While banks fail, new, social banks thrive

[David Lay]

http://snurl.com/6t44x

[Phil Florian]

Maybe National City should have opened up a Smart Piggy account.

Good link and a neat idea.

[Bill Call]

Why is this a good idea? Defer gratification? Save for the future? Live within your means? Be independent? Stand on your own two feet? Take pride in what you earn and not what you borrow?

These are dangerous ideas that will do great damage to the economy. How do I know this? Weellllll...

At a time when people are overwhelmed with debt, owe more on their houses than they are worth and have a negative saving rate and live off next years (expected) income the Treasury Secretary announces an $800 billion dollar plan to...

Make it easier for people to borrow more money:

http://www.nytimes.com/2008/11/13/busin ... =yourmoney

It must be the right economic plan because these guys all went to the finest IVY League schools to earn their MBA's and PHD's.

[Phil Florian]

Why is this a good idea? Defer gratification? Save for the future? Live within your means? Be independent? Stand on your own two feet? Take pride in what you earn and not what you borrow?

Up to this point in your post you made sense and then for some reason you stopped. But yes, that is why it is a good idea.

[David Lay]

Looks like other banks are starting to embrace 'social' banking:

http://online.wsj.com/article/SB122947318410112313.html

[Stephen Eisel]

Looks like other banks are starting to embrace 'social' banking:

http://online.wsj.com/article/SB122947318410112313.html

great, the next subprime

[Charlie Page]

Looks like other banks are starting to embrace 'social' banking:

http://online.wsj.com/article/SB122947318410112313.html

Before I read the articles, my preconceived notion of a ‘social bank’ is a bank with a bar in it!

Go in, make a deposit/withdrawal and have a cold one. What a concept!

The Web-based sites are hoping people will use their services to aggregate all aspects of their finances -- tracking expenses and income, as well as credit cards, bank balances and retirement accounts.

Mint, one of the more popular of these sites with more than 650,000 registered users, allows people to track where they spend their money and pool their credit-card and bank-account information. And it recently added investment-tracking and analysis tools, so users can see how their investments are faring against benchmark stock indexes.

Call me old school, but I really don’t want every aspect of my personal finances contained in one website. Can anyone say identity theft?

Because of credit tightening and the weak economy, searches for credit-card offers at Mint spiked by about 100%, notes Aaron Patzer, founder and chief executive.

More people searching for more ways to increase their debt. “Paycheck to paycheck and living the dream, don’t forget about that fifty two inch big screenâ€

[Jerry Ritcey]

Call me old school, but I really don’t want every aspect of my personal finances contained in one website. Can anyone say identity theft?

I don't know about the other services, but Mint.com seems to have a decent security model. They state that they don't store your account numbers, phone numbers, address, or other things ID thieves might need to steal your identity. (source: http://www.mint.com/privacy/faq/)


Even if someone stole my Mint userid and password - which is pretty unlikely given the way I surf the net - all they could see is how much money my 401K lost, not any ability to change anything . At least, it's somewhat lower risk than if hackers broke into the various institutions you have money in.

[David Lay]

I agree with Jerry's sentiment - I use Quicken Online, which is similar to Mint, in that it aggregates all my bank accounts into one location. With it, I've been able to track my savings and spending much more closely, and the charts & graphs help me understand where my money is going.

[Charlie Page]

I would hope they have more than a decent security model, something like DOD standards. The firm I work for does attack and penetration testing on a lot of companies. I’ve heard more than a few eye opening stories from them about companies that think they are secure (and have all the certificates to prove it).

The one stop for everything aspect sounds nice and convenient but how does all your bank balance, credit card info, investments, etc get into your Mint account? If you have to input all balances and transactions, it defeats the purpose of convenience. If all that info is somehow linked into your Mint account and updates automatically then I need maximum security. If a security incident happens, all your eggs are in one basket. As it stands now there is a physical separation of each system and I’m willing to forgo some convenience to maintain that.

Sorry guys, you’re not convincing me on this one

[ryan costa]

they say you gotta meet the right people at the right country clubs to be able to invest in Bernard Madoff.

