All posts by Jacob A Irwin
Finding a Job After College – Part 3 – The Interview Process
In Part 1 of this series, My Money Blog – How to Get a Job After College – Part 1, I showed everyone several tips on how to create a resume and cover letter. In Part 2, My Money Blog – How to Get a Job After College – Part 2, I discussed several places/resources that can be used to find target job opportunities.
In the final chapter of this series, I wanted to guide everyone through the interview process, as I have experienced it over the past few years, and offer several tips that I have picked up along the way.
employers want you, believe it or not
Overview of Interview Process
From what I have seen over the past few years, the interview process basically has three phases.
1) Pre-screen interview
This type of interview is the first formal interaction between the potential employer and employee. It usually is done in one of two ways: either through on-site interviews (conducted by Human Resources or Technical reps) at the students university or at a career fair or a telephone interview (usually conducted by the companiy’s Human Resources department).
Due to the fact that these pre-screen interviews are conducted by someone other than the hiring manager offering the position, major gaps can exist because the HR reps can be looking for a different set of pre-reqs than the manager. For example, I have seen that sometimes, HR places too much of an emphasis on the name of the school from which the candidate comes, while hiring managers tend to care more about experience.
During this interview, the questions will be very general (not technical) with some situational/experience questions. However, in my experience, I have found that this interview is more to just get better acquainted.
2) Pre-screen interview with hiring department
After getting through the first “get-to-know-you” interview and if the HR rep finds you eligible, your resume and contact information will be forwarded to the actual department where the job is being offerred. The department will then elect a representative (may or may not be the hiring manager) to call you for another pre-screen interview.
The questions in this interview will also be fairly general, with the purpose being for the department to decide if you would be a good candidate to invite for a set of all-day in-person interviews.
3) On-site interview
As you can imagine, the on-site interview is really where the decision gets made of whether or not to hire a candidate. And, vice-versa, it gives the candidate an opportunity to decide if the company/location is a good fit for him/her. The key here is to focus on one simple truth – as much as you want the job, the company needs to find and recruit talented individuals. Therefore, you should see the interview process as a two-sided discussion to make sure that a good fit for both sides is found.
The on-site interview usually consists of an all-day marathon interview session. Typically, you will talk with 6-7 people for anywhere from 30 min to 1 hour. The majority of these people will be from the functional area in which you would be working. However, you will most likely interview with one HR representative as well.
What to Wear During Interviews
From what I have seen, the safest bet for how to dress the day of your in-person interview is to “overdress.” What does this mean exactly? It means that if you are a guy, wear a suit and tie. For girls, I have no idea – wear the equivalent of this.
This applies even if the place you are applying is a plant site where everyone wears jeans. It is just the safest way to dress to make sure you are prepared to meet with anyone from a line manager to the plant manager.
What to Eat During Lunch
Because all of the interviews and “thinking on your feet” that you will be doing, you will most likely not have the world’s biggest appetite. However, it is best to be sure to order something for lunch that is easy and not messy to eat. You don’t want to draw too much attention to yourself during lunch.
For me, I have some pretty interesting lunch habits (examples – eating fruit straight out of the can), but I would want to make sure to hold these back and stick to more normal practices until after I obtained the job.
Interview Questions / How to Prepare for the Interview
So, you’ve gotten through all of the pre-screen interviews, your bags are packed, and you are ready to go to bed the night before your on-site interview. But wait, hold it right there! You’ve still got to do several more things before heading to your big day!
1) Study the company
Because stepping in to the interview room(s), you will want to be armed with some broad knoweldge about the company’s products/services and any major recent events related with the company.
Why do you want to do your homework on the company? Easy! Because having this knoweldge will make the interviewers feel that you are truly interested in what they do and want to get a job with the company as opposed to being forced to be there by your parents.
2) Print out 20 copies of your resume on resume paper
You will want to make sure you have plenty of extra copies of your resume on hand for the interviewers to be able to talk through with you and in the case any additional people you meet during the day ask for a copy. Resume paper is very nice because the textured appearance makes your resume stand out in a pile when potential employers are doing their final pre-requisite reviews.
3) Make sure your personal networking business cards are in your briefcase. See the previous post titled, My Money Blog – Promote Yourself with Free Business Cards, for more information on this.
4) Make sure you leave your hotel and/or house with PLENTY of time to spare the morning of your interview. You want to make sure you have extra time in the likely event that you get lost (whether or not you have a GPS in your car). This will also ensure that you remain relaxed for your interviews.
5) Prepare pre-formed responses to general question types
Similarly to the way that a comedian has practiced material that he or she delivers to audiences during performances, you should also have pre-formed responses to certain general types of questions that get asked ALL OF THE TIME during interviews.
