Shopping for Banks, Loans, Insurance, Investments, and Information That Helps You Make Money

by Richard Seltzer, seltzer@samizdat.com, www.samizdat.com

The following article is based on chapter 8 from Shop Online the Lazy Way, a book written by Richard Seltzer, which was published in August 1999 by Macmillan. It is available in paperback directly from the author or from Amazon.com. It is also available in a Braille edition from National Braille Press (www.nbp.org). This work is copyright 1999 by Richard Seltzer. All rights are reserved. Check the author's bio for a description of this book and why it was written.

Now that the rights have reverted to the author, he is free to update and revise this online version. Please send email to alert him of changes and interesting new sites that you have encountered.

Shopping for money? Yes, indeed. Ten or 20 years ago that term would have sounded very strange--at least for ordinary folks like us. But today, if you don't shop for the best bank, the best loan rate, the best prices on insurance, the best retirement plan, the best way to reduce your income tax, and the best investments, you are throwing your money away.

The Internet offers hundreds of quality Web sites that deal with every aspect of your personal finances. If you are a fully functioning member of society (not in prison and not under age), you are almost certain to find information and advice on the Internet that can save you or gain you money--significant sums of money, not only for today, but for tomorrow and the next day, too.

When you are talking about money, having the right information or lacking it can make a huge difference in the amount you can save, gain, or lose. What you don't know about finance issues can cost you big time, both in the realm of personal finances and in the realm of investing.

Unless you are an expert investor, you most certainly can find new ways over the Internet to save or gain money that you've never before considered. Once you have tasted the fruit of knowledge regarding money, you must taste again and again and again. Your days of blissful ignorance will be over. You will not be able to rest until you have checked all likely sources of advice and information before making an important financial decision. You will read article after article, even when they are on the same subject, because one article may have an unexpected detail that makes all the difference in your unique case.

It's no wonder that Web sites featuring financial information are multiplying like gerbils. One individual Internet user with an important pending financial decision might easily look at dozens, even hundreds, of screens a day. And people who use the Internet and get hooked on investing for gain will be tempted by the wildly fluctuating market, the ease of online trading, and the low online transaction fees to buy and sell, and buy and sell, over and over again. With the wildly increasing interest in online money activities, every online financial company is crazily fighting to gain every possible customer's attention and win that customer's loyalty.

As we take our online shopping tour of Web sites that relate to money, we'll first consider sites that focus on personal finances and teach you how to manage your money well. Then we'll look at those sites that focus on what you can do if you have money to spare and are anxious to get a piece of the fast-paced online investing action.

Doing the most you can with the money you have

Be forewarned that the online realm you are about to enter is enormous. Because there are so many Web sites that deal with managing personal finances, begin by scouting the online territory to get a sense of what type of information is available and how it might help you. To get you started in the right direction, first take a quick look at three sites designed for the beginner: Quicken and MoneyCentral have a multitude of articles and "calculators"--online programs that help you figure out what money management considerations are best for you. These programs ask you questions about your personal financial situation, and, based on your responses, the program calculates the financial consequences and points you toward possible alternatives to your current approach. At Quicken, look especially at the section "Life Events."

About.com provides volunteer "guides" for each of hundreds of different subject areas on the Internet. These guide scour the Internet for information related to their subject, and provide helpful links and articles for their visitors. Personal finance is one of the subjects they handle extremely well.

When you enter the About.com personal finance section, you'll notice that the Web site isn't as polished and flashy as the Quicken and MoneyCentral Web sites. But the articles and links you find there, as well as the site's opportunities for discussion with other online people in situations similar to yours, will probably prove more valuable to you in the long run.

When you visit the MoneyCentral Web site, check the "Banking" area (moneycentral.msn.com/banking/home.asp), and click on Manage Debt. In that unlikely place, you'll find several very helpful calculators. Of particular interest is the calculator called the Instant Budget Maker, which you will find in the "Create a Budget" section. Enter your family income and a few other facts, and you'll get back a detailed list of how much the average family like yours pays for housing, transportation, food, etc., based on federal statistics. Taking a look at what other families spend is a good, realistic way to start your budget.