[Jerry Ritcey]

The one stop for everything aspect sounds nice and convenient but how does all your bank balance, credit card info, investments, etc get into your Mint account? If you have to input all balances and transactions, it defeats the purpose of convenience. If all that info is somehow linked into your Mint account and updates automatically then I need maximum security. If a security incident happens, all your eggs are in one basket. As it stands now there is a physical separation of each system and I’m willing to forgo some convenience to maintain that.

Sorry guys, you’re not convincing me on this one

It logs into your accounts using your credentials, but they don't store them. Someone stealing your mint info would see summaries, not usernames or passwords and account numbers. I am not sure that the fact you have multiple bank accounts makes you more secure. Wouldn't a breach at one net the hacker your SSN and other identifying info? I don't sell Mint.com so I'm not going to go into all their security measures.

Or to put it another way, if your bank tells you nothing about how it handles computer and account security with any specifics, does that make it safer? *wink*

[Will Brown]

I'm with the skeptics about keeping my data online. First, there is always the possibility of an accidental or intentional breach, since even the best security features have back doors that enable the designers to get into the system if something goes wrong. Second, the government appears to have a very broad license to obtain such information with a warrant, and they have a lot of resources to monitor and snoop, even if they don't have a warrant, as long as they aren't caught. And third, because everyone with an on line site is smart enough to say they have top-notch security and concern for your privacy, even if they don't, and if they don't, and data is stolen, it is on a massive scale and they don't have the resources necessary to make all the victims whole, so they just go out of business and start up again using a new name.

So I eschew all the offers of free on-line storage for my data. I do use quicken, but not the online version. That way my credentials are stored on my computer, not theirs. I do my banking on line, and enjoy the convenience. For example, I got my property tax bill yesterday, so last night I went on line and arranged for a bank transfer to pay the bill in January, when it is due, which saved me the cost of a stamp, and means I can spend January somewhere warmer.

I'm not sure if people with a mortgage get the information with the bill (I seem to recall that the bill went to an agent who paid the taxes out of the escrow account), but there was a notice with the bill that we can contest the appraised value of our property, but the form for that has to be filed by sometime in March 2009 (for 2008 taxes, which is what we pay in January and July of 2009). Since the media, and this forum, is full of horror stories about decreases in property values, I snooped around a little, but couldn't find evidence of many homes being sold at fire-sale prices; lacking evidence to show that my home is clearly overvalued, I decided not to file a claim. HOWEVER, in my research, I noticed that a surprising number of homes appear to be overvalue, and thus are paying too much tax. Just as an example, a home that sold about 5 years ago for $155K, then sold two years ago for $150K, has a tax valuation of, as I recall, $162K. It doesn't take much skill to get a tax valuation corrected (I've done it, with success, every time they do their three year reappraisal). so I think a lot of homeowners are missing out on some savings. The county treasurer has a web site where you can check your own valuation, and those of similar homes in your neighborhood, and see if you are being overcharged.

I'm not sure I understand what "social banking" is. Since I have been old enough to open an account, I have never seen a bank that doesn't allow you to open a savings account, or that won't give you your money when you need it to make a purchase. I think the idea that a "bank" will hold your hand while you save up enough to buy a washer is just eyewash. It appears to encourage you to spend all your money, rather than to actually save some. My current bank does offer alliances with some suppliers that gets you a better deal if you shop at them, but it has been doing this for more years than I can count, so its hardly a new idea, nor one that traditional banks have never used.

I don't think the save and then spend it scheme of the institution cited by the OP is much of an improvement in terms of our very low savings rate. When I married, the commonly cited rule was that you should amass enough savings to support you and your family for 9 months (sometimes 6 months was used) if something dire happened, and on top of that, you were to rent a small place and save even more until you had enough for a substantial down payment before you bought a home (and that was on top of your 9 month emergency fund). Credit cards were not common then, but when they started to become common, the rule was that you should use them as a convenience, rather than paying cash or writing checks, but you should never fail to pay the entire balance when it was due, as even then finance charges were exorbitant.

I think if we had stuck by those rules, we would not have the personal financing mess that now threatens our entire economy, and which will, I think, get worse as all the credit card debt we have been carrying comes due. Its a sad thing that we have changed so sharply from a savings economy to a credit economy, where people have been able to buy far more than they can afford, and now are losing their homes and their SUVs and their bass boats, with no concept of what their mistakes were, which probably means they will continue their self-destructive behaviors.