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Randall Munroe at xkcd put together a chart about money, so massive that you’ll have to enlarge a few times just to read it. The statistics cover what things cost, what people earn, business profits, taxes, government spending, utilities, war, and more. The amounts of money for each are laid out in blocks for comparison. That’s a lot of blocks. What is shown here, as compressed as it is, is just a portion. Link -via Boing Boing
It seems an odd problem to have, this “too much cash” thing. I don’t know that most of us can relate. But it seems that in times of economic insecurity, those who used to invest in stocks are simply holding their money in banks, and now bankers are inundated with money. So what’s the solution? Charge people to deposit. Or, at least some of the people, at some banks anyway:
Though financial institutions are not yet turning away customers at the door, they are trying to discourage some depositors from parking that cash with them. With fewer attractive lending and investment options for that money, it is harder for the banks to turn it around for a healthy profit.
In August, Bank of New York Mellon warned that it would impose a 0.13 percentage point fee on the deposits of certain clients who were moving huge piles of cash in and out of their accounts.
Others are finding more subtle ways to stem the flow. Besides paying next to nothing on consumer checking accounts and certificates of deposit, some giants — like JPMorgan Chase, U.S. Bancorp and Wells Fargo — are passing along part of the cost of federal deposit insurance to some of their small-business customers.
Even some community banks, vaunted for their little-guy orientation, no longer seem to mind if you take your money somewhere else.
“We just don’t need it anymore,” said Don Sturm, the owner of American National Bank and Premier Bank, community lenders with 43 branches in Colorado and three other states. “If you had more money than you knew what to do with, would you want more?”
Well, Neatoramanauts? What say you? Does charging money to hold your money seem counter-intuitive, or is this a good tactic for discouraging large-sum depositors from parking away their millions in a vault?
Properly managing one’s finances seems like it should be a prerequisite for running a country. But these U.S. leaders could have used more dead presidents in their wallets.
HARRY TRUMAN -THE BUCK STOPPED THERE
Prior to becoming president, Harry Truman’s ventures in private business earned him more trouble than profit. He lost several thousand dollars investing in a fruitless zinc mine, and even more money funding a short-lived haberdashery in Kansas City. Eventually he began to view politics as a more stable career than business. Even as a senator, Truman was forced to borrow money and live more modestly, as he sent much of his income home to support his farm in Missouri.
Upon leaving the White House in 1953, Truman refused to exploit his former office as a stepping stone into the business world. This left him with just a small plot of land off which to live. He hoped that his memoirs would bring in extra cash, but between paying the ghostwriters and the taxes, Truman netted just $37,000 from the book. His insolvency grew so pathetic that President Eisenhower passed the Former Presidents Act in 1958, which created a pension for Truman. The former president made use of every last bit of it, leading an active life until his death at the age of 88.
THOMAS JEFFERSON -LIFE, LIBERTY, AND THE PURSUIT OF MONEYLENDERS
During the 1700s, tobacco rarely turned a consistent profit. So Thomas Jefferson, like many plantation owners of his time, lived in perpetual debt. Eager to look the part of a Virginia gentleman, Jefferson borrowed money for expensive clothes, furniture, and wine. He continued to indulge in this lifestyle through his presidency and into retirement. Jefferson’s beloved country estate of Monticello was especially draining on his finances. Its high ceilings and large windows led to excessive heating costs, and its flat roof and cavernous skylights leaked with every rainfall. by the time Jefferson was in his late seventies, the neglected bills had piled up and doubled with interest.
To lessen his financial woes, Jefferson started selling off the things he loved. He sold his entire collection of books to a Congressional library and even hatched a plot to give away a large parcel of land in a statewide lottery. When news of the lottery (and its purpose) reached his former colleagues, generous donations poured in. Despite these efforts, Jefferson died in debt. Two decades later, his grandson finally paid off the founding father’s tab.
ULYSSES S. GRANT -THE BOOK DEAL OF THE CENTURY
In 1881, former president Ulysses S. Grant settled into his retirement with what seemed like a prudent investment in his son’s Wall Street firm, Grant & Ward. But when the younger Grant’s partner, Ferdinand Ward, absconded to Canada with all the money, Grant found himself short $150,000.
Grant considered it a matter of personal honor to pay back the debt in full and rejected any financial assistance. He sold off much of his land, but it wasn’t enough to cover his losses. To generate more income, the former general wrote a series of articles about his Civil War exploits, which the ever-humble Grant doubted anyone would read. Surprisingly, the articles were a huge success, and Grant’s longtime friend Mark Twain convinced him to pen his personal memoirs. Completed just before his death in 1885, Grant’s autobiography became one of the best-selling books of its time -earning more than half a million dollars.
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The article above, written by Brian McMahon, is reprinted with permission from the Scatterbrained section of the May-June 2011 issue of mental_floss magazine. Get a subscription to mental_floss and never miss an issue!
Be sure to visit mental_floss‘ website and blog for more fun stuff!
U.S. income tax returns must be in the mail by Monday, but most people who did not have to pay more into the system have already filed. Many folks who expect refunds got the money faster by getting refund anticipation loans, or RALs. Mother Jones explains how refund anticipation loans work, by looking how John Hewitt, founder of Jackson-Hewitt, got into the loan business. The RAL was invented by Ross Longfield in 1987.
Ultimately, Longfield persuaded H&R Block to sign up. But no one was as smitten as John Hewitt—who understood that people earning $15,000 or $20,000 or $25,000 a year live in a perpetual state of financial turmoil. Hewitt began opening outposts in the inner cities, Rust Belt towns, depressed rural areas—anywhere the misery index was high. “That was the low-hanging fruit,” he says. “Going into lower-income areas and delivering refunds quicker was where the opportunity was.”
Customers wanting a RAL paid Jackson Hewitt a $24 application fee, a $25 processing fee, and a $2 electronic-filing fee, plus 4 percent of the loan amount. On a $2,000 refund, that meant $131 in charges—equivalent to an annual interest rate of about 170 percent—not to mention the few hundred bucks you might spend for tax preparation. “Essentially, they’re charging people triple-digit interest rates to borrow their own money,” says Chi Chi Wu, a staff attorney at the National Consumer Law Center.
A few hundred bucks for tax preparation? Really?
“These businesses are in this neighborhood for one reason: They see they can make a killing here,” says Ramon Dalmasi, an accountant with a front-row seat on the growth of the instant tax business. Dalmasi opened a bookkeeping business in the Bronx in 1997 and watched as chain after tax-prep chain popped up on commercial strips in his community. A few years ago, he relocated to Yonkers, an aging suburb just north of New York City, and found the same chains there as well. “They don’t see people struggling to put food on the table,” he says. “They just see people who can make them millions.” Even without a RAL, a working parent who qualifies for the EITC often pays $300 or more at a tax mill. Dalmasi, a CPA who teaches accounting at nearby Lehman College, charges that same client $75 or $100. “Why should I charge anything more than that,” he asks, “when it’s taking me 20 minutes?”
I have four different types of income from many small sources and a family of six, but my CPA only charges $100. The article points out how the poor are being taken advantage of, but as some have said elsewhere, this type of loan is still preferable to organized crime loans. Link -via Metafilter, where there’s a lively discussion on this article.
(Image credit: Joshua Lutz)
See also: Why Do People Fall For Payday Loans?
Children think that the president of the United States is a rich man by definition because he has an extremely prestigious and important job. Of course, “rich” is a relative term. The Atlantic looks at the wealth of all 43 men who have held the office, adjusted to the current value of the dollar.
We analyzed presidential finances based on historical sources. Most media evaluations of the net worth of presidents have come up with a very wide range, a spread in which the highest figure was often several times the lowest estimate. Most sources provided no hard figures at all. Most of these efforts have focused largely on the analysis of recent chief executives. That is because it is much easier to calculate figures in a world where assets and incomes are a matter of public record.
One of the most important conclusions of this analysis is that the presidency has little to do with wealth. Several brought huge net worths to the job. Many lost most of their fortunes after leaving office. Some never had any money at all.
There has been a rash of corporate scandals and greed over the past decade, but it is hardly new. Here are a few financial scandals that made news long before Enron and Worldcom.
Back in 1864, Credit Mobilier was a construction company started by executives of Union Pacific Railroad. They then had Union Pacific make contracts with Credit Mobilier to build railroads at inflated prices. These payments would in turn go to buy Union Pacific stock at par value and sell them at market value, generating huge profits to the tune of over $43 million.
From the Upcoming 
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Dark Roasted Blend takes a look at artful and unusual bank notes from around the world, past and present. You thought Zimbabwe’s inflation was outrageous when they issued the 100 billion dollar notes? Now they have 100 trillion dollar notes! That kind of hyperinflation is not new, as you’ll see in this post. Link
A Russian circus chimpanzee named Lusha picked stocks that tripled in value over a year’s time. Lusha was presented with cubes representing 30 different stock options and selected eight to invest money in by picking the cubes. Her chosen portfolio outperformed 94% of Russian investment funds!
‘She bought successfully and her portfolio grew almost three times. She did better than almost the whole of the rest of the market,’ said editor of Russian Finance magazine Oleg Anisimov.
He questioned why so-called financial whizz-kids are still receiving hefty perks for their expertise .
‘Everyone is shocked. What are they getting their bonuses for? Maybe it’s worth sending them all to the circus.’
Link -via Blame it on the Voices
Payday loans can have a annual interest rate of 400%, but people who take them don’t look it it that way when they borrow $100 and pay back $115 in two weeks. Many fall into the trap of taking a second, third, or more loans to cover the shortfalls caused by the previous loans. University of Chicago economists Marianne Bertrand and Adaire Morse ran an experiment in which they explained the terms of payday loans in detail, and gave statistics on how the average borrower must continue getting loans.
In a nationwide experiment, Bertrand and Morse found that providing a clear and tangible description of a loan’s cost reduced the number of applicants choosing to take payday loans by as much as 10 percent. Better information, it turns out, may dissuade borrowers vulnerable to the lure of quick cash while maintaining the option of immediate financing for those truly in need.
Among the other 90%, some won’t change their behavior no matter what, but many have no other credit options available. Link
The length of a man’s ring finger appears to predict his success at financial trading. As an indicator, finger length has as much impact as his years of experience. The length ratio of the ring finger to the middle finger is set before birth, and has to do with a fetus’ exposure to androgen, a male hormone.
In the new study, the researchers measured the right hands of 44 male stock traders who were engaged in a type of trade that involved rapid decision-making and quick physical reactions.
Over 20 months those with longer ring fingers compared to their index fingers made 11 times more money than those with the shortest ring fingers. Over the same time the most experienced traders made about 9 times more than the least experienced ones.
Looking only at experienced traders, the long-ring-finger folks earned 5 times more than those with short ring fingers.
While the finger ratio, showing fetal exposure to male hormones, appears to signal likely success in high-actively trading that calls for risk-taking and quick reactions, it may not indicate people who would do well at other sorts of financial activities, the researchers said.
So, guys, if a job interviewer looks at your fingers, they may be checking more than just how clean you keep them. Link -Thanks, Geekazoid!
(image credit: Flickr user dhammza)