If you have a pressing financial problem, first focus on that problem, of course. If, however, you are fairly worry-free, approach the Internet's personal finance information with an open mind and explore finance-related Web pages links that grab your fancy. Keep an eye out for an unexpected financial benefit, a money choice you didn't know you had, or a piece of personal finance information that you had no idea was available. Take brief notes about each of these three introductory sites: what sections look interesting, what articles you might want to read, what calculators you might want to use. But don't try to read and do everything now on your first visit; otherwise, you'll never have time to familiarize yourself with all the other financial resources available on the Web.

When you have checked those first three recommended Web sites, you should next check out the advice at the following additional sites, similarly taking notes as you go:

Remember, in the Web's vastness, you no longer have to settle for a "one size fits all" information solution. You might very well spot a Web site that offers the perfect information for you. If you continue to research the lesser-known Web sites and follow uncommon links, you'll find that the potential savings and peace of mind are well worth your extra effort. So, don't stop with the most common and best-known sites. As you continue to see what financially related information is available on the Web, also scan the names of the sites linked to at:

Banking over the Internet (a few of the many)

The Internet gives you an opportunity to take charge of your personal finances, in unique ways and with a degree of control never before possible. With the wide range of online banking services now available, you can shop for the best financial services, compare options, and readily change services that you could not easily change before the advent of Web banking.

Today, nearly all traditional banks have Web sites. Some of these Web sites are simply online brochures, featuring only static marketing content. Increasingly, many bank Web sites now provide methods for customers to perform online tasks without having to visit a branch or make a phone call. With most bank Web sites, you can get account balance information, transfer money from one account to another within the same bank, and apply for loans and credit cards. You can have your salary automatically deposited in your account. And, with your permission, the bank can automatically deduct loan payments from your account. Some bank Web sites provide your account information in a form that you can directly download into your computer's personal finance software, like Quicken or Microsoft's Money.

Just keep in mind that a handful of banks insist that their customers use the highest available level of encryption security when accessing their files online. If that's the case for a bank that you want to use, you will need to download the "strong encryption" (128-bit) version of your favorite browser, as discussed in Chapter 1.

If you would like to find an online bank, the best place to start is to check out banks with branches in your area. You can search the Internet for Web sites of the local banks you know by name, often just by entering "www.name.com" in your browser's address window, where "name" is the actual name of the bank. Be sure to compare each bank's services and offers to find the best deals.

After you have checked the Internet for local banks with Web sites, you should also check the banking section at

MoneyCentral moneycentral.msn.com/banking/home.asp to compare the rates offered by various (but not all) online banks. You can also check the Security First Network Bank www.sfnb.com--the first bank to exist only on the Internet, operating without any physical branches.

Before you decide on an online bank, you should also check several banks that have gained a reputation for their use of the Internet:

Remember, you don't have to do all your banking with the same institution. One bank might offer you free checking and free ATM service. Another might have the lowest mortgage rates. Still another might pay the highest rates on IRAs. Check the lists later in this chapter for sites that provide you with advice, calculators, and price/rate comparison in such areas as loans and retirement.

Beware of online bill-payment services

When it comes to online banking, you need to be cautious about one important area. If you are tempted by a bank's online bill-paying service, take a very close look at the terms and details before you sign up. When you first consider online bill paying, it's natural to assume that when you enter an order for your bank to pay a bill, the bank pays the bill automatically, electronically, and instantaneously. However, some online bill-paying services hold your payment money for as long as two weeks, aggregating the payments made by you and others to the same business, and then sending paper checks by regular postal mail to pay all the bills at once. This method of bill paying can cause severe problems in potential past due bills.

I was stung by this very problem last year around Christmas time. Proud to be taking advantage of the latest technology, delighted not to have to pay for postage, and believing that I now could keep tight control on my checking account, maximizing the "float" available to me, I paid dozens of bills online. The next month, I got socked with dozens of late charges from those companies I had paid with such pride and satisfaction. My online bill-paying service had lumped my payments with those of other individuals using their service to pay the same debtors, and then issued paper checks to those debtors. With the slowness of Christmas mail, the paper checks arrived after the due dates. As a result of this situation, I wound up with late charges and a messy-looking credit record that took many phone calls and letters to correct.

As more and more people pay bills online, this "delay-to-pay" method used by some online banks is certain to change, making direct electronic payment to businesses of all kinds widely available. But until that time, watch out for services that just mail checks the old-fashioned way.

Friends, Romand, bankers, lend me your money

Many financially related Web sites offer several different types of information. If you are looking for a competitive mortgage rate, check the do-it-all real estate sites discussed in Chapter 10. And when considering a loan, the more well-known personal finance sites discussed in this chapter also include loan-related information. But several other Web sites are dedicated to helping you determine your loan needs and provide you with advice on comparison shopping for the best rate and terms. Here is a list of suggested loan-related sites: The major credit card companies also have their own Web sites. Here is a list of those sites: To check your personal credit reports, consider a credit monitoring service like ConsumerInfo.com (www.consumerinfo.com), or go straight to the major credit rating companies. These sites typically charge a subscription fee for their services, but they may offer free samples (e.g., 30 days).

Here is a list of the major credit rating companies:

Income tax survival kits

How many times have you been in the midst of your last-minute tax calculations only to discover that you need some form that you don't have, or that you need to read some IRS booklet to figure out what you need to do next? Perhaps these needs finally drove you to pay for a tax book with lots of forms printed in the back or to hire a tax preparation service.

With the IRS's Web site, you can now print outtax forms and booklets provided directly from the Internal Revenue Service (www.irs.ustreas.gov). To be able to read and print IRS forms and booklets, you will need "Adobe Acrobat" software. If you don't have this plug-in, you can download it for free from the IRS site and follow the installation instructions.

In addition to the information provided at the IRS site, the following sites will provide you with tax advice and information. Another set of sites provide massive lists of links to sites with still more information--enough to meet every imaginable tax-related need. Some of these are maintained by companies, other just by knowledgeable individuals who scoured the Web for this kind of information for their own purposes and provide the lists of links for the benefit of all.

Additional Tax-Advice Sites

Lists of Tax-Related Links If you make good use of these online resources, you should be able to do your taxes yourself, or at least help your tax preparer by making better tax-related decisions and doing a better job of recording, documenting, and organizing information.

While you are gathering tax information, you might also consider buying a PC tax preparation program and filing your taxes online. If trying this approach appeals to you, consider:

Reducing the risk of buying the wrong insurance

In the past, you might have felt dependent on an insurance agent to provide you with advice on what you might need in the way of life or home or automobile or health insurance. You might have felt a bit uncomfortable about how much you were paying, unsure as to whether you were overinsured or that the companies you agent represents don't offer the best rates. Now you can do some research on your own, and either use the facts as a new basis for negotiation with your agent or buy insurance directly from the insurance company.

The Internet's insurance-related Web sites can help you learn what your options are and also will provide comparative pricing information. Some of the best insurance information Web sites are:

If you are considering doing business with a company you never heard of before, you might also want to check Weiss Ratings www.weissratings.com. This consumer-advocate site rates the financial strength of 16,000 institutions, many of which are insurance companies.

Retirement planning and advice

Increasingly, individuals are taking control over the investments being made with their retirement funds. Stocks and bonds and mutual funds aren't just for the rich. They are also for folks who have retired and depend on them for their only income. Hence, sooner or later, we'll all need to learn about investments, especially long-term ones.

Quickly, can you tell me the difference between a traditional IRA, a Roth IRA, a 401(k), etc.? If you have one of these plans, what investment funds should you select to maximize your return or to maximize your security?

To help you sort your way through these complex and changing issues on which your financial future depends, consider visiting these Web sites:

Investing for gain--if you have money to spare and are willing to risk it to get more

You'll find that it's a short step from shopping for the best loan and insurance rates to shopping for mutual funds for your retirement plan, and from there to dabbling in online trading. With online trading, what had been a game for the rich is now a game for the masses. If you try the online trading game, just be sure you are using money you have to spare, not the weekly food money. With online trading, there are no guarantees that you'll do well with your investments, even with the very best news and advice.

Win or lose, the online trading experience can become addictive, bordering closely on the realm of gambling. The ease of action, the real-time, now-or-never thrill of catching a fleeting piece of information and acting instantaneously bears little resemblance to the realm of carefully thought-out and slowly executed long-term investment.

Yes, with online trading, money is won and lost, but at lightning speed. And the online trading experience itself is likely to become an emotional one as well as a form of live entertainment, where the objective is not to earn money so much as it is to experience that winning sensation.

The Internet has a large number of high-quality online trading sites. This fact alone should give you a clue that lots of people hope to make money from your online trading activities. Remember that someone will win in the online trading experience, even if you don't, so proceed with caution as you trade online. Many of these sites are news-related, because timely and accurate news is so important in the online trading game.

Investment Advice, Stock Prices, Information about Companies, and Financial News

Some sites provide a wide range of information from purportedly unbiased sources:

Other sites provide a personal touch, with the unique perspective of individuals who have gained a reputation for "betting on the right horses": The online versions of well-known magazines and newspapers provide another rich resource for finance-related news. In most cases, the current issues are available for free. At some sites, you have to pay a subscription fee to get full access to resources (including searching through back issues). You can also subscribe to personalized news services (for free or for a fee) which provide you with pre-filtered feeds of the kinds of news you say you want. Some of the hottest stocks today fall into the "Internet" or ".com" category. Several sites focus on that set of companies and related trends. Some sites focus on global economic trends and how they are likely to affect markets: The major stock exchanges also have their own sites, with a variety of information related to the markets they serve. In addition, an enormous variety of sites take unique approaches that, depending on your individual circumstances, could prove very valuable to you: Online Trading

If and when you are ready to begin trading, you should check the top trading online companies, each of which offer their members a variety of information resources along with the ability to do your buying and selling rapidly, at low cost, over the Web.

Before diving in, you should check an excellent tutorial, The Gomez Investor's On-Ramp, an "online investing primer." This series of files begins at www.quote.com/gomez/content/step1.htm and covers opening an account, researching a stock, entering your order, and reviewing your account.

Also, keep in mind that online trading involves rapid-fire action, and you don't want your gun to jam just when you "see the whites of their eyes." When evaluating online trading companies, carefully consider their reputation for allowing their customers access during busy times. The information might be great, the look and feel of the site just what you want, and the transaction fees amazingly low. But when the market goes crazy, the traffic to that site will go crazy, too, and that's when you absolutely, positively need to be able to connect. The top companies appear to do this very well, in most circumstances. Beware of the newcomer who looks good on the surface, but may not yet be equipped for crisis mode. You don't want to get locked out due to a traffic problem at the very moment you have to buy or sell.

Full-Service Brokers and Money Management Companies

Depending on your timeframe and how much money you have to invest, you may also want to consider the traditional full-service brokers and money management companies, all of which also have a presence on the Web.

What's going on? Why is all this great info available for free? Will it continue?

When you realize how much excellent information is available for free at finance-related Web sites--information that used to be closely held for members only, or sold at a high price--you begin to wonder, "What's going on?" Your first guess might be that this is like the grand opening of a department store or a mall, with lots of free offers to draw crowds. Then once the hoopla is over, the free stuff disappears. That is very unlikely in this case. Expect more, not less, great information and online calculators and decision-support tools. Expect more finance-related Web sites and the further growth of the ones that are there.

These sites are supported--very well supported--by advertising. When you visit a major money-related site, you'll see bright-colored flashing banners intended to tempt you to click to other money-related sites. The revenue from these banner ads pays the way for financial sites to provide you with all this diverse, rich information for "free."

If you buy a house, the folks in the real estate business might see you again in a decade. If you buy a car, you might come back again in three years. But if you choose an online bank or buy an online stock, these financial sites might see you again tomorrow and the next day and the next day, for the rest of your life.

To win your repeat business, online trading companies like E*Trade and Charles Schwab are reportedly spending as much as $250--$300 in advertising for each new customer they acquire. A single company like that might spend $150 million a year for advertising. And there are many companies competing for your attention in this same arena, driving each other's advertising spending upward.

Who is the target audience for their advertising? Primarily, these companies want to reach people who are already online and who are already looking for financial advice. That means you are a hot investment for them. Likewise, insurance companies, mortgage companies, banks, and other financial services companies all want your business. When you visit a Web site that provides good, free financial advice, you may be trying to make key financial decisions. It's no coincidence that you find these flashy banner ads located right at the Web sites maintained by the kinds of companies that can help you with these critical financial issues.

A typical ad rate on the Internet today is about $25 per 1,000 page views or about 35 cents per click-through. In other words, every time you look at a Web page with an ad on it, the company providing you with that "free" information may be getting about 2-1/2 cents just because you clicked on the ad. Or in the alternate payment approach, every time you click on a banner ad, the company who created that page gets somewhere on the order of 35 cents because you decided to take a look at the advertiser's site. The information provider can attract more traffic and hence more advertising revenue by providing good and useful content. The likelihood that people will click through to the advertiser site is increased by closely matching the content of the ads and the content of the Web pages where they appear.

In other words, don't expect this bonanza of information to go away any time soon. Rather, expect, enjoy, and profit from enormous quantities of high quality, useful information, advice, and tools.

Sidebars for this chapter --

For fun ways to teach kids about money and investments, check Kiplinger's Kid's and Money www.kiplinger.com/kids and also Kids' Money pages.prodigy.com/kidsmoney.

You can also use the Web to get related information from the United States government in print form. Check the government site called Money www.gsa.gov/staff/pa/cic/money.htm, which lists numerous free and cheap booklets about personal finance.

For a ranked list of the top 65 Internet banks, with reviews of each, check Gomez www.gomez.com.

Do you have children in college or nearing college age? Check the Financial Aid Calculators at the College Board cbweb1.collegeboard.org/finaid/fastud/html/fincalc/fcintro.html. With this online calculator, you can quickly figure out how bad off you'll be once your children hit college age.

Dynamically calculate your mortgage repayments at Kal Jeacle's Mortgage Calculator www.jeacle.ie/mortgage. With this calculator, you can either type in your numbers or drag sliding bars with your mouse, and immediately see the impact of your choices shown in graphs and tables.

Feeling down because you didn't win your state's mega-lottery this week? Go to the Personal Finance section at About.com pfinance.about.com, click on "Windfall Wealth," and read about the headaches winners face. You'll feel better about your current uncomplicated lifestyle, and you'll also be better prepared when you hit it big.

Considering buying some software to help manage your finances? Check the sites suggested by LookSmart www.looksmart.com. To see this site's list of recommendations, click on Family and Home; then select Personal Finance; and then select Software.

Take a break. Go to About.com's Personal Finance section pfinance.about.com and click on Financial Funny Bones. At this location, you'll find links to five sites packed with money-related jokes.

Are you curious about a key personality at a company you are interested in investing in? Want to know what other businesses this person is involved in? Check www.edgar-online.com/people. This site is the best privately managed online source for information and documents recorded and maintained by the Securities and Exchange Commission (SEC).

Some people prefer not to have to look for news, but would rather have news directly delivered to them, in real time. If that's your style, go to PointCast (www.pointcast.com) and download the site's software. PointCast replaces your screen saver and continuously delivers the latest headline news to your PC, so long as you remain connected to the Internet.

You just heard about a "hot" Internet stock. To get the company's domain name, go to AltaVista www.altavista.com and enter into the search window the query:

For a ranked list of the top 20 online brokers--including reviews of each--check Gomez www.gomez.com.

For more resources, check the Money section of our Online Shopping Directory www.samizdat.com/shopping3.html#money

The rest of the book (Shop Online the Lazy Way):

Part One covers aspects of online shopping that apply no matter what you want to buy.

Part 2 covers special cases, where there are major differences in how you shop based on the kinds of things you are looking for:

Published by B&R Samizdat Express, 33 Gould St., West Roxbury, MA 02132, seltzer@samizdat.com

You can order the book Shop Online the Lazy Way directly from the author (seltzer@samizdat.com) or from Amazon.com If you buy it after clicking on this Amazon link, Richard will get some money back from Amazon as part of their Associates program, as explained in this chapter.

You may also want to check Richard's Online Shopping Directory www.samizdat.com/shopping.html, which has links to all the sites mentioned in the entire book, plus sites he has learned of since the book went into production.

You are also welcome to participate in Richard's weekly chat sessions about Business on the World Wide Web, Thursdays, from noon to 1 PM. For details and edited transcripts of previous sessions (dating back to June 1996) check www.samizdat.com/chat.html

Related articles and reference materials:
Online shopping advice
All about movies
The Online Shopping Directory

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