I like the new columns from Money Magazine featuring “The Mole,” an undercover financial planner. Like me, The Mole prefers to write anonymously to protect his or her identity. While my reasons for doing so pertain more with my desire to post sensitive personal information, The Mole maintains incognito status because he tends to speak out against the practices of his contemporaries and associates.

Some time ago, I considered publicly becoming a financial adviser or planner. Eventually, I decided it wasn’t the path I wanted to take, but the resulting discussion was interesting. So what does a would-be financial planner need in order to be hired and trusted by customers?

Perhaps a certification. The Mole says “maybe.” He has good things to say about Certified Financial Planners (CFPs), as he is one. This is a quality certification program with stringent requirements. Unfortunately, not all certifications require rigorous education and some have a loose grasp on ethics and fiduciary responsibility.

Now by my last count, there were more than 100 financial designations. Many, like the CFP, take a significant amount of time and expertise to master before the designation is awarded… Unfortunately, many of the others require nothing more than brief courses geared toward sales techniques; how to use emotions to sell annuities to seniors is a popular one.

A strong designation would reduce the chances your financial planner turns out to be sleazy like these annuities salesmen profiled by Dateline NBC.

However, even a designation like CFP does not guarantee the quality of the planner. Regardless of the designation, it’s best to get referrals from satisfied customers before selecting your financial planner. Don’t know anyone who is retaining financial advisory services? You can get referrals from the Financial Planning Association or the National Association of Personal Financial Advisors.

With referrals in hand, research your potential advisers with the North American Securities Administrators Association.

Walter Updegrave, another columnist for Money Magazine, submits the following:

I’d be wary of any advisers who contact me unsolicited, and doubly wary of ones who run free retirement-planning lunches or seminars. Many times such sessions are just a come-on to sell high-priced investments.

The lesson is to remain skeptical. If your adviser isn’t listening to your goals, suggesting products that are right for you, or trading frequently, it may be time to fire him or her, regardless of the adviser’s certification.

Do I Really Need a CFP? [Money Magazine]
Cracking the mysterious code of financial advisers [Money Magazine]

Following E*trade’s announcement that they were slightly increasing the interest rate on their Complete Savings Account to 3.15%, I’ve updated the list of savings and checking account interest yields. There have been a number of changes since the last update, including the following.

• UFB Direct dropped from 3.35% to 3.01%.
• Kirkpatrick Bank’s Savings Square dropped from 3.25% to 3.05%.
• E-Loan increased from 2.75% to 3.01%, plus they are offering a short promotion for new money at 3.75%.
• Presidential Bank decreased from 2.75% to 2.6%.
• VirtualBank decreased its entire hierarchy of rates with the lowest level down to 1.77%.

Due to popular demand, I’ve added iGoBanking to the list. This bank’s savings account is offering 3.28% APY currently, placing them towards the top of the list, below only OneUnited and Washington Mutual.

Yes, irreplaceableness appears to be a legitimate word. Even if it weren’t, there’s a good chance you could infer its meaning without doubt. It wouldn’t matter if the word actually appears in a dictionary. Now that that’s out of the way…

My former boss was laid off last week. It had only been a matter of time. Some time after I left that department to work in my current location, her department was moved to another building to take advantage of efficiencies with another group that performed similar services for the company. The truth is that there was a lot of redundancy in this function around the entire company, and once the departments were combined, it made sense to streamline the management.

I feel horrible that someone I’ve known for many years has lost her job. The reason I left, however, was because she wasn’t a very good manager and I was not learning anything from her other than what not to do.

My current boss, K., gave me the news of the “rightsizing” of my former boss late last week. K. mentioned that this was a perfect example of how one must make one’s self irreplaceable. At first I agreed. Irreplaceableness means that one has job security. When times are tight for a company, and they must decide who to let go, they will start with anyone whose job is redundant, anyone who performs poorly, and anyone whose functions can be assumed somewhere else.

Some time after our initial conversation, I couldn’t get the idea of irreplaceableness out of my mind. Something didn’t sit right with me. I began thinking, and that can be dangerous. I contemplated how one must create the belief that one is irreplaceable.

To become irreplaceable one must drive against forces that help a team work efficiently and smoothly together. In my department, we cross-train as much as possible, so people are free to take vacations at almost any time. We work on enhancing our procedural documentation and process flowcharts so that at any time someone with moderate knowledge and training can step in and muddle through some of the more complex tasks (and so we can ensure the proper controls and quality reviews are in place). If someone were to disappear off the face of the planet, it might take some time, but the group would recover.

