Don’t spend money on bottled water. Buy a large carton of water bottles and after you drink em: rinse, refill, refrigerate, and repeat!

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Hitchhiking is a bad idea. In no way do I advocate hitchhiking in this article. However, it is free, and for covetous misers such as myself, free is good. In fact, my entire time spent hiking and camping on Vancouver Island was free, except for an A&W Cholesterol-filled meal and a deliciously-illegal-in-the-states Cuban cigar with which I rewarded myself after a successful week in the rainforest. But on the hour-long thumb-journey from Sooke to Port Renfrew, I received not only a free ride, but more valuably, free financial advice.

She drove a Landcruiser and was around forty but looked young, and she was a successful realtor, her husband an equally accomplished artist. In exchange for picking me up, she gave me a stackful of house listings and told me to fold them. This would save her an hour, she said, and was a fair exchange for the ride.

She asked me what I do and when I told her about the site, she spurted off endless advice for smart young investors. She told me that she and her husband used the equity of her house to make real estate investments for her ten-year-old daughter. In this sense, the wealth stayed in the family and her daughter would be able to borrow against the property in ten years time, when its value will have skyrocketed.

Because the 2010 Winter Olympics are coming to Vancouver, there has been a surge in the real estate market there, unlike in the rest of the North America, which is slowly recovering and in my opinion, will start going back up shortly (downturns in the real estate market typically last a maximum of three years). The city of Vancouver has put a moratorium on development of any more condominiums, so the condo market on Vancouver Island has surged. The realtor’s daughter and her family are reaping the benefits.

While your parents buying a house for you at age ten is unrealistic for most people outside Vancouver Island, and for most people in general, this realtor gave me some more broadly-appealing financial advice on ways to use your credit to increase your finances. Your credit rating is important to banks. While it seems arbitrary and is arbitrary for the most part, banks must rely on that number in order to operate efficiently. The thing that destroys most people’s credit rating are student loans. Students assume that banks will be forgiving of indiscretions in paying off student loans. This is not true. While sane, caring individuals would give a student a second chance, students are of little value to banks. We’re poor, lazy, inexperienced, and have few marketable skills. So pay your student loans. It’s not a bluff!

However, if you’re one of the many people for whom this advice comes too late, the realtor suggested good ways to build new credit and to fix your credit rating if it is damaged. She suggested pre-paid credit cards at as young an age as allowed. There is no danger in these, and they do (somehow, I don’t know how, since they’re technically not credit) build your credit rating.

To fix your credit rating, first of all pay off all your debts. No one will listen to you until you do. Next, take advantage of a right that we all have without realizing it. We’re all allowed to petition creditors, and all have the right to attach a letter to our credit rating for banks to consider. If you failed to make a monthly payment on your credit card, you can write a letter saying you were young and ignorant and didn’t realize the value of paying bills on time. You could also contest the debt and even if it is unforgiven, demand that the letter be attached to your credit score. In this sense, you get the opportunity to argue for yourself and potentially counteract whatever the number on your rating says about you. Get a trusted financial person to cosign and vouch for you if possible. This could be someone at your local bank or a successful businessperson.

All Canadians hate the US a little bit (Don’t deny it.). The realtor told me that in the US banks, like police, are huge doushes. Even if you get a debt forgiven, it is still on your credit rating and banks will ask about it. If it were me, and I were meeting with a bank representative under such circumstances, I think I’d reply outraged that the debt was forgiven and therefore irrelevant and there’s nothing to talk about. But, in addition to being cheap and miserly, I’m also proud. The former qualities are good when dealing with banks, the latter is not. The realtor told me that a pride-filled approach usually does not work with banks, but that the potential loanee should present himself with humility, that it’s important to dress well, and that well-spoken applicants receive well-above what their credit-score says they should.

As far as I’m concerned, this is all good advice. What is better advice, however, is don’t ruin your credit score and don’t go into debt! And don’t hitchhike!

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A Guide to What Is and Is Not Protected by FDIC Insurance
So - you feel your cash is safe and protected when you walk through the door of the bank or saving association, much safer than when you kept it under your mattress. And you should. BUT, are your funds all covered by FDIC insurance just because you walked into a secure-looking building with iron bars and guards? Not necessarily - it depends on which of the bank’s products you decide to use and whether the bank is FDIC insured.

What Is Insured?
You are probably familiar with the traditional types of bank accounts - checking, savings, trust, certificates of deposit (CDs), and IRA retirement accounts - that are insured by the FDIC. Banks also may offer what is called a money market deposit account, which earns interest at a rate set by the bank and usually limits the customer to a certain number of transactions within a stated time period. All of these types of accounts generally are insured by the FDIC up to the legal limit of $100,000 and sometimes even more for special kinds of accounts or ownership categories. For more information on deposit insurance see FDIC brochure “Your Insured Deposits.”

