Managing My Money
I have helped contribute to building a half-dozen+ PFM (Personal Financial Management) applications. I spent 4 years working at Yodlee where I helped shape parts of Moneycenter. Since I've left Yodlee, I've consulted with quite a few start ups who were/are building "Mint-like" applications. All of that makes it ironic that I am not that great at managing my own money.
That's not to say I don't know how to save money. I'm actually pretty cheap when it comes to a lot of things (most things). I can save money.
My big problem is not properly managing my savings.
I have an Ameriprise Financial Advisor. I've been working with my advisor since 2004. She is really nice and seems to know the market and makes recommendations all the time on what I should do with my savings. Most the time I just nod my head and agree with whatever she recommends. Stupid I know.
My advisor has done a good job of getting me diversified (i.e. spreading out my money in different types of things: stock, cash, bonds, funds, etc.). Through 2008, I definitely lost a lot of money like a lot of people. However, it would have been a lot worse if I didn't have some diversification in other things (cash and bonds).
So what is my problem?
My problem now is that my financial life is too complicated. I have:
- 8 bank accounts (spread among Bank of America, Wells Fargo and VirtualBank [yes, that is a real institution])
- 10 investment/brokerage accounts (spread amount AccountTrax, Ameriprise, Scottrade, E*Trade and Invesco Aim)
- 4 credit cards (Bank of America, Wells Fargo, American Express and Citibank)
If it wasn't for Moneycenter, it would take forever to figure out what my networth is.
Some of the above is because I have incorporated myself as an S-Corp for my consulting business and I have set up separate accounts for that. But it doesn't need to be so complicated...does it?
I took my first steps to simplifying earlier this week when I met my advisor. She did her usual: "Here is what is going on with your accounts, I think we should do xyz with this account, abc with this account, move some money into this account, etc. etc. etc.". After 30 minutes I replied back:
Don't get me wrong. I understand everything you just said to me. Most of it made sense. But here is my problem. If I had to come back here tomorrow and repeat to you how my money is spread around and more importantly why...I couldn't do it. I have no idea why I have $xxx in a Wells Fargo Ultra Short Term Muni and $yyy in a Wells Fargo Short Term Muni. I see it on paper but I don't know why. We've been working together for 6 years and I think my finances have just gotten out of control. What can you do to help me simplify.
This goes back a bit to my 2009 reflections where I said I want to do "More with less". I'm happy I ended this week with a little "Less" in my life.
I'm going to spend some more time this year looking at what else I can do to simplify. I read Ramit Sethi's book/blog "I Will Teach You To Be Rich". It has some good tips on simplifying and automating your money. I'll give it another skim and see what I can put in action for me.
What seems to work for you?
Labels: money, pfm, resolutions
posted by whatupwilly @ 8:00 PM
4 comments
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4 Comments:
This is fantastic: definitely a move in the right direction! I have also been amassing accounts left and right since moving to Asia (they like to do that, and see no harm in setting up a free account even if you assert that you'll never use it).
With HSBC (Premier, Direct, etc.) alone, I have at least 1 checking, 1 savings, 1 investment, 1 credit card ... in each of 3 countries. Craziness.
It's my goal this year to consolidate my stuff as well, as much as I can.
Willy,
Glad MoneyCenter still works for you... but I agree, it's so hard to figure things out... especially with unscrupulous FAs that when they quit their job attempt to take their account with them to their new employer (as happened to me this week!).
P
I was given the Automatic Millionaire by David Bach (http://www.amazon.com/Automatic-Millionaire-Powerful-One-Step-Finish/dp/0767914104). After reading it I thought, "hey! I already do that." When I got to financial advisors they say, "you should spread your money across more stuff." Bah!
@Peter - definitely still a big moneycenter user (since 2000 when it was OnCenter on my Palm VII :). I've been brainstorming about how Moneycenter could be enhanced to help me manage my accounts better. It does a good job of networth snapshots. But what I find it doesn't do a good job is actual performance. For instance, my networth in 2010 might have gone up 5%. But I just can't tell if that 5% is from good investments or from my income. I think that's why I'm constantly struggling on not really knowing if my money is working the smartest it can for me.
@Jordan - very interesting. The Automatic Millionaire actually calls out Lattes: "His discussion of the "The Latte Factor" shows that, to find money to start a retirement plan, a person with a modest income needs to make an up-front commitment to stop accruing debt and to reduce spending on such "wasteful" items as lattes and cigarettes." Whereas Ramit's book does in a different way: "Forget lattes — these super-tactical tips save you hundreds of dollars per year." and he links to a site that gives other savings tips. He also talks about in his book...if you love lattes, get one everyday. But cut out the things you don't love.
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