal hard disk. Name it something misleading (like keeping it in /windows/system32). As long as you take backups (and keep a few backups around) you'd be safe. I just like paper for this. If all else fails, I have the paper (unless a house fire).

Mark

El Zorro wrote:I just meant that SS would be a cushion.

It's difficult to know you're situation. And, I don't want to solicit details in a public forum. But, from things you said earlier it sounded like you might have everything in cash. And, it sounds like you expect some of that money to last your life. If that's true, financial planners would say it's a bad idea not to be diversified into bond and stock index funds for that amount of cash that you don't expect to touch for a few years. I.e., even entering into retirement (especially early retirement) a person can withstand more-volatile investments to get the higher historic averages they yield. A good way to think of it is to categorize your money into short- (1-2 years), intermediate- (2-8 years) and long-term (8-20 years) buckets. Each would be allocated differently. Maybe the short-term would be savings and laddered CDs (so you get average rates, and liquidity due to constantly maturing CDs). Intermediate might be laddered CDs and a combination of short- and long-term bonds. Long-term would be long-term bonds and stock indexes.

How much in each bucket, and the percentage of allocation in each is a matter of personal preference. But, 100% cash for 20 years is as bad as the retiree who puts all their savings into the stock market. So, that's all I have to say. I don't want to get into your business or cause you to talk about anything publicly that I wouldn't. But, if you're 100% cash, you might want to talk to financial planners. They'll talk for free. You can get ideas of how they'd manage your money (for a fee). After getting ideas, it's something you can easily do yourself. If I've misunderstood, I apologize if it sounds like I'm speaking down to you. Just based on what you said so far, I wanted to say the above.

El Zorro wrote:A for the “notebook” deal, the obvious question is: what if you lose it? I think that encryption is much safer,

I don't carry the paper notebook around with me (unless I go on a trip). But, you're right. Using TruCrypt (free) it could be safe to keep the info on my computer, keeping multiple backups, etc. I just like paper. If anything goes wrong, I've always got the paper. The house could burn down. But, if it was on a computer the computer (and backups) would be gone too.

El Zorro wrote:I’m a fanatic about backups. I wrote a backup/cloning utility in VB some years ago that I’m constantly improving.

I like Clonezilla (Google for it). It's free and does full image backups to an external USB drive. I like to take a full image every 1-3 months. In between I just drag/drop my data files to an external drive and zip them into one file. I have to impose a standard upon myself so I have consistent things to drag/drop.

If you want to use Clonezilla, it boots from a Linux Live CD. It can be perplexing to figure out. I can tell you the menu items to choose. It's just 5-6 things and you get a full image. You can write the image to another drive. Plug it into your computer and boot. Very handy to be able to get back to your system in the event of a hard drive failure (without spending days reinstalling everything).

El Zorro wrote:That’s how I discovered that the firewall that was supposed to protect me, actually kept track of what I was doing and logged too much info about my Internet activities. I wouldn't be surprised if all of them do that.

Maybe software firewalls. A router won't.

Mark

El Zorro wrote:I use partitions and different hard drives to scan passive OS installations for files that are harmful to my system or my privacy.

Don, earlier I mentioned Puppy Linux. I haven't looked at it for a couple years. For the last couple days I've played with the new 4.0 release. You might want to look at Puppy. It doesn't install to a hard disk like a normal OS. It installs to RAM from "squashed" files. This makes it more secure because if a hacker gets to your hard drive, all they find are .sfs files. If the intruder understands Puppy and squash files s/he could hack the squash file and modify something in /sbin or /usr. But, when you shut down, Puppy rewrites the .sfs files using what it has in RAM (overwriting whatever the intruder did).

That's a perfect environment to boot into from a USB drive (at untrusted computers). Another alternative is to run one of these within VMware Player (on Windows) just for web browsing. VMware can be configured to forget everything from a previous session each time it starts. There is a tool to mount VM virtual disks from Windows. Which means files could be transferred in/out of the VMware/Puppy environment. Or, have two virtual disks. One for use by Puppy as it's "system." And, another that can be mounted for persistent user data. Between Puppy's RAM disks (rewritten to hard disk as squash files) and VMware's optional non-persistence, nothing could get into your Windows system from surfing the web.

If you're using a good router I think the web is the only risk. If you read mail through a POP client, that could be a risk. But, you can read POP mail from a virtual Puppy machine too.

Mark