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Biting Off Just Enough: Choosing Diversified Quality Over Quantity

For the last few years my bank has been after me to try one product or another: “You should open a savings account with us, it can serve as a back-up,”” You can earn rewards,”” You should get our credit card, you qualify for 0% over the next nine months,” I never know what it will be during my next visit or next phone call.

Bankers are not inherently evil, in fact I rather enjoy the people at my local branch and the telephone conversations are pleasant enough. I am sure that the customer representatives are “just doing their job,” as they deliver their various messages. Besides, if they say it often enough their message may reach that one person who could really use the extra funds. It is their job to get consumers the products they may need and to generate enough revenue in the process to make it worth their while.

We are out of the economic slump; however, it's still a slow and determined crawl back to GDP of 3.5%+. The banks have had to concede on many points, including increasing fees. It would seem that they understand that we are all in the same boat – without a penny to spare. Yet, if you are open to increased debt and financial vulnerability they are open to selling you your poison, legally.

As a consumer it is your job to be informed or to get informed and to know when to say no.

Too Soon
I still remember IndyMac Bank - talking to customers who swore that their teller told them how to structure their accounts, and yet they still lost significant sums of money. I still remember the long days and nights and weeks, without a break, filled with similar stories.

If we trusted God, there could be no fear. The Psychology of Finance

Because I remember the IndyMac Bank Failure I am choosing quality of organization, account type(s), and time allotted for transaction review. I am maintaining the theory of diversification, so I do not have all of my “eggs in one basket”; however, I do not open an account or incur increased debt based solely on the recommendation of a customer service representative.

I have chosen each organization and account type based upon my own personal assessment. I’ve read the documentation, including the fine print when necessary, to ensure that I understood the product, service, and account. If I had conversations, these conversations were with management, a director, or someone with decision making authority and the answers had to align with the documentation, and my expectation. I did my homework up front and beyond the front line personnel.

It is just too soon to forget about what got us into the financial crisis. High consumer debt, haphazard instruction, irrational entitlements (greed), unsystematic accountability,… It is just too soon to forget about what got us into the financial crisis.

The Payoff
Recently, someone made fraudulent charges to my account and I noticed it within the statement period. Because the regular “normal” charges to this account are similar in nature, the oddness of the fraudulent charge was a glaring red flag, (i.e. quality of account type and review of transactions). The organization was able to immediately ensure that the charge was removed from my account without hassle or argument, (i.e. quality of the organization). Finally, I maintain very few accounts, streamlined to meet my needs, so that a quick scan of my personal financial landscape can give me the information that I need to make an informed decision.

By maintaining a diversified small number of quality accounts I am able to actively monitor my accounts and successfully mitigate the risks. Although I remain outraged by random fraudulent acts, I am thankfully unharmed by them.