What are these questions you might be asking? The ones that I created pre-formed answers to are listed below (I was asked these in pretty much every interview for my current job):
- Tell me about a time that you showed leadership
- Tell me about a time when a you failed at a project and how you handled it
- Tell me about a time when you showed technical skill proficiency
- Tell me about a time when you worked with a difficult person and how you handled it
Once you get your list of questions written out and your 1st draft responses, have them reviewed by someone you trust, preferably, a supervisor that you work with, a professor, etc. Get your opinion on how the responses can be improved to increase your chances of being hired.
6) Prepare questions to ask interviewers
One of the most important parts of the interview process is the very end of the interview where the interviewer asks, “Do you have any questions for me/us?” The worst thing you could possibly do is say, “no.” Why is this? Simply saying “no” indicates a lack of interest on your part in what the department and/or company does for living. The interviewer wants to see that you are legitimately interested in working at the company.
What are some good types of questions to ask at this time? Several of my favorite are listed below. I usually just take this list to my interviews and have it handy whenever I need it!
- What types of activities are there to do in the area?
- Are there people my age around here?
- Where would I live?
- What types of responsibilities/tasks would I do in the department?
- Is there an opportunity to _______ (fill in with something I am interested in)?
- The list goes on….
I wholeheartedly wish everyone good luck in their interviewing and job finding exploits! And, as always, please don’t hesitate to ask questions!
Keep on learning!
Jacob
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What Percentage of My Salary Should I Save for Retirement?
“So, just how much of my paycheck should I place in to my retirement account each month?”
It’s a difficult question/decision that many people face, especially young adults that are just beginning their working career. And, as you might have guessed, the special amount is heavily dependent upon each individual’s financial situation and if you are shooting for early retirement. Additionally, the answer depends on another question — how well do you want to live during retirement?
For example, if you have a lot of high interest credit card and/or student debt, payday loans, no health insurance, or no emergency fund, you will want to make you follow the My Money Blog – Account Hierarchy and dedicate funds to the higher priority areas before beginning to save for retirement.
How Much Do Rich People Save?
To begin, just out of curiosity, let’s take a look at how much “rich” people save. In T. Harv Eker’s book titled, “Secrets of the Millionaire Mind,” he states that rich people save over 30% of their income. Very interesting!
How Much Should I Save For Retirment?
In order to make this post fully customizable to each individual’s needs, what we’re going to do is make a “super Spreadsheet” version of the Excel sheet I explained to everyone in the previous post at the following link, My Money Blog – Retirement Calculators.
I attached an edit-friendly copy of this spreadsheet at the link below. Please do everyone a favor and save the spreadsheet to your desktop as an excel file before making changes to fit your specific situation.
Google Docs – Super Duper Retirement Calculator
Once you open the spreadsheet, you will then adjust the following parameters, shown in the orange higlighted cells on the spreadsheet, to fit your specific situation.
- Current age
- Current amount saved
- Assumed annual return on investment (before retirement)
- Current salary
- Assumed raise each year
- Assumed inflation rate
- Present value of the desired income you want during retirement
- Desired retirement age
- Assumed age of death
- And, assumed % return during retirement
What does all of this financial assumption jibberish mean? Essentially, what this spreadsheet is doing is applying the same formulas as discussed in the previous retirement calculator to grow your salary and current savings up until and through retirement. Additionally, we are adding the subtraction of the amount of income you will live on during retirement. We have to thrown inflation in to the mix because a certain $$ income now will not give you the same standard of living at retirement age. We also add a different assumed return % during retirement that is lower than prior to retirement because you will not be able to take on as much risk.
Please note: this model does not take in to consideration taxes involved on 401K withdrawals.
After entering your specific information (and remember, saving it to your desktop so you don’t screw up the spreadsheet for other people), you will then change the purple Percent of Salary You Need to Save Each Year cell to different values. I would start off low (around 5-10%) and then move up to 30-35%.
As you are varying the value in the purple cell from above (G13), what you are looking for is to see that the Current Amount (in column B) at your assumed age of death if not 0, or negative. This would indicate you have ran out of money, or the living death.
If you run out of money before your assumed age of death, you will need to do one of the following things:
- Lower your standard of living / expected income during retirement
- Increase the % of your salary you save
I hope this tool gets you on your way to financial success!
Keep on learning!
Jacob
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How to Get a Job After College – Part 2 – Search For Job Opportunities
In Part 1 of the series (see link below), I discussed several tips and techniques for creating a resume/cover letter and having it reviewed so that it is ready to present to potential employers.
My Money Blog – How to Get a Job After College – Part 1
Now that you have your resume all polished up, it’s time to find positions that you can apply for! But, where do you start looking? What sorts of job search strategies can you apply? It is shocking how some departments in universities do not provide much guidance at all in the job hunt for their students. So, don’t be afraid to do it on your own!
Places to Look for Jobs (ranked in order of liklihood to get you a job with #1 being most likely)
1) Ask your college professors for department alumni or other contacts they have that would be able to get you a job.