What Is Not Insured?
Increasingly, institutions are also offering consumers a broad array of investment products that are not deposits, such as mutual funds, annuities, life insurance policies, stocks and bonds. Unlike the traditional checking or savings account, however, these non-deposit investment products are not insured by the FDIC.

Mutual Funds
Investors sometimes favor mutual funds over other investments, perhaps because they hold promise of a higher rate of return than say, CDs. And with a mutual fund, such as a stock fund, your risk - the risk of a company going bankrupt, resulting in the loss of investors’ funds - is more spread out because you own a piece of a lot of companies instead of a portion of a single enterprise. A mutual fund manager may invest the fund’s money in either a variety of industries or several companies in the same industry.

Or your funds may be invested in a money market mutual fund, which may invest in short-term CDs or securities such as Treasury bills and government or corporate bonds. Do not confuse a money market mutual fund with an FDIC-insured money market deposit account (described earlier), which earns interest in an amount determined by, and paid by, the financial institution where your funds are deposited.

You can - and should - obtain definitive information about any mutual fund before investing in it by reading a prospectus, which is available at the bank or brokerage where you plan to do business. The key point to remember when you contemplate purchasing mutual funds, stocks, bonds or other investment products, whether at a bank or elsewhere, is: Funds so invested are NOT deposits, and therefore are NOT insured by the FDIC - or any other agency of the federal government.

Securities you own, including mutual funds, that are held for your account by a broker, or a bank’s brokerage subsidiary are not insured against loss in value. The value of your investments can go up or down depending on the demand for them in the market. The Securities Investors Protection Corporation (SIPC), a non government entity, replaces missing stocks and other securities in customer accounts held by its members up to $500,000, including up to $100,000 in cash, if a member brokerage or bank brokerage subsidiary fails. For more information contact:

Securities Investor Protection Corporation
805 15th Street, NW Room 800
Washington, DC 20005
202-371-8500
www.SIPC.org

Treasury Securities
Treasury securities include Treasury bills (T-bills), notes and bonds. T-bills are commonly purchased through a financial institution.

Customers who purchase T-bills at banks that later fail become concerned because they think their actual Treasury securities were kept at the failed bank. In fact, in most cases banks purchase T-bills via book entry, meaning that there is an accounting entry maintained electronically on the records of the Treasury Department; no engraved certificates are issued. Treasury securities belong to the customer; the bank is merely acting as custodian.

Customers who hold Treasury securities purchased through a bank that later fails can request a document from the acquiring bank (or from the FDIC if there is no acquirer) showing proof of ownership and redeem the security at the nearest Federal Reserve Bank. Or, customers can wait for the security to reach its maturity date and receive a check from the acquiring institution, which may automatically become the new custodian of the failed bank’s T-bill customer list (or from the FDIC acting as receiver for the failed bank when there is no acquirer).

Even though Treasury securities are not covered by federal deposit insurance, payments of interest and principal (including redemption proceeds) on those securities that are deposited to an investor’s deposit account at an insured depository institution ARE covered by FDIC insurance up to the $100,000 limit. And even though there is no federal insurance on Treasury securities, they are backed by the full faith and credit of the United States Government - the strongest guarantee you can get.

Safe Deposit Boxes
The contents of a safe deposit box are not insured by the FDIC. (Make sure you read the contract you signed with the bank when you rented the safe deposit box in the event that some type of insurance is provided; some banks may make a very limited payment if the box or contents are damaged or destroyed, depending on the circumstances.) If you are concerned about the safety, or replacement, of items you have put in a safe deposit box, you may wish to consider purchasing fire and theft insurance. Separate insurance for these perils may be available; consult your insurance agent. Usually such insurance is part of a homeowner’s or tenant’s insurance policy for a residence and its contents. Again, consult your insurance agent for more information.

In the event of a bank failure, in most cases an acquiring institution would take over the failed bank’s offices, including locations with safe deposit boxes. If no acquirer can be found the FDIC would send boxholders instructions for removing the contents of their boxes.

Robberies and Other Thefts
Stolen funds may be covered by what’s called a banker’s blanket bond, which is a multi-purpose insurance policy a bank purchases to protect itself from fire, flood, earthquake, robbery, defalcation, embezzlement and other causes of disappearing funds. In any event, an occurrence such as a fire or bank robbery may result in a loss to the bank but should not result in a loss to the bank’s customers.

If a third party somehow gains access to your account and transacts business that you would not approve of, you must contact the bank and your local law enforcement authorities, who have jurisdiction over this type of wrongdoing.

FDIC-Insured

* Checking Accounts (including money market deposit accounts)

* Savings Accounts (including passbook accounts)

* Certificates of Deposit

* Retirement Accounts (consisting of cash on deposit at a bank or thrift)

Not FDIC-Insured

* Investments in mutual funds (stock, bond or money market mutual funds), whether purchased from a bank, brokerage or dealer

* Annuities (underwritten by insurance companies, but sold at some banks)

* Stocks, bonds, Treasury securities or other investment products, whether purchased through a bank or a broker/dealer

For More Information from the FDIC
Call toll-free at 1-877-ASK-FDIC (1-877-275-3342) from 8 a.m. until 8 p.m. Eastern Time, Monday through Friday.

