Gene Hackman and Dustin Hoffman on Mental Accounting

Richard Thaler won the Nobel Prize for Economics this year for his pioneering work in Behavioral Economics. Of course, he promptly said he would spend the prize money “as irrationally as possible”. Here’s a light-hearted Q&A from the NY Times. Linked was a funny example of mental accounting, told by Gene Hackman about Dustin Hoffman. (Warning: There is a single f-bomb.)

Well, Hackman says when they were both young actors he was over at Dustin Hoffman’s house and Hoffman asks him for a loan.

Hackman goes into the kitchen and sees all these Mason jars with labels — “entertainment” and “books” and “rent” — and they all have money in them. Except for one, the one that says “food.” So he says to Hoffman: “You have plenty of money, why do you need money?” And Hoffman says, ‘There’s no money in the food jar. I can’t touch the other money. ”

They laugh, they go on, it’s funny but you know, it’s serious. Because we all do that.

If you can’t see the embedded video, here is the YouTube link.

CIT Bank Review: Savings 1.35% APY, No-Penalty CD 1.45%, Opening Process

citbank200CIT Bank (not be confused with Citi Bank) has become one of the larger online-only banks with a multi-year history of competitive rates. They don’t offer a checking account, so their products are mostly designed to be savings products with high interest rates. Here are their most-interesting products, in my opinion:

They also have traditional term CDs as well as fancy CDs that allow add-on deposits and rate-bumps. Unfortunately, none of those rates are high enough even with the fancy features.

Rates are as of 10/16/17. Compare with the Ally Bank 11-month No Penalty CD, which requires $25,000 to open to get the 1.50% APY rate. At balances under $5,000, the Ally rate is only 1.00%.

Opening process overview. I recently opened an account with them, and here’s my review of the opening process.

  • The application process was completely online. You provide the usual personal information.
  • You must submit to a credit check, but in my experience it was a “soft” pull which did not harm my credit. None of my various credit monitoring services showed it was a hard pull.
  • You may fund via (1) electronic ACH transfer, (2) wire transfer, (3) mobile check deposit via CIT Bank mobile app (iOS and Android), and (4) mailing in a paper check. There was no option for credit card funding. I picked online ACH funding and you need to provide routing and account numbers, followed by manual verification via micro-deposits after a day or two. There was no instant linking option via login information.

After deposit verification, then your funding will go through.

You have successfully verified your external account. Please allow up to 5 business days for your funds to appear in your CIT Bank account.
No further action is required for this account. Thank you!

User interface. While the front-facing website is pretty slick, after you login the backend is run by Fidelity National Information Services (subdomain ibanking-services.com). This is a popular backend software system used by many smaller banks who don’t want to create their own software from scratch. It’s functional, but not very pretty. At least it’s familiar to someone like me who has too many bank accounts. Two-factor authentication is available using voice or SMS.

Savings I Bonds November 2017 Update: 2.48% Variable Interest Rate

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Savings I Bonds are a unique, low-risk investment backed by the US Treasury that pay out a variable interest rate linked to inflation. You could own them as a replacement for cash reserves (they are liquid after 12 months) or bonds in your … [Read the rest]

Amazon Prime: Buying Add-On Items Without Minimums w/ Alexa

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On of the main benefits of Amazon Prime is that you can buy things whenever you want with no minimum purchase requirement, shipped to you for free. Mostly. Amazon classifies some of their lower-priced products as "Add-On" items, which must be … [Read the rest]

MoviesAnywhere: 5 Free Digital Movies After Linking Accounts

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MoviesAnywhere is a service that links up movies that you bought online at one retailer and lets you view them on another retailer. For example, you might buy a movie from iTunes and watch it from Amazon Video. This "digital movie locker" service … [Read the rest]

Amazon Cash: Add $25, Get $5 Bonus Credit

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Updated. Amazon is running a new promotion that gives you $5 Amazon bonus credit if you add $25 via Amazon Cash. Amazon ran a similar promo earlier this year that expired, so note that this one is only valid if you haven't used Amazon Cash … [Read the rest]

RealtyShares Update: My First Loan Default and Foreclosure Recovery (Ongoing)

Here's an update on my debt investment at RealtyShares. The borrower stopped paying for unclear reasons, and as a result this is my first investment to go into foreclosure proceedings. I am still hopeful for a full recovery of my principal and … [Read the rest]

20% off at Amazon with 1 American Express Membership Rewards Point (Targeted)

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Amazon has a targeted promotion offering a 20% off your Amazon purchase (max discount $50). This may be targeted to people with an eligible American Express card with Membership Rewards points linked in their Amazon.com account. If you have one … [Read the rest]

Amazon Music Unlimited: 4-Month Free Trial with Eligible Citi Credit Card

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Update: The previous $10 credit sold out quickly, but Amazon has brought back this promo with a $5 credit. Still better than nothing if you missed it initially. :) Here's a quick and easy offer for new subscribers to Amazon Music Limited. Even … [Read the rest]

Barking Up The Wrong Tree: The Benefits of Being Mostly Optimistic

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Eric Barker writes at Bakadesuyo.com and his talent/skill is synthesizing hundreds of different sources of academic research and historical anecdotes into actionable ways to improve your life. That's kind of a crowded field these days, but I … [Read the rest]

S&P 500 Total Return: Still Doubled From October 2007 to 2017

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In early October 2007, the S&P 500 index hit just over 1,500 - an all-time high. You might have been concerned, or you might not have even noticed. Less than 2 years later, the financial crisis occurred and the S&P 500 dropped 50% down to 750 … [Read the rest]

Kelly Criterion and Your Fun Money Allocation

Do you think you're a below-average driver? I didn't think so. In the same vein, Jason Zweig had a funny tweet the other day that hit home: Admit it: You do it, too.https://t.co/DaI0DON3XK pic.twitter.com/S9F3ILMiNz— Jason Zweig … [Read the rest]