Why does this system work you might ask? The answer is very straight-forward. If I am an alumnus of the mechnical engineering department of a university that is currently working in the automotive industry, there will undoubtedly be professors existing in the department whom I trust. And, if they can tell me that in their professional opinion that they have a lead for me on a potentially promising candidate for my company, I am going to listen and be able to promote that individual much better than a candidate that applies in a random fashion.
2) Ask your friends and family for possible contacts they have in the field in which you are interested. (It’s always better to have some kind of connection with your employer than applying randomly)
3) Go to the career fair that your department/school holds for your area of interest.
Career fairs at your college are a great thing because the very action of the company showing a physical presence to recruit on your college campus indicates that 1) they are already interested in the college’s students and 2) recognize that college as a place where productive talent has been found in the past. Additionally, if you have good credentials, it is a lot harder for a potential employer to ignore you face-to-face than if you are merely a name on a resume.
4) Join a professional organization (Society of Hispanic Professional Engineering, Women in Engineering, etc) and travel to career fairs/expos they offer. This is how I got my current job.
These aren’t quite as good as career fairs at your college because the companies will not be specifically interested in your school’s students. However, it is still harder to be ignored in person vs. being only a resume.
5) Go to career fairs at other regional universities.
Before going, make sure to call the career center in charge of the career fair and make sure you will be able to get in to the fair without an ID from that specific university. It won’t be worth the drive if you are unable to get in!
6) Cold calling employers / unsolicited applying online at company websites (my least favorite)
In trying to find a job several years ago, I applied online to probably close to 75 companies. Not one of the applications turned out successfully. I have even heard that there is like 2% chance of success with submitted an unsolicited resume online or via email. I believe this chance increases to 10% with calling, but this is still not that impressive.
Note: do not be confused with the fact that nowadays, many employers require you to apply online as more of a formality after you have been connected through another route with the job for legal reasons.
While the odds are fairly against you for applying in an unsolicited fashion online, I have seen this method work with a fair level of success when you apply directly to positions available at smaller sites within a large company (not directly to the company wide internship applicant pool). Why does this work you might be asking? The key is that you want to get your resume looked at by someone other than Human Resources that will actually hire you.
Related Job Finding Topics
1) Do not settle for the answer, “Just apply online then we’ll move forward that way.”
One of the easiest ways for employers to professional reject you at a career fair is to tell you, “Everything looks great! Just apply online!” This is 90% of the time code for submit your resume to the resume vat, and we will never talk to you again. To reitterate, it’s OK to be asked to apply online because it is required for legal purposes, but it should be more as an afterthought/formality to the job connection process.
Instead, if the employer representative is interested, they take your resume from you personally and invite you back later for an interview at the career fair. No interview, just applying online = unlikely to get job. If they do not offer to take your resume and/or invite you back for an interview, at the very least, ask them for the rep’s contact information so that you can keep your name fresh in their mind.
2) Following up after meeting or interviewing with employers
After you meet a potential employer at a career fair or during an interview, it is important to ask them for their contact information so that you can follow up with them 1) to hear about the results of the job and 2) to keep your name fresh in their mind.
3) Start Small – Internships, Co-ops, and Starter Jobs
It is very likely that you will not be able to find your ideal full time job right out of college. However, there are several things you can do to improve your chances of this happening.
The biggest key here is to do an internship!
Why are internships so valuable? Easy! Internships are a no-risk opportunity for an employer to get an in-depth, temporary look at how you perform on the job and analyze whether or not you would be an effective full time employee. Additionally, internships do not for benefits such as health insurance, etc, thus reducing the cost of an intern by nearly 40%.
So, your goal should be to find an internship or co-op position while you are in school (either during the summer or during spring/fall semsester. Most companies that show up at career fairs will also be recruiting for interns/co-ops as well as full time positions.
Another good thing to attempt is to start working at a more local company in the industry in which you want to work. Several years ago, when I was on the internship hunt, I used the link below to search for smaller bio-tech/pharma companies in my college town, and merely called them and asked if they would offer me an internship. After I obtained an internship at the smaller company, I could then leverage that experience towards my next goal. See how that can work?
Bio-Link.org – Search for a Bio-tech Company, by location
Well, I hope this post helps you on your job hunt success! Please let me know if you have any questions.
Keep on learning!
Jacob
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I’m Getting Married. Should I Do A Prenuptial Agreement?
Today’s post comes as a reponse from a reader request to learn more about prenuptial agreements. And, since this is sort of a taboo subject that involves and good bit of controversy between couples, I figured that it sounds like a perfect thing to write about! 🙂
So, let’s get started.
What exactly is a prenuptial (I just found out it is not spelled with a -ual on the end – amazing!) agreement?
Well, as you may or may not know, marriages are not only emotional and physical unions, but financial unions as well. Prenuptial agreements are contracts between the marrying couple spelling out exacting what happens to the assets in the event of divorce or death of one of the parties.
Why should I think about getting a prenuptial agreement?
According to the article at the link below from Bankrate.com, 33% of first marriages end up in divorce, and 50% of second and third marriages end in divorce. These are difficult odds!
BankRate.com – Everything You Need to Know About Prenups
And, if you live in one of the nation’s nine community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington or Wisconsin), the law says property accumulated during the marriage will be divided equally. In all other “equitable distribution states,” assets are divided according to what the court deems appropriate. Prenuptial agreements are a way to keep the court out of the decision about how the marriages’ assets are divided! Seems to make senese right?
Who should think about getting a prenuptial agreement?
As it turns out, prenuptial agreements are not just something for the rich. You should also consider drafting a prenup if you fall in to one of the following categories:
- You have IRA, 401K, mutual fund, or stock assets from before you were married that you feel should be yours in the event of getting divorce.
- Either the woman/man is much more wealthy than the other.
- You are currently taking classes to earn a lucrative degree, such as training to be a lawyer or a doctor.
- You have children from a previous marriage.
Setting Up and Maintaining a Proper Prenuptial Agreement
The key here is to approach the subject early on in the relationship, preferably before you get engaged. Once both parties decide that it is all right, sit down to generate a list of your assets and talk about general ideas of how the assets would be divided if a separation were to occur.
Once you both have a general idea of how you want to proceed, you have to make it legal by hiring separate lawyers in order to ensure an enforceable agreement.
After the prenuptial agreement has been created and made official, you will want to make sure that it is maintained on a fairly frequent basis so that it captures the current financial state of the marriage assets.
I hope this helps to shed some light on a somewhat “sensitive” subject. As always, please let me know if there are any questions, and keep up the post requests!
Keep on learning!
Jacob
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How Do Credit Unions Measure Up?
In the recent “Choosing a Bank” series (shown at the links below), I deliberately excluded the idea of choosing between a privately owned bank and credit unions. Why is this you might ask? This is due to the fact while you almost certainly qualify for some type of credit union, specific credit unions are not accessible to the general population, and therefore, comparisons are more difficult on a media such as a public website than comparing an INGDirect.com account with a Bank of America account.
My Money Blog – Choosing a Bank – Part 1 – Local Banks vs. National Banks
My Money Blog – Choosing a Bank – Part 2 – Savings Options
My Money Blog – Choosing a Bank – Part 3 – Checking Accounts vs. Savings Accounts
For the uninitiated, a credit union is a not-for-profit cooperative that is owned by the account holders/members. Generally, it is managed by a volunteer committee. Because credit unions are non-profits, they do not have to pay state or federal taxes. This is a major advantage!
To qualify for membership (for an account), you must share a common bond with the organization and body of members. For example, many companies, universities, and even cities/counties have their own credit unions.
In short, it is very hard for traditional banks to compete with credit unions, and it is clear that credit unions offer superior products. It has been postulated that credit unions save customers and estimated $8 billion per year in savings on fees compared to traditional banks. MSNMoney.com provides a great comparison of the advantages of credit unions to traditional banks at the link below.
Advantages of Credit Unions – MSNMoney.com
Advantages of Credit Unions
- Higher interest rates on savings instruments
- Lower interest rates on consumer and mortgage loans
- Deposits are insured
- Harder to access your money due to decreased number of branches and ATMs around the country. Although, this is decreasing all of the time due to ATM networks such as the AllPoint network – see the post My Money Blog – Are ATM Fees a Thing of the Past.
- You will most likely want to change to a different bank/credit union if you leave the school, company, or area in which your credit union is located. In doing some research, I was amazed that most credit unions I came across offer clauses along the lines of “once a member, always a member.” Therefore, you will most likely not be kicked out of the credit union if you stop working for the company. However, you will not want to have your account at a Pfizer credit union if you live in Winslow, AR where there are no other Pfizer employees within 30 miles and no Pfizer credit union branches.
In my personal situation, since I seem to move around a lot, I have chosen to have my checking account with Bank of America due to ease of access when I move. However, if I were to buy a house and want a mortgage loan, I would definitely consider the options at my local credit union!
Key Takeaway
It is clear that credit unions offer superior financial products when compared with traditional banks. As such, they should always be considered as one of your financial options. Take a look at the link below and see which credit unions are located near you that you qualify for!
Keep on learning!
Jacob
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How to Get a Job After College – Part 1 – Creating a Resume and Cover Letter
One of my ultimate pet-peeves is seeing people work REALLY hard to do well in college, want to get a certain type of full-time job, but then settle for graduate school or do some mediocre position as a result of not having the correct guidance for pursuing a full time job. Then, when they get out of graduate school, they still don’t have any idea of what they want to do because they didn’t get out in the real world and explore different opportunities.
Getting a job these days is definitely not becoming any easier, especially with the way the economy has been acting the past few years and the increased globalized competition. However, it is not impossible.
In this series of posts, I’ll try to explain some tips and techniques that have helped me over the years to get the full time job I wanted.
The absolute first step on this journey is to create a resume. It doesn’t even have to be bullet-proof at first, but just created.
To guide you through this discussion, I’ve created a sample resume at the link below that you can view and use as a template if desired.
Key Rules to Follow
1) Timing –
Due to the increased competition being faced today, it is VERY hard to get the type of job you want directly out of school without internship or co-op experience. Because of this, the timing of getting your resume ready should coincide with when applications start being accepted for internships/co-ops.
When is this? Generally, companies look to hire interns the summer after their sophomore or junior year of college. Therefore, you need to have your resume ready to go by Fall of your sophomore year. This means starting to work on it during the summer before your sophomore year.
You might be saying, “But My Money Blog, I don’t know what I want to do yet at that age, and I don’t have enough work experience yet to create a resume.” This is not a good excuse. Create your resume using what you have!
2) Keep Your Resume to 1 Page –
To be blunt, since you are only an undergraduate, believe it or not, you aren’t important enough yet to have a resume more than 1 page. So, do whatever you need to do to trim it down in size!
3) Have Your Resume Reviewed –
Once you have created your first draft of your resume, have it reviewed by as many people as you can – preferably, people you respect. Examples would include your parents, professors, career counselors at school, etc. Even more ideal would be any kind of contacts you or your family has that already works in the industry in which you want to obtain a job.
4) Use Action Verbs and Add Quantification Where Possible –
In conjunction with having your resume reviewed, you will want to make sure to word your experiences in such a way that they are too the point and communicate the responsibilities that you took on. It also helps here to relate past job responsibilities to broader, more universally known skill sets. For example, perhaps you worked as a cashier at a local fast food chain restaurant. In this case, you could on one hand just say that you worked as a cashier. On the other hand, you could say that you gained experience in accounting and/or financial transaction techniques. Whatever you put down, you want to make sure that it is the truth, however.
Another very beneficial technique that I am a big fan of using is to add Dollar value quantification to my experiences, wherever possible. Why does this method work? Easy! Because no matter what industry you are in, whether from fast food to pharmaceuticals, there is always going to be money involved. As such, it can be used as a common denominator for hiring managers to gauge your level of experience.
5) Highlight Your Areas of Strength –
Yet another important part of building a resume is to highlight your strong points. For example, in the resume at the Google Docs link above, notice how the author wanted to draw emphasis using bold text to the broad spectrum of majors achieved as opposed to the name of the school where she went. On the other hand, if the student had went to Harvard, you can bet your pretty penny that she would have wanted to bold the name of the school, irregardless of GPA or major.
6) Create Different Resumes for Different
The last key comment I have for resume creation is that idea of creating different versions of resumes for different areas for which you apply.
For example, when I was interviewing for jobs out of college, I wasn’t 100% sure if I wanted to do pharmaceuticals or renewable energy. Therefore, I tweaked my resume and my experiences around so that less emphasis was placed on my biomedical experience, and more emphasis was delivered to my experience with bioprocessing. You will also want to make sure to change your objective as well!
See how that can work? Not too bad right?
Related topic: Is it worth it to create a cover letter?
The jury is still out for me on this question. Personally, I have never been asked specifically for a cover letter in my interviewing career. The only time I have been asked for it is when I apply through the internet/computer. Additionally, in my working career, I have never asked any one to show me his/her resume, nor have I ever heard a hiring manage ask me for one of my contact’s cover letters.
However, in all honesty, it really couldn’t hurt your chances to make one. What I would recommend is to make a general template cover letter that leaves room for approximately 2 sentences of specific information you can fill in for each employer you apply to.
Click on the link below to see an example cover letter template and how it can be customized to each specific employer.
Example Cover Letter – Google Docs
Remember, you will also want to keep the cover letter to 1 page.
I hope this information was helpful. Please let me know if you have any questions!
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Are Non-Bank ATM Fees a Thing of The Past?
Evening fellow readers!
So, it’s happened to everyone…You are out with your friends or on vacation, in need of cash, and forgot to go to your regular bank’s ATM before you left. But, bless your lucky stars, there it is! In the corner of the bar or convenience store, you see an ATM, and get some cash. However, later, you check your bank account online only to find out that you’ve been charged a $3-$5 ATM usage fee.
In a previous post at the link shown below, I described how one of the big benefits of having an account with a national branch bank is that you will not be charged non-bank ATM usage fees when you are traveling since national banks have many branch/ATM locations around the country.
My Money Blog – Choosing a Bank – Local vs. National
However, I am happy to report that this may be a thing of the past, thanks to new ATM alliance networks such as Shazam or AllPoint (see links below to go to their websites)!
All Point ATM Network
Shazam ATM Network
How do these networks work? Pretty easy. Your bank signs a contract and pays to join the network, and as a result, you can use many non-bank ATMs for free, with no usage fee. Sounds good right?
The banks that are most likely to enroll in the use of these ATM networks are banks that do not already have a large system of ATM (examples of unlikely enrollees are Bank of America, Wells Fargo, or Wachovia). However, a local bank like Signature Bank of Arkansas in NW Arkansas, would be an ideal candidate for using this type of system. In doing a quick search, I found the following website on the bank’s home page – Signature Bank of Arkansas Shazam ATM Locations.
Similarly, INGDirect, an online bank, has a contract with the AllPoint ATM network of 35,000 ATMs that allows checking account customers of INGDirect to have access to their accounts anywhere in the USA. See the following link INGDirect.com Electric Orange Checking Account Free AllPoint ATMs.
When you contrast the size of the AllPoint network to Bank Of America’s largest one-bank ATM system in the country of 18,000 Bank of America ATMs, you can begin to realize how extensive this network really is.
The only drawback to the ATM network systems like Shazam and AllPoint is that since the ATMs are mostly located in convenience stores, grocery stores, restaurants, and bars, you will not be able to deposit money in to them like you can at Bank of America ATMs and at your local bank. However, this may not even matter because you are more likely to be spending money than depositing it when you are traveling away from home.
Key Takeaway
The key thing to learn from this post is to be sure to to check your bank’s website for which ATMs are eligible to use for free. Print out a copy of where the eligible ATMs are in the city you will be traveling to and take it with you. It could save you a lot of money when you need it most!
Keep on learning!
Jacob
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Choosing a Bank – Part 3 – Checking Account vs. Savings Account
In Part 2 of the “Choosing a Bank” series (My Money Blog – Choosing a Bank – Part 2), I discussed the four basic options for savings accounts available on the financial markets today.
However, what I did not address was 1) how to decide if a checking account or savings account is right for your needs and 2) how to choose the correct checking account (if that is the route you decide to take). These topics will be what we’ll investigate together in today’s posting.
Let’s get started! This is definitely an exciting topic because there seem to be new options available every day.
Deciding Between a Checking Account or Savings Account
At a high level, whatever banking instrument you choose needs to be able to fulfill four basic requirements – 1) allow unlimited transactions for daily living expenses with no fees, 2) have checking writing capability (for paying bills, and unexpected expenses directly to people who cannot take credit cards), 3) have an ATM card tied to the account / have ATM access capability, and 4) offer a competitive interest rate of return on your cash savings.
Please always keep these requirements in mind as you are exploring your options. Now that we know what is required, let’s take a look at our options:
Savings Accounts – In general, traditional savings accounts:
- Do not allow check writing.
- Do not feature ATM cards.
- Have restrictions on maximum numbers and quantities of transactions per month.
- Do offer competitive interest rates on your account’s cash balance.
Clearly, traditional savings accounts at brick-and-mortar banks are not a good sole choice for your banking needs.
Non-traditional savings options come a little closer to fulfilling some of the requirements, but still fall short. For example, Vanguard.com – Money Market Mutual Fund Accounts offer check writing capability on your taxable money market mutual fund balance, but do not offer ATM cards.
My two favorite online savings accounts (at the links shown below) offer no fees and unlimited transfer each month, but do not offer checking or ATM card capability.
IngDirect.com Savings Account
DollarSavingsDirect.com Savings Account
Note: if you are looking to open up a savings account with IngDirect.com, email me your name and email address at irwin.jacob@gmail.com, and I’ll send you a code to give you $25 of free money, when you open the account with a $250 minimum opening balance.
Checking Accounts – Traditional checking accounts offer:
- Unlimited transactions/transfers of money
- Checking writing
- ATM/debit card capability.
- The only pitfall is that traditional checking accounts do not offer any interest rate on the money kept in the account. Recently, interest bearing checking accounts have been created (see information on this below). However, the interest rate offered on these products is significantly lower than for savings accounts with the same minimum balance requirements.
Summary – As it turns out, it looks like a multi-account system of checking and savings accounts are required in order to manage your money most effectively. Since we already explored choosing a savings account in Part 2 of this series, let’s look at our options for checking accounts.
Choosing a Checking Account
To recap what was stated previously, we are looking for a checking account that meets the following requirements:
- No fees / unlimited transactions.
- ATM/Debit card capability
- Check writing capability
Please note that having a competitive interest rate is not required for a checking account since we will use a savings account to grow our cash savings.
Step 1-
The first step to choosing a checking account is to decide between a local bank or a national/online bank (an online bank has almost the same pluses and minuses as a national bank when it comes to choosing a checking account). Take a look at Part 1 of this series for more information on that topic at the following link – Choosing a Bank – Part 1 – Local vs. National.
Step 2 –
Once you have decided between a local or national/online bank, the next step is to decide what type of account you want to open. For this, you basically have two choices: interest bearing checking accounts and regular checking accounts.
Choosing between an interest bearing account and a normal checking account can be a little tricky. All else being equal, you will want to lean towards the interest bearing account. However, if there is a monthly maintenance fee associated with the account or other restrictions, you would want to revert to the normal checking account.
For example, click on the link below to look at Bank of America’s checking account options. In doing this, we see that the normal My Access Checking account is totally free if opened online. We also see that Bank of America offers an interest bearing checking account. When we click on the details for the interest bearing instrument, we see that they are offering a 0.05% interest rate. However, we also can see that if the balance is under $10,000, there is a monthly maintenance fee associated with the account. In this case, we would want to go with the normal checking account.
Bank of America Checking Accounts
On the other hand, interest bearing checking accounts from online banks are an AMAZING DEAL. Just take a look at the link below for INGDirect’s checking account!
IngDirect.com – Electric Orange Checking Account w/ Interest
This account offers:
- No fees
- An ATM/Debit Card
- Free checks
- An interest rate of 0.24%. Awesome right?!
Note: if you are looking to open up an interest bearing checking account with IngDirect.com, email me your name and email address at irwin.jacob@gmail.com, and I’ll send you a code to give you $25 of free money, when you open the account with a $250 minimum opening balance.
As it turns out, other online banks offer interest bearing accounts similar to ING’s. Take a look at the link below for more details about those.
Bankrate.com – Checking Accounts with Interest
What works best for me
For my personal needs, the following system works best for me:
- I have a MyAccess Checking Account with Bank of America (no fees, free checks, free ATM/debit card access). I use Bank of America because I tend to move/vacation around a lot, and they have branches everywhere. Additionally, many of my friends and family have their checking accounts with Bank of America, and therefore, we can do instant money transfers between our accounts.
- I only keep around $700-$800 in this checking account at any one time because I do not earn interest on my balance.
- Any additional money I transfer out to either my stock equity accounts or my high yield savings account with Dollarsavingsdirect.com
Out of curiosity, let’s just take a look at how much more money I would be earning if I used an interest bearing checking account (INGDirect). Assuming that I maintain $800 in the account throughout the year and earn 0.24% interest, this equates to $2.92 per year. It’s probably not enough to outweigh the benefits I enjoy with Bank of America. But, if all else is equal in your situation, it is something to consider!
Please let me know if you have any questions.
Keep on learning!
Jacob
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Unlock Hidden Money in Your House – Sell Your Items On eBay
In my previous post at the link below, I described how I started an eBay resale business several years ago and discussed the steps I took to grow the business in to a profitable entity.
My Money Blog – How To Start A Business
In this post, I want to do the following: 1) introduce to everyone the idea that they can unlock hundreds of Dollars of hidden money in your apartment or house by selling your unused items on eBay and 2) share the three key learnings from my eBay endeavors that will hopefully help you in your future selling.
Sell Your Unused Stuff on eBay
If you’re like me (and most other people), you have A LOT of unused stuff around your house – DVDs and VHS tapes you no longer watch, books you have read or didn’t read, old bikes, speakers, amplifiers, shoes, unused shoes, radios, and the list goes on!
Now, just think about this idea – being able to get rid of your stuff and making money at the same time! Sounds nice doesn’t it? Well, if you’re willing to put in a little bit of leg-work and have fun in the process, you can make this dream a reality by selling your stuff on eBay.
How do you get started?
First, go to the ebay.com at the following link, and register for a selling account Register at eBay. Once you have done that, you are ready to start selling.
Now, at this point, I could go in to pages and pages of details of how to set up auctions and sell on eBay. However, there are PLENTY of book resources available on this subject already on the market. So, I’m not going to waste your time by just repeating that here.
My favorite book for general tactics at eBay selling is a book by Marsha Collier called, “Starting an eBay Business for Dummies.” The book has a very approachable layout, making it easy to find reference topics. Additionally, it is easy to read for beginning sellers. Pick up a used copy of this book at the Amazon link below!
Three Key Learnings To Help You Sell More and Make More
Listed below are the three things that I learned after many hours and trial-and-error of eBay selling. Put them to use and you will see results!
1) Not everything sells on eBay, so don’t try to sell everything! – Use “Completed Listings” Option
As the title suggests, the first thing you have to realize when selling household items is that not everything that you want to sell is going to sell.
For example, on my shelf right now, I have a used, VHS copy of the Harrison Ford movie, Air Force One. Now, let’s see if it will sell if I list it on eBay. I perform the search shown at the link below, and then on the left side of the screen, I scroll down, and click “show completed listings.” This shows a list of auctions that have ended with products with the same key words as the product I am wanting to sell.
In doing this, I find that only 1 VHS tape of the last 30 auction listings has sold. This is not a good ratio, and will not be worth my time or the eBay listing fee money required to list the tape. I then move on to another item in my house, and using the same system, I can find out what will have a good likelihood of selling success.
2) You don’t decide the price, the eBay marketplace does
So, using the method described in No. 1 above, you have found good evidence that something you have will sell in the eBay market. What’s the next step?
Well, what you’ll want to do is find an auction listing that has successfully sold (shows in green on the completed listing screen). Once you have found one, price the item you are listing at the same starting price or buy it now price. Don’t expect to make more by thinking you are smarter than the market!
3) It’s OK (and probably better) to mimic the auction listing format of successful listings
After finding a successful product listing as described in No. 2 above, if you like the format and information that is contained in the listing, don’t be afraid to professionally mimic what is shown on the listing.
Ever heard of the concept of “not reinventing the wheel?” The same thing applies here. You want to use a format that works. However, do not copy the listing word-for-word because it could cause complaints from the seller if it is seen repeatedly.
Well, I hope this advice gets you started on the road to unlocking some hidden money by selling your unused stuff on eBay. Good luck!
Keep on learning,
Jacob
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How To Start a Business
So, you’ve got a GREAT, innovative, new idea for a business. However, where do you start? what do you do? what legal/official steps do you need to take to get going? How do you advertise?
These are all questions that I wanted to attempt to address during today’s posting.
In my lifetime thus far, I have started two businesses: 1) a pet waste removal / yard clean-up service and 2) an eBay selling business. While I have not made a TON of money with either of these opportunities, they were priceless learning experiences where I could try out advertising, billing, bookkeeping, website development, and customer building techniques to possibly be used later in life.
Side note: Keep an eye out for a post coming soon on the key things to know to sell your extra items at home on eBay!
Let’s get started!
Step 1 – Create a DBA (Doing Business As) Name
The first thing you’ll want to do is pick a name for your business. Remember that with business names, you want to pick something related to your field so that potential customers can identify you.
Have something good in mind? Once you have it, go to your local county courthouse, then head to the county clerk’s office. There, go to the desk, and ask the official that you would like to register a DBA name for your new business. They’ll give you the paperwork to fill out, and you will be charged a fee of around $20-$30, depending on your location.
There! That wasn’t too hard right. Now you have your identifying name.
Step 2 – Register for a State Sales Tax ID/License
The next step to make your business official is to apply for a state sales tax ID number. This can be done fairly easily. Just search for the following phrase in Google to find/download an application, where XXXX will be replaced with your state’s name.
“XXXX state sales tax id”
The state sales tax ID number is important because it is required by wholesalers in order to give you reduced prices (idea is that you aren’t charged tax for purchasing goods to resell because you will charge tax to the end customer).
Step 3 – Find Wholesalers to Purchase Goods for Resale
If you are a service provider, you can ignore this step. However, if you start a business designed to resale goods to end customers (such as an eBay business), you need to find products to sell.
Armed with your state sales tax ID number, you can now approach pretty much any distributor or wholesaler that you are interested in buying from (whether you find them locally or on the internet). One of the biggest headaches you will encounter is large minimum order quantities. However, many have no minimum order quantities. One distributor I used pretty successfully was DBL Distributing- Home Page.
Step 4 – Advertising
Whether you like business/sales or not, advertising is ABSOLUTELY ESSENTIAL to success. Let’s do a quick exercise. Just think for a moment the products you use on any given morning: you drink advertised coffee, use an advertised toothbrush/toothpaste, drive an advertised car to work, etc. The list could go on forever.
Naturally, the type of advertising you use depends on your business model. However, two advertising mediums that can be used pretty much universally are a website and flyers/signs.
For a website, I usually like to start off with the most low cost thing before I decide to devote significant financial resources to the business. To get a website going in no time and for free, you can use Blogger.com, Google’s blogging website, to create a blog. Blog’s are becoming extremely customizable, and there are so many widgets/special features out there, that you can customize your blog to do pretty much anything you want it to!
Another option is to use GoDaddy.com (link to website shown below). They have great deals on domains and hosting packages. With this, you will have to know a little more about website building, but you will have more control over your formatting.
Flyers are pretty straight forward because they can be generated from any computer. They key with flyers is to 1) create the flyer is such a way that is automatically gets the reader’s attention and 2) be sure to post them where people will read them.
In my past businesses, I have used several types of signs: yard signs, car magnet signs, and door hanger signs.
For the yard and car magnet signs, I just did a Google search, and found the cheapest quote I could find that was suited for my purposes. Take a look at all of the options that come up when you do the searches below!
Search for Car Magnet Signs
Search for Custom Yard Signs
Since I did a lot of door-to-door promoting of my pet waste removal service business, door hanger signs were great because I could hang them on the door when no one was home! I had a lot of trouble finding these for a good price online, and ended up just approaching a printing brick-and-mortar business in my hometown in Arkansas for these signs. They weren’t that expensive at all, and they worked great!
To recap, there are many steps that are involved in starting a business. However, these four steps were the result of many hours of research and teaching myself how to do things! I hope they help you in your ventures!
Keep on learning!
Jacob
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