Money Blue Book

I consider myself one of many rate chasers out there - savvy savers who hunt for the best annual percentage yield (APY) interest rates at banks and credit unions, and who are keen on quickly moving large sums of money from one account to another in pursuit of that financial ideal. High yield interest rate chasers seek out the highest available interest rate offerings possible, whether available at popular brick and mortar branches or whether available only through obscure online banks. We keep tabs on them all regularly and shift our bank balances around in pursuit of that elusive, but perfect high yield savings account. Rather than be content with letting our savings accounts sit idle, earning stable, yet passive interest growth, rate chasers such as myself prefer to actively manage our bank accounts to maximize interest earnings. Interest rates periodically change, thus so should we. Currently, I use my compiled list of the Best High Yield Savings Accounts to actively keep tabs on bank rate updates and changes.

High Yield Savings Accounts Offer Not Only Liquidity, But Rock Solid Financial Security and Reliable Growth As Well

While I have a diversified investment portfolio made up of high performing stocks, bonds, exchange traded funds, and mutual funds, I still try to put a sizable amount of what I own in cash form, invested in stable interest bearing savings accounts. The type of money I put in a savings account is money I can’t afford to risk or jeopardize, and the type of funds that I may need to call upon to weather difficult financial times or unexpected financial emergencies. While I personally use credit cards for emergency fund purposes at least in the short term, stable savings account funds make up the bulk of my long term emergency money strategy. I try to keep at least 6 months worth of liquid assets on hand at all times - money that can be quickly converted into usable cash to pay current bills and liabilities on a moment’s notice. You never know what type of sudden unemployment, cash flow, car trouble, or health problems might befall you that might necessitate the need to call upon such an emergency influx of readily available funds. I choose to invest my emergency fund money into savings and money market accounts because they not only provide a modest degree of interest growth that usually outpaces or at least keeps up with inflation, the invested funds are liquid and extremely well protected from loss. I plan to work certificate of deposits (CD’s) into my emergency fund planning approach in the future, but wish to save up more in my savings before dabbling with higher yielding, but less liquid assets like CD’s.

Some people call rate chasers - day traders of the banking world, but I think that’s a terrible analogy. Unlike day traders who trade on short term, violent swings in the stock market, we do not take actions that could even remotely be construed as gambling or high risk stakes. Interest rate chasers tend to be risk adverse, and are almost always play-it-safe type investors and emergency fund builders who seek safety and pursue predictable rates of return, rather than high flying, speculative investments.

Besides, bank accounts, whether checking, savings, or money market accounts are one of the most stable, reliable, and dependent sources of asset preservation. While most traditional banking institutions do not provide investment assets that will make one rich as their rates of return are generally lower than that offered by other investment options such as stocks, bonds, options, or foreign currency exchange, they do provide a very stable and predictable rate of return. Insured by the Federal Deposit Insurance Corporation (FDIC), the potential risk of loss of assets stored in a banking account is virtually nil. The FDIC, an independent agency of the United States government utilizes the full faith and credit of the federal government to protect the assets of all insured banks. Most major savings and banking associations are FDIC insured, and as such most traditional accounts offered by the insured bank, including checking, savings, money market accounts, CD’s, and even IRA retirement accounts are protected from loss. Even if the bank fails, goes bankrupt, goes out of business, gets robbed, burns down, or succumbs to some market catastrophe like the mortgage meltdown or credit crisis, the money stored in a FDIC insured high yield savings account remains 100% safe, up to the coverage amount. For savings accounts, the legal coverage limit is $100,000. If you own substantial assets that exceed this basic coverage limit and want to be 100% safe, you may want to consider spreading your assets among difference asset categories or banks.

Register With The Top High Yield Savings Accounts And Manage Your Fund Transfers As Interest Rates Periodically Fluctuate

There are certain basic steps savvy rate chasers and high yield online bank arbitrage seekers (as I like to them sometimes) take to properly manage their pursuit of high interest savings rates:

1) Open High Yield Accounts With Online Banks That Consistently Offer the Highest APY Interest Rates For Savings Accounts

I currently own several savings and money market accounts with the top online banks that have consistently offered the best APY interest rates. Personally, I avoid savings accounts from major brick and mortar retail banks like Wachovia, Wells Fargo, Bank of America, or even Citibank, since most rarely offer attractive interest rates as they don’t need to offer them to attract customers. Most of these big retail banks rely on convenience and physical location presence to attract clientele. On the other hand, online banking sites, blessed with lower operational and maintenance costs, are highly motivated and more willing to offer competitive interest rates for account holders.

Most of my recently opened high yield savings accounts are with generally well known online banking institution favorites like HSBC Direct, Countrywide’s Savings, Washington Mutual, WT Direct, E-trade Savings Bank, and Capital One Direct Savings. Oldies but goodies like ING Direct Savings (get an ING Direct Sign Up Bonus), and Emigrant Direct still remain alive and well as members of my complete savings account tracking roster. While the actual order in the interest rate sliding scale changes periodically, the mentioned banks tend to offer consistently high rates. After opening accounts, it’s simply a matter of tracking APY changes and shifting funds around accordingly.

It’s important as a rate chaser to have target bank accounts ready for quick transfers as interest rates change. Back in the old caveman days before the advent of the Internet, opening new savings accounts was cumbersome and limited to local brick and mortar branches, and phone banking was a pain. With the emergence of the Internet and the development of fully functional online banking websites, online funds can now be shifted around instantly with a few strategic key strokes. To manage your online accounts and prep them for transfers, all you have to do is register for online account access and set up linked ACH electronic access. To set up ACH transfer permissions, you’ll be required to submit information about the bank account that you want to link up - including the bank account number and the banking institution’s ABA routing number (you can ask your bank for this information). Frequently the online system will initiate two small denominational test deposits into your linked bank account, the amounts which you’ll have to verify to confirm that you are the actual owner.

2) Be Watchful Of New Bank Account Credit Report Check Penalties, and Electronic Bank Transfer Limits

If you’re like me, you try to maximize your money whenever possible. In my case, so long as the resulting effects don’t put myself in a potentially worse off financial position and the necessary actions to get me there aren’t too prohibitive, I try to go for the gold whenever possible. For those looking to open multiple bank accounts, one thing to keep in mind is the health of your credit score. When a new savings or money market account is opened, some banks initiate a hard credit check. The resulting hard credit pull, as it is sometimes called, may result in a small credit score hit in the nature of a request by one seeking credit. Not all banks initiate a hard credit pull that will ding your precious FICO score for new savings account applications, but some do. Examples of online bank account applications that result in harmless soft credit pulls include - Capital One Direct Savings, Countrywide, Emigrant Direct, E-Trade Savings, FNBO, HSBC Savings, ING Direct savings, and Washington Mutual.

Another thing rate chasers have to watch out for as well is the federal savings account limit of 6 ACH transfers a month. However, unless you are shifting your savings around every few days, the 6 ACH transfer limit per account should not be too much of a limitation or restrictive hassle. Be mindful that the transfer limitation also applies to money market deposit accounts as well. For most comparative factors, savings and money market accounts have little differences except money markets usually provide slightly higher interest rates and sometimes offer check writing privileges. However, money markets usually have higher tiered minimum balance requirements, although that is not always the case.

3) Manage Your Portfolio Of Multiple Savings Accounts By Using An Account Aggregation Service

To keep an eagle eye on your bank balances and army of savings accounts, I recommend using an account aggregation service like Yodlee, or Mint. Yodlee in particular offers its banking account consolidation service through other financial providers as well, such as Bank of America. In my case, I utilize Yodlee through Fidelity’s Full View access, which allows me to link up all of my high yield savings accounts and money markets to Fidelity Investments, storing my account passwords securely so that I can easily view my regularly updated account balances from one location. To make actual transfers however, you’ll have to log into the desired bank account directly.

4) Periodically and Regularly Shift Your Bank Balances Around As Major Interest Rate Changes Are Issued By the Federal Reserve

One thing to note is that I’m not a rabid or fanatic rate chaser. While some hardcore rate chasers shift their money around as soon as interest rate offerings change the slightest, I prefer to my make shift once or twice a month at the very most - call me a mild rate chaser if you wish. Usually I only shift my balances around in pursuit of higher APY rates every two or three months on average. Thus I don’t go hog wild over every slightest budge in APY, although there are lots of super online rate chasers who do though. Just look at those crazies who post on Fatwallet forums - they go nuts over a single .01% change.

Frequently, I fashion my fund transfers from one savings account to another around major interest rate moves by the Federal Reserve when I know major changes are coming my way. Upcoming federal reserve meeting dates on the calendar greatly interest me because decisions by the Federal Reserve frequently have a correlative effect across the board on the interest rate offerings by major banks. Rate cuts by the Fed usually signal subsequent APY interest rate drops by banks in a matter of days. Similarly, raises in the Fed Funds rate usually signal potential banking interest rate increases. Thus I usually try to make my electronic fund transfers as major rate changes are made across the board in response to Fed interest rate moves. Usually there is a lag time of about 1-2 weeks before banks at large fully and collectively respond to Fed announcements. Keep that in mind as well, lest you shift or chase that higher APY interest offering prematurely.

For those of you who are fortunate to have a stable job and blessed with being gainfully employed, congratulations and more power to you. For those of you who are currently unemployed or out of a job, I feel your frustration. I’ve been there before and know how scary and uncertain the experience can be.

In this fluctuating and unpredictable economy, you never quite know what is lurking around the corner. Life comes at us fast and sometimes job stability, occupational predictability, and all positive aspects of full time employment can disappear in a flash. Sometimes it can be due to our own fallibility and less than perfect work performance, and sometimes it can be due to slowdowns in the economy at large. Life is unpredictable and it’s hard to be certain whether there is such a field that’s a sure thing anymore. During the past few years, jobs and careers related to the real estate and housing market were hot and in great demand. However, years later, with the collapse of the housing bubble, many of the jobs previously fueled by the burgeoning real estate market have mostly disappeared. Even upper echelon MBA-type financial positions at top firms like Merrill Lynch have been down sized and trimmed back, resulting in many educated employees suddenly out of work.

If you find yourself one of many who have been laid off, I feel for you. I’ve been through a sudden job lay off before and it’s not an easy feeling or experience to go through. Not only does it put you in a sudden cash flow crunch, but it forces you to scramble around in desperation to find employment quickly. For those who have a wife, husband, or children depending on that income, the extra financial and familial pressures make the process even more urgent. However, it doesn’t have to be the end of the world. There are systems and governmental assistance programs in place to help guide and cushion you during those periodic times of unemployment - namely in the form of unemployment insurance benefits. Don’t let those invaluable financial benefits and entitlements pass you by during times of need - seize them immediately.

Do Not Let Petty Shame Or Guilt Prevent You From Filing For Unemployment Insurance Benefits - It’s Your Money and You Are Entitled To It

I’ve filed for unemployment benefits several times throughout my working career thus far. I will admit, the first time I filed, I felt a tinge of shame and guilt. I felt like it was a hit on my aura of financial independence and a stain on my own sense of masculine pride. As someone who was raised to believe that an important aspect of a man’s duty and responsibility was to provide for himself and his family, it was difficult for me to depend on governmental handouts for the first time. To me, receiving unemployment benefits meant I was now on welfare, and no better than some unmotivated or lazy 40 year old bum who lived in his parent’s basement like some financial leach on society.

However, now that I’ve had experience with being the recipient of unemployment benefits, I now understand what it truly is. To receive unemployment insurance benefits is by no means the same as receiving public welfare. It’s a genuine financial safety net that is subsidized by employers in a socialized manner to help decent working people get back on their feet quickly with as little financial destruction or burden as possible. While unemployment benefits provide free money for times when you’re not working, a fundamental and required tenant is that the recipient actively pursue employment leads while drawing on the temporary financial perks. Being a recipient has no effect on your existing credit score and the mere act of filing has no effect on your future employment prospects. The small amount of compensation provided isn’t sufficient to save or grow rich on, but is just enough to give one a semblance of financial continuity and feeling of self reliance until the person can get back on his or her feet. It helps those who want to help themselves.

Who Pays For The Funds Dispersed For Unemployment Benefits?

Unemployment benefits are provided by a special jointly run fund provided by federal and state payroll taxes called the Unemployment Insurance program. No part of an employee’s actual paycheck goes directly into this unemployment fund (unlike social security) but is instead indirectly funded by employers through a special unemployment insurance tax that they pay. Almost all employers are required to pay unemployment insurance tax to help fund this public service. Unlike worker’s compensation, the employer does not pay unemployment benefits to laid off employees directly, but payments are instead issued by the responsible state agency as needed. Even if an employer goes out of business, unemployment benefits can still be distributed out to the company’s now unemployed workers because funds are socially subsidized by other active employers who pay into this pool of shared funds. When you are out of work for whatever reason, it’s in your own interest to file for unemployment benefits as soon as possible. Even if you refuse to file for it, you should know that you are still indirectly paying for this socialized governmental service.

Remember, there is no shame in taking on this temporary financial safety net as a short term stop gap measure - it was designed for you when you need it the most. The money is rightfully yours because your employer pays into the fund on a mandatory basis. Without its existence, you theoretically would have been given higher pay. If because of pride, you refuse to take this temporary governmental handout, ask yourself this question - will pride put food on the table for your family in the meantime until you can find your next job? Will pride pay for necessary groceries or pay for a roof over your held until you can secure that next job interview? Think about it. Desperate times require desperate measures. I personally view unemployment benefits as part of my emergency fund measures.

As Soon As You Become Unemployed, File For Unemployment Benefits Immediately

The most important thing to know about seeking unemployment benefit compensation is to file as soon as you become either partially or fully unemployed. Even if you suspect you will be able to file a new job relatively soon, it’s still in your best interest to still file for it sooner than later. There is almost always a 1-2 week lag time between filing and when you receive benefits. Frequently, there is also a mandatory one week waiting period during which the first week will not be compensated for. The benefit clock starts when you file so if you wait around to see if a new job is forthcoming, you may miss out on much deserved unemployment entitlements. If you wait several months after becoming unemployed to file, you won’t be able to claim for the non-working months that have already passed. You can only claim for the time that comes after the moment you file, so don’t delay - get credit for every single moment you remain unemployed.

Even if you are confident that you have sufficient pre-existing emergency funds to live off of, it’s better to file and not risk the chance that your emergency funds ultimately run out. You don’t want to look back later down the road only after draining your bank account completely and racking up unpaid credit card bills, and realized that you ought to have filed for unemployment benefits earlier.

Where Do You File For Unemployment Benefits?

Unemployment benefit applications should be filed in the state where the work was performed. Check out this official U.S. Department of Labor List Of State Unemployment Agencies to determine the correct filing location. Most states today allow unemployment benefit applications to be filed via telephone, in person, or through the Internet. If you want to avoid the stigma or emotional embarrassment of filing for this entitlement in person, filing via phone or through the Internet is a great way to circumvent this problem. Not only that, those methods are also quicker ways get your money more expeditiously.

As mentioned, unemployment filings are made with the state unemployment agency in the state jurisdiction where the work was performed. If you lived in New York and worked in New York, you need to file your claim with the state of New York. What about those who lived in one state, but worked in another? In my case when I filed way back when, I lived in the state of Maryland, but worked in Washington D.C. Since I performed my employment in D.C., my place of unemployment benefit filing would be in D.C. since that’s where my employers actively paid their unemployment taxes to. I could still file with the state of Maryland, but would ultimately be referred by the unemployment hotline and managing system to seek benefits from Washington D.C.

Who Is Entitled To File For Unemployment Benefits and How Much Money Can You Expect?

Generally (individual state laws vary), to qualify for unemployment benefits, an applicant must (1) meet state eligibility requirements regarding how long the employee has previously been working and how much money the employee has earned, (2) make continuing and regular application updates to the managing state agency, (3) be continuously available for work and actively seeking work, and (4) not be subject to any disqualifying employment factor.

To be entitled for unemployment benefits, employees must have become unemployed through no fault of their own (although definitions on fault vary by state). Generally those who voluntarily quit their jobs or were discharged from their positions due to willful misconduct can’t qualify. However, if you were laid off due to downsizing or were discharged due to simple lack of work, you will probably be entitled to benefits. Once approved, to continue to draw on your weekly unemployment checks or direct deposits, you will required to submit weekly updates of your employment and income status either by phone or over the Internet. During that time, you are expected to actively look for work. Obviously the benefits will stop as soon as you become gainfully employed again. While it’s somewhat unlikely the state agency will know if you go on vacation during that period of time instead of looking for work, you should also know that by doing so, you are committing fraud and may be required to pay the benefits back along with penalty fees if discovered. I know some people who did decide to take a brief vacation while still drawing on unemployment benefits, managing to stay under the radar, but not everyone will be that fortunate. Big brother government has sneaky ways to track you down.

To file for unemployment benefits with your state agency, you will need to provide your name, mailing address, phone number, social security number, working phone number, and may sometimes be asked to provide recent pay stubs. However, with computerized filings, oftentimes you will only need to provide your former employer’s name and address, without having to provide wage or salary paperwork. Your most recent employer will be automatically contacted by the state unemployment agency to verify the circumstances and reasons of your work discharge or layoff. Their response will help determine whether you exhibit any of the disqualifying factors to receiving unemployment benefits such as you quitting on your own, or getting fired because you were stealing from them.

The amount of your weekly unemployment benefit checks will vary depending on your past income and the maximum limits of your filing jurisdiction. For those who are higher income earners, your weekly checks will be worth more. The maximum payout amount also differs from state to state. Just to give you a very rough ballpark figure of how much you can expect, the maximum payout for the District of Columbia is currently $359 a week, before tax. At about $1,436 a month, this definitely goes a long way to help pay for basic living expenses like rent until you can get back on your employment feet.

Usually there is a total amount of benefits that each specific applicant can draw upon before the entire fund for that benefit year is tapped out. But until that happens, applicants can usually receive benefits for 6 months straight (26 weeks) before depleting their entire emergency unemployment benefit reserves. Keep in mind as well, all unemployment payouts are considered taxable income. There is usually no tax withholding associated with unemployment benefits so you may be required to pay estimated taxes to meet your tax obligations.

Oh great - well I hope this article doesn’t foretell or signify a trend that’s going to be widely picked up by the gas industry in the coming future. While they’ve been one of the most credit card friendly industries in the past, some gas station chains are apparently starting to scale back their payment options in favor of cash due to diminishing profit margins caused by higher gas prices and rising credit card interchange fees. The credit card interchange fee, a percentage of the total sales price paid to credit card companies by the merchant on every transaction, is usually fixed at somewhere just under 2% - but the dollar amount of the fee rises with the price of the goods or services. As gas prices have risen dramatically, so have the credit card acceptance fees that gas pump merchants pay, drastically cutting into their profitability.

I Always Use My Credit Card To Pay For Gas And Don’t Intend To Change This Payment Practice Anytime Soon

While I understand why some gas station owners and advocates are pushing for the move back to cash payment only for gas purchases, I hope this is not an emerging or widely adopted trend. Paying cash at the pump may work for some, but it’s not going to fly for me.

I take frequent road trips and one of the most appreciated benefits of fueling at the gas pump is the ability to easily slide into a gas station off the freeway, punch in my prepayment, fuel up, and get out quickly. With a gas credit card, I can do that easily. With just a quick swipe and the press of a few buttons on the automated gas pump, my car is instantly refueled without hassle. With cash payment, not only is the practice comparatively more time consuming, but it’s a major inconvenience for those of us who have grown dependent on using our credit cards to pay for everything. I rarely carry more than $50 worth of emergency cash in my wallet and dislike the annoyance of walking around with dollar bills and loose coins jiggling around in my pockets. My efficient credit card usage habit also stems from my view that handling paper money is inherently dirty and unsanitary. I’m by no means a germa-phobe, but I feel that money is one of those heavily transacted items that you never truly know where it’s been before. For all I know, the bills were last taken out and manhandled by some hairy, sweaty dude while he was sitting in a bathroom stall doing his business somewhere. Hey, you never know. With my personal credit cards, at least I know where they’ve been and while I’ve never actually cleaned them before, they are at least washable.

I don’t know what I would do if gas stations suddenly and uniformly stopped accepting credit card payments due to their displeasure at having to pay spiraling credit card interchange fees. While I sort of vaguely sympathize with their declining profit margin plight (not really), as an oil consumer, I’m bound to take my gas business elsewhere to a place that does accept credit cards. The convenience of using my trusty gas rebate credit card to pay for gas and earn cash back rewards at the same time is not something I’m willing to give up anytime soon. I’ve been known to stop at a low priced gas station only to drive off immediately after finding out the place only accepted cash payment.

In the Washington D.C. region, there is a chain of el-cheapo gas stations called Free State that is known for offering greatly discounted gas at prices that’s frequently much lower than that offered by more recognized competitors. However, the biggest downside is that they only accept cash payment. Obviously this is to keep prices low and avoid having to pay merchant fees to credit card companies for each credit card transaction. But for heavy credit card users like myself, this is a complete deal breaker. While I see them everywhere along my driving route, