Over on Get Rich Slowly yesterday, Daiko posted about how you can often get fees waived, interest rates adjusted, prices reduced and more just by asking. Since banks figure prominently in the list of places to ask for favors and I work at a bank on the receiving end of such requests all day long, a few ways to increase the potency of your requests and likelihood of your success came to mind. My examples are mostly bank related, but apply anywhere!

1. The importance of “Nice”

This should go without saying, but based on the people I deal with daily, apparently it needs to be said. Repeatedly. You absolutely will have more success with any request you make just by smiling and using a friendly tone. Shocking, isn’t it?

Now, this doesn’t mean be a pushover and take the first “no” you hear. It is perfectly possible to be both pleasant and persistent, but most people aren’t. Use that to your advantage. Personally, and the same is true for everyone else I’ve know in a service position, I will do absolutely all I can to help a nice person. The rude, demanding @#$%’s are the ones that get turned down if at all possible.

 2. Plan first, ask later

Before you ask for something, make a plan. Have a specific goal and a reason for your request. Don’t just ask if the bank/insurance company/store can “do something” about that fee, rate, or price. Be specific, aim high but be willing to compromise.

Specific requests help me as the representative, because I know right away whether I am personally authorized to do what you want. If so, I can do it immediately and you can be on your way. If I can’t, I’ll need to talk to a manager, who’s first question will be, “What do they want done?” When I have a specific request, they can either say yes or counter offer, again saving time and hassle for me and you. And of course, starting high gives you room to negotiate if I can’t do exactly what you wanted. But with that in mind…

3. Be reasonable

Feel free to ask me for the stars on a necklace, but don’t be surprised or upset when I propose something a bit more down to earth. And know this right up front: reasonable is relative. If you are a customer who’s been with the bank for 20 years and has $50,000 in 6 accounts, it might be reasonable for me to refund the full $150 in overdraft fees they incurred due to some freak coincidence. On the other hand, if you’ve been a customer for 8 months with $50.00 in a single account, refunding that $150 in fees you racked up for the third time is not a reasonable request. Have an idea of where you are negotiating from!

4. Choose the right target

A well planned, eminently reasonable request asked in the nicest manner possible will get nowhere if you’re asking the wrong person. Whether you’re talking in person or over the phone, be specific about what you want to discuss with the first person you speak to. Ask them to direct you to someone with the authority to help you. Trying to keep your business secret from the receptionist or service representative will only waste your time and mine when it turns out I’m not the person you need to see.

These are a few things that would make me (or anyone!) more likely to give you what you ask for. What other tactics have you used to get a “yes” instead of a ”no”?

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So I went to see “I Am Legend” last week with my brother and the wife. I’d been looking forward to it pretty much since the first trailer and while the ending didn’t have quite the same weight as the book, I definitely liked it.

(I don’t think I mention anything below that isn’t shown in the trailers, and it’s been out for two weeks now, but consider this your spoiler warning, just in case!)

If I had to summarize the lesson taught by the movie, I might say, “Watch out for vampire zombies spawned from cancer curing viruses run amok.” However, being the money geek that I am, I also noticed a few good financial points tucked in between firefights and eerie shots of the long grass in Times Square being grazed by deer.

1. Watch out for vampires

No, I don’t mean the blood sucking, brain eating varieties. (If those are a real concern for you, money is not your main problem!) Financial vampires are the costs that suck the returns from your investments and drain the balance in your checking account. Things like mutual fund loads, bank fees, and finance charges.

Get away from these money monsters before your finances end up as a pale, lifeless shell of what they could be!

2. Diversify

Ok, if a global cataclysm leaves you as the sole survivor of the human race, no amount of diversification will help you (and you won’t care anyway). But to ride out smaller disturbances (like a sub-prime loan crisis that pounds the stock market perhaps?), diversity in your investments is key.

Now, I don’t mean diversity as in “owning more than one mutual fund”, “having exposure to different industry sectors”, or even “having stocks, bonds and cash in your portfolio.” No, I mean really diversifying. That means diversifying across asset classes and global markets (as much as possible). Ideally, your millions would be spread globally across stocks, bonds, real estate, and commodities like timber, oil and gold. Of course if you’re like me, “millions” is better read as “thousands” and you don’t exactly have the available funds to buy enough different stocks, bonds, investment properties, oil futures, gold bullion, and timberland.

For those of us who are faced with such financial restrictions, there is still hope! There are numerous funds that invest in various asset classes, both directly and indirectly. Shares in these funds give you exposure to more exotic investments without actually needing a safe full of gold and a partnership in an oil field in Alaska. Check out some different model portfolios for more details on how to prepare your portfolio to weather (almost) any crisis.

3. Financial security is not total security

There’s a scene in the movie that takes place in a ruined bank. Money is piled everywhere, but the camera (and Will Smith) barely notices. Millions of dollars in cash, enough for a lifetime of luxury, are not nearly as useful as a loaded M-4 and a degree in molecular biology.

“Great,” you say, “but the point is…?” Don’t spend all of your time learning money skills. Yes, knowing how to balance your checkbook, analyze a stock, and maintain a well diversified portfolio are important. But staying healthy and knowing some basic self defense, first aid, and survival in different circumstances are at least as important. Preparing and learning to take care of yourself and your family in difficult situations isn’t being paranoid, it’s being prudent. After all, what good is a healthy bank account if you can’t enjoy it (or live to use it)?

So what do you think? Is Robert Neville as much financial adviser as action hero, or do I need to stop thinking so darn much and just enjoy the movie?

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Old and Busted: Savings bond

When it comes to gifts, one that nearly everyone has received at some point is the US Savings bond. They are easy to buy and people think of them as a good “investment for the future” compared to a check.

But people are wrong.

EE Bonds sold between November 2007 and April 2008 will pay a fixed 3% interest rate. That’s hardly keeping up with inflation, much less increasing in value! Additionally, cashing the bonds in the first 5 years costs three months interest as a penalty, and the bonds won’t reach face value for 20 years!

Obviously, from a financial standpoint savings bonds don’t make much sense (or cents). But other than a check, what is a fiscally minded giver to do?

New Hotness: Shares of Stock!

Forget about savings bonds and 3% returns, consider giving shares of stock instead! Giving shares is a better option for several reasons:

• Greater growth potential. Since 1926, the average total return for the S&P 500 in a 20 year period (the time it takes a bond to mature) is almost 406%, compared to 100% for a savings bond. (Source)
• Multiple ways to grow. With a stock, you can make money through share price increases and dividends, and stock splits can compound your gains (resulting in the higher returns above.)
• Increase financial knowledge. Perhaps the biggest benefit of giving stock, particularly to young people, is that it can increase their interest in investing. Talking about money is one thing, actually owning a piece of Disney or Coke is much more interesting!

Is There a Catch?

Obviously, the return on a stock is not guaranteed like a savings bond. The figures above are based on the S&P 500 index as a whole, the performance of an individual stock may be less, or even nothing if the company goes out of business.

You can reduce the risk by buying only big blue chip companies. The risk of Disney going out of business is pretty small (though not zero)! Another way to reduce risk, though maybe at the expense of “coolness”, is to give shares of an exchange traded fund (ETF). ETF’s are basically mutual funds that trade like stocks, so you can diversify and reduce risks.

So this Christmas, ditch the bonds and give something that will really appreciate (and be appreciated.) Stocks in everyone’s stockings! 

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Well, unless you’ve been living in a cave for the last couple of weeks, you probably know that the Writers Guild of America is striking against film and TV producers. Reading coverage of the strike, my first thought was, “Oh crap, more reality shows on TV.”
My second thought was that there were a few personal financial nuggets buried in all the talk.

1. Keep an Emergency Fund

I don’t mean that $1,000 in your savings account. Keep at least 3 months of your total living expenses in a liquid account. I personally would recommend 6 months. You never know when your guild is going to go on strike (or your employer downsizes, or you have to move without a guaranteed job, or…) I know, this is pretty common advice, but that is because it is so important and so neglected by so many people!

2. Develop Multiple Streams of Income

For many of the striking writers, like many of us, the loss of a steady paycheck from writing their show is a major financial blow. Even 6 months of savings can be inadequate if you have a long stretch between jobs.

There are some writers, however, who won’t take nearly as much of a financial hit. Why not? Because they will continue to make residuals from movies and shows they wrote before. Insurance agents are very familiar with residuals as well.

Regardles of what field you work in, try to invest time and money in efforts that will make you money apart from your paycheck. Consider starting a side business doing something that interests you, writing a story or book if you are a wordsmith, or investing in real estate either to fix and sell or to rent out. Learning to invest in the stock market more effectively or even getting a second job on the side are other ways to reduce your dependence on the almighty paycheck.

Notice that generally all of the above options are not mutually exclusive, no need to just do one!

3. Plan for Contingencies

It’s easy, particularly when you’re young, to think that nothing bad can happen to you. Insurance is for older people or those with lots of debt and dependents. Think again.

Losing your paycheck due to a strike or layoff is only one of the things that can put you in financial trouble. Illness or injury, on the job or at home, can do the same thing. Protect yourself with insurance.

Life insurance, health insurance, disability insurance, and even supplemental insurance like AFLAC should all be considered. For a young person, the cost of most insurance is so low that there is little reason not to have at least some coverage.

So while you may be sad that this season of Heroes is probably ending early due to the strike, at least here’s a few finance tips as a silver lining, right? 

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