For TDD call 1-800-925-4618.

Calculate your insurance coverage on-line using the FDIC’s Electronic Deposit Insurance Estimator at: www2.fdic.gov/edie

Request a copy of “Your Insured Deposits,” which provides a detailed discussion on all the ownership categories, or by calling toll free 1-877-275-3342.

Read more about FDIC insurance on-line at: www.fdic.gov/deposit

Send your questions by e-mail using the FDIC’s on-line Customer Assistance Form at: www2.fdic.gov/starsmail

Mail your question to:
FDIC Division of Supervision
and Consumer Protection
Attn: Deposit Insurance Outreach
550 17th Street, N.W.
Washington, DC 20429-9990

This brochure is intended to present information in a non-technical way and is not intended to be a legal interpretation of FDIC regulations and policies.

May be reprinted without restriction
2004

Federal Deposit Insurance Corporation
Washington, DC 20429

FDIC-005-2004

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The other day I was reading about Kim Linehan, who was the world’s top amateur female distance swimmer at age 18, back in the 1970’s.  She followed a rigorous training routine that included swimming 7-12 miles, every day, as well as other exercise and physical training. Someone asked her once which part of her training routine was the hardest.  She said, “Getting in the water!”

I had to laugh at that, because I knew exactly what she meant. Sometimes it seems like getting started is the hardest part.  With so many distractions available, it’s easy to put off difficult tasks forever¦ while reading Facebook, watching videos on YouTube, reading Slashdot or the news, or maybe just doing some good old-fashioned nothing. This is something that all of us smart younguns’ have to face down, whether we’re putting off studying for a difficult test, dealing with an unpleasant duty at work, or in my case, writing an article (maybe one about procrastination).

But embracing health, wealth, productivity and prosperity means ending procrastination, NOW. So here are some time-tested tips. And yes, these actually work.

1. Give yourself permission to not be perfect.

This sounds like a funny way to start.  To end procrastination, you need to start getting strict with yourself, right?

Wrong. In fact, many top procrastinators are actually perfectionists, too. Their worry about not doing a good job on the project at hand keeps them from getting started. They fear the task because of the opportunity it presents for failure.  To get started working, ease up on yourself and relieve some of that self-created pressure.  It’s okay if the first draft isn’t perfect. It’s not the end of the world if you don’t get an A on the test. Etc.

2. Break the project down into manageable pieces.

In a way, this is an extension of the first tip.  Don’t approach a job thinking, “I have to work on this for eight hours or else.” Anyone would dread a task like that!  Instead, think, “I can work on this for just one hour.  After one hour, I’ll have lots done, and I’ll take a break.”  By the time you’ve worked for an hour, you may be involved in the job and ready to keep working. Or you might be ready for that break. If so, than take it. It will be easier for you to come back to the work later.

Or, alternately, divide the job into pieces based on aspects of the project. Rather than saying, “I have to study for my psych test,” you could say, “I have to study Chapter 4.”  The first job sounds overwhelming and intimidating. The second one sounds relatively simple. The goal is to create an environment where the task sounds easy, not threatening, and you feel less resistance to getting started. Once you have gotten some work done, your momentum will carry you and it will be easier to continue working.

3.    Resist the urge to let your concentration drift.

Sometimes when you’ve been working for an hour or two, you start to lose focus and concentration. Without really thinking about it, you’ll open your browser, pick up a magazine, or turn on the TV. At first you think, “I’ll just take a two minute break,” but before you know it, you’ve wasted half an hour.

Keep this from happening, by recognizing when your attention is drifting, and having an approach in place to deal with it. Create a ritual that restores your focus. You can tilt your head back and count to a hundred. You can close your eyes and take some deep breaths. You can walk around the room three times. The important thing is that you take this action with the intent to stay focused and keep working. As you count or breathe or walk, you can contemplate the importance of your task and why you really want to stay productive. This is a much more effective way of taking “a two minute break”.  After you do this ritual several times, your body will begin to recognize it as an automatic “Get back to work!” signal.

Make these three tips into habits, and you’ll find yourself being more productive than ever. And that’s what every smart young investor wants, right?

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New York, New York - The Smart Young Investor, which had previously been a simple website listing great financial products, and was more well known for its newsletter, has undergone a drastic change in direction.

Under the new direction of CEO John Maynard Keynes, The Smart Young Investor aims to become the world’s leading source of financial news and personal money management advice. The new site aims to fill the huge gap created when the Wall Street Journal decided to focus entirely on the latest faux pas’ of Hollywood Celebrities.

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