Tuesday, March 27, 2007

A trip to the bank

I had a 100K 6.45% CD mature today, so I took a trip to my bank to deposit the proceeds. Since I do all of my regular banking transactions on-line, whenever I go into a branch office, it is invariably for a transaction involving a large dollar amount. I get the same predictable comments every single time. For withdrawals or wire transfers:

"Congratulations, buying a home?"

For deposits:

"Getting ready for a down payment on a home?"

or

"Do you have a financial advisor?"

I think I have gotten one of these three questions in my last 10 trips to the bank.

The last time I didn't get one of these three questions was when I made a deposit of a 500K+ check from the IRS. She had a lot of questions for me, but I most remember the first comment:

"Wow, you must be really happy." I was happy to finally get my money back, but I didn't explain to her that the only reason I got such a large check back was because I hideously overpaid my estimated taxes (see http://rags2richesfinancial.blogspot.com/2007/03/financial-decision-history.html). Getting an IRS refund check is not a good thing - hitting safe harbor in a big tax year is!

9 comments:

JT said...

I'm glad to see you posting more; I've been following your blog for almost a year (I put the first comments on your "to post or not to post" entry).

Since that time I've checked back religiously to read your updates.

I'm getting pretty tired of my 9-5 jobbie job. Any small business ideas you have seen out there that seem interesting? 1800gotjunk looked pretty good but their franchises are sold out in my area.

Keep posting!

frugal zeitgeist said...

It's nice to hear what life is like on the other side from someone who's gotten where I'm trying to go.

How about that Galapagos trip?

techguy in los altos said...

Since I've drawn out large sums from my brokerage account, they are asking the same typical questions through a third party company.

Are you buying a house? Remodel? Getting married? Big Honeymoom!?

This brokerage house doesn't want to lose clients to their competitors and to their credit they are trying to find out where this money is going?

In my case, there are a few private equity deals that I am working in emerging markets which unfortunately the standard brokerage house can not offer.

Rags 2 Riches said...

jt, wow I didn't even know I had any regular readers since I haven't been too good about posting regularly. I apologize for not having more content, I poured way too much time into my job the last several months.

After researching franchises, I basically gave up because they didn't make much sense for my situation, but they may make sense for someone else. For example, a fast food franchise may generate 50k income, or 100k if it's really successful (after pouring 500k - 1m investment into it). I'd have to own a few of them to replace my salary. Now, I have no real passion for running fast-food franchises, and have a natural tendency to take the easy road... so comparing running two or three franchises to my cushy desk job, there's just no comparison.

From talking to franchise consultants, I gather some of the best returns are in payday cash lenders and automotive. Regarding payday lending, I don't have any desire to make money off the poor. I know people I can hire to run an automotive business, but the startup cost is pretty high, I think $1.5 - $3m. This is more than I'm willing to risk for a first foray into business.

The lowest cost franchises are cleaning services or window blind sales/service, because you can easily do these yourself without hiring help, and you have no startup costs because you operate out of your own home. Again these don't appeal to me because I'd have to grow these businesses for years to approach my level of income.

Plus of franchises is that they provide you a business plan that has had some success in the past. Minus is that the franchise fees eat up a lot of profits on the well-known brands - the franchisers are business savvy.

My thought is that to generate the kind of income that would interest me, I'd have to go into some other business. A couple of ideas I hope to look into:
1. Import/export between Asia/US.
2. My uncle has some relationships with investment bankers in Asia. They seem open to teaching me the ropes if I'm interested.

Rags 2 Riches said...

fz, actually I've tried to keep my posts financial-related. For the most part I live pretty frugally, but occasionally I do indulge to have a good time with friends or family. I haven't really blogged about that aspect, not sure people want to hear it... :P

techguy, ditto for me. Most of my transactions have been for funding private equity deals in real estate development.

Rags 2 Riches said...

fz, thanks so much for all that info on the Galapagos. You're awesome!

JT said...

Thank you for the reply rags. I'm with you on the payday thing; people that make minimum wage paying 8-10% to get their check cashed or whatever just doesn't sit right.

I'm also with you in that I tend to take the easy road. But I'm at a crossroads now in that even though I work 8-4 and make 6 figures I think I'm done with this line of work. My wife and I would also like a house and if we bought here in dc inside the beltway a decent 3 br 2 bath house would be about $600k. I just refuse to pay that much especially when property taxes would be $6000/yr. I'd be forced to stay in my job that paid 6 figures to pay the mortgage.

We'd like to move about an hour or two away to afford a house and I'd like a business that I didn't have to work 24/7 at but still make about $60k-$80k. So if you have any more ideas let me know.

Thanks for the detailed response.

James

Rags 2 Riches said...

jt,
I talked with a couple of people recently who are just starting their own businesses.

One guy is about to put an offer down on a vitamin shoppe. He said he decided on this line of business because he's looking at 50% profits.

A friend of mine has started a tour company. Last week she bought a tour bus and a couple of commercial vans. She's selling tours wholesale to travel agents. She just moved to LA in November. I was surprised because she is finance VP at a major Fortune 500 company. I thought she'd be busy/satisfied enough with her career, but even she is pursuing outside business. She came up with a business plan, lined up customers and contracts, and made the purchases all in the last 1-2 months - she had no prior relationships in LA! But one thing going for her, she is super-cute, no doubt that helps with sales.

She's offering to run businesses for me if I want to invest. Add this opportunity to the long list I wrote about months ago.

She's a numbers person, I'm sure she had a good reason for picking tour business.

You live in D.C., another major tourist town...

Britannia said...

Well written article.