Here is one way I reduce my irreplaceableness for the benefit of the group. My skills with Microsoft Excel are above average in comparison to most of my coworkers. I was happy to present a few classes on some of the software’s more useful functions. These classes allowed my coworkers to rely on me less, reducing my irreplaceableness, yet this approach still seems like the right thing to do for my own worth.

To be irreplaceable in this environment would require keeping secrets about how I get my work done. Even if I’m quite good at my job, an expert with great personality and attitude, if I work as a team player I will always be replaceable. So will everyone I work with.

Recently, my company’s CEO, the head of this large corporation for the past couple of decades or so (and I realize I’m being ambiguous) decided to retire. His decision actually came several years ago, but it was more recently that he made specific plans and set an exit date. He was a well-admired and recognized CEO throughout our industry and led this company through some rough times (before I was an employee) and oversaw significant growth (after I became an employee, not that this fact is relevant). He succeeded with goals where previous CEOs of this company perhaps failed.

Yet, even he was replaceable. The Board of Directors decided the new CEO would be someone from within the company, and quickly put a succession plan into place for a smooth transition from one CEO to the next.

If even the CEO of a multi-billion dollar company can be replaced, it almost seems arrogant to think that I, or any other employee of this large company, could be irreplaceable. Even striving for such a goal would be antithetical to cultivating good working relationships with colleagues.

Photo credit: hagerman

To help Americans pay for the increasing price of a gallon of gas, Hillary Clinton is suggesting a suspension of the 18.4 cent per gallon tax on gasoline and 24.4 cent per gallon tax on diesel from Memorial Day through Labor Day while enacting a “windfall profits” tax on the oil companies which have been making money hand over fist through out 21st century so far. John McCain is also in favor of a gas tax “holiday,” but Barack Obama calls this strategy pointless and possibly more harmful for the economy.

Obama figures that the gas tax holiday would save American consumers about 30 cents a day while underfunding the federal fund that pays for road improvements. And while we’re in an election year, Obama points out that Clinton and McCain’s positions are political posturing moves rather than good economic solutions.

Ignoring the fact that when a tax holiday is in practice, gas prices might simply rise to negate the savings and match what consumers are willing and able to pay, the 18.4 cent theoretical reduction in a gallon of gas will be almost invisible. With a gallon of gasoline around $3.60 for me here in New Jersey, this 5% discount doesn’t even bring the price down to its level from a few months ago.

Clinton suggests paying for the loss of government income by increasing windfall profits taxes for the oil industry. If there is a gas tax holiday, should oil companies pay for the loss of government income through taxes assessed for earning significant profits in this economy? I feel no pity for the large corporations, and I wouldn’t mind if their taxes increase. However, I don’t think this solution would improve the economy.

As a country, we seem to be willing to continue spending on gasoline no matter what the price, but perhaps that is only because we have little choice. If we stop driving, we stop going to work, earning money, and feeding our families. We’re ready to spend as much on gasoline as necessary to continue our lives, giving oil companies the freedom to keep pushing prices upwards.

The oil industry obviously is not happy about the idea that their profits could be taxed, claiming that taxes would eat into available capital for new production, but their profits are mostly used for buying back stock rather than research and development.

Rather than Clinton’s plan to tax oil companies, McCain wants to freeze or cut spending to pay for the gas tax holiday. Obama thinks these suggestions sound nice to voters but would have little real effect. What do you think?

Photo credit: x-eyedblonde
Obama attacks Clinton’s gas tax plan [AP]
McCain calls for a summer ‘gas-tax holiday’ [AP]
Taxing oil profits: Proceed with caution [CNN Money]

On Thursday, E*Trade Bank will increase the interest it pays on the Complete Savings Account from 3.01% to 3.15% APY. It’s a small move but it could be a good sign for savers if other banks follow suit.

My company stock purchase plan account is held at E*TRADE and I plan on opening a savings account there the next time I sell my shares later this year.

This is the first part of an open-ended series about major decisions that require consideration from a financial angle. The important point to note is that the financial angle is only one of many aspects that should be considered, and this fact is often ignored in some writing circles. This part pertains to purchasing a car.

When writing about personal finance, there is an expectation to center discussions around money. For example, when a personal finance writer tackles the decision to purchase a car, arguments are usually for slightly used rather than new (to save the inherent depreciation “expense” associated with driving the car off the lot), buying rather than leasing, Kelley Blue Book’s used car values, and all operating expenses (figured conveniently in Edmunds.com’s useful True Cost to Own ratings).

Personal finance writers infrequently take other, less measurable factors into account. Aspects like “fun” and “prestige” do not often rank high on writers’ list of factors effecting a decision in which money plays a large role. In fact, these human desires are sometimes ridiculed or seen as obstacles to overcome. After all, a car is simply a tool to help you move from point A to point B in a fast and safe manner. Perhaps it is the automobile industry that has convinced us that there is more to driving than a mode of transportation. Otherwise, why pay more than the cost of the car that finds the right balance between safety and affordability?

I could write a list of ten financial things a purchaser should consider before buying a car. In fact, here is that list.

1. Consider not buying a car if you already have one.
2. Consider buying a slightly used car rather than buying a new car or leasing any car.
3. Consider selecting the base model rather than one with the extra features.
4. Buy the car with the lowest True Cost to Own.
5. Get a CarFax report so you won’t be in for any maintenance surprises.
6. Negotiate the final price before discussing trade-ins or financing.
7. Research your choices for their reliability in reputable, independent sources.
8. Read the contract or agreement before you sign.
9. Don’t get the dealer’s extended warranty.
10. Don’t take on debt.

While those suggestions will help you spend no more than absolutely necessary, they are rules to be broken. I’ve broken several of them with my most recent purchase (a 2004 Honda Civic when it was new). Even though I new I could have saved some money immediately by buying a lightly used vehicle, I didn’t. I expected to be a heavy driver and I wanted as much reliability as possible for as long as possible, so for me, a new car was a better option. I also took a low-interest loan to pay for the car. I was prepared to pay cash but a very low interest rate was offered to me, so I was able to let my savings earn more interest while paying off the loan.

Consider this. New Jersey residents take an average of 32.4 minutes to get to work each day. That adds up to almost 12 full days of non-stop driving each year. That’s a lot of time to spend in one environment. I have no problem whatsoever with someone who wants to make the time spent traveling as enjoyable as possible. That enjoyment may come at a cost.

Buying a car is just one example—and not even the best example—of how major purchasing decisions can, and often should, take more than just the “bottom line” into account.

As I logged into CitiBank’s website today to check my recent activity and compare transactions against what I’ve entered in Quicken, I was greeted by a harrowing message, informing me that my account may be at risk for unauthorized use. They have restricted my online access, and I cannot view my recent activity or past statements. Citi has apparently issued a new credit card with a new number, which I should receive shortly.

I used my credit card today to pay for lunch and the transaction was not refused, so it seems that the block must have been placed later this afternoon.

I’m wondering what legitimate activity I might have had lately that would have triggered a review. It’s possible my traveling might have been a red flag. I’ve used the credit card at home, San Francisco, San Diego, Manhattan, and Queens within the last month.

While I’m happy that Citi is evaluating my transactions for possible fraud, and certainly if there has been unauthorized use, I will now be required to contact my utilities and present my new credit card number once I receive it.

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Welcome to Consumerism Commentary. If you are new here, consider subscribing to our RSS feed (more info here). Consumerism Commentary always has the latest information about the economic stimulus payment.

Several disappointed people contacted me today. They expected to receive their economic stimulus payment deposited into their bank account today but they have not seen the deposit posted online yet. According to the payment schedule, individuals whose Social Security numbers end with two digits between 00 and 20 and who have direct deposit banking information on file with the IRS should have received their deposit by today.

If you’re looking for your money, check the schedule first to ensure you’re not jumping the gun. Keep in mind that this schedule is only “accurate” for those who filed their taxes by the usual deadline.

After you’ve verified that the government expected you to receive your payment already, you can fill in a form online to ask the IRS about the status of your payment. This form will apparently only work for those who filed their tax returns over 6 weeks ago, so it sounds like the government may be late with some payments depending on when you filed.

Don’t confuse the “where’s my stimulus payment?” form with the “where’s my refund?” form.

Earlier today, I posted the first part of my monthly financial reporting, my April 2008 balance sheet. Publishing these reports online helps keep me accountable for my decisions and forces me to take a look at my progress each month.

After a great February and a good March, April was not quite as impressive. In fact, this is my lowest net income since last April. My net income for the month was significantly lower due to two specific reasons. I’ll explain more following the data. The chart is hard to read within the post, but if you click on the image, a larger table with legible numbers will open in a new window or tab. Read the rest of this article »