Friday, July 15, 2022

Short Takes: Savings Account Interest, Reverse Mortgages, and more

EQ Bank says they’re “excited to announce an increased interest rate!”  It’s now 1.65%.  Meanwhile, Saven is up to 2.85%.  Unfortunately, Saven is only available to Ontarians.  It’s normal for banks to offer different rates, but the gap down to EQ is disappointing.  Fortunately, the fix is easy; with just a few clicks, my cash savings are mostly in Saven.

Here are my posts for the past four weeks:

A Failure to Understand Rebalancing

Portfolio Projection Assumptions Use and Abuse

Here are some short takes and some weekend reading:

Jason Heath explains the advantages and disadvantages of reverse mortgages compared to other options.  He does a good job of covering the important issues, but doesn’t mention home maintenance.  With reverse mortgages, the homeowner is required to maintain the house to a set standard.  It’s normal for people’s standards for home maintenance to decline as they age, sometimes drastically when they don’t move well and can’t afford to pay someone else to do necessary work.  Reverse mortgage companies have no reason to go around forcing seniors out of poorly-maintained homes now, but once they have a lot of customers who owe more than their homes are worth after costs, their attitude is likely to change.

Robb Engen at Boomer and Echo
defends some aspects of mental accounting and sees problems with others.  Here is my thinking.  I see some forms of mental accounting as a rational response to the fact that the time and effort we put into making decisions has a cost. So, if we’re trying to be rational and account for all relevant costs when making decisions, we have to limit the time we spend making decisions. This necessarily means using easy rules of thumb (or mental accounting rules) that we only examine infrequently.  However, these rules of thumb do have to be examined occasionally to make sure they’re not wrong.

Big Cajun Man
says Nortel is still paying him tiny amounts he’s owed.  He also makes a good point about clutter costing money.

4 comments:

  1. I will learn more about clutter when I clear out another home next month. The business of clutter accumulation now has a tandem which is the removal, storage and/or disposal of clutter. I feel like the world will end up a giant junk pile, like in Wall-E.

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    1. I think about how to get rid of stuff in small amounts roughly weekly. That's the only way I can keep the clutter monster at bay.

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  2. Hi Michael. Can you please share the "few clicks" needed to send cash savings to Saven?

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    1. Saven is an online financial institution in Ontario. Ontarians can do an online search to get to their website to open an account, then link to their other bank accounts, and finally it just take a few clicks to move money from your other linked accounts to your Saven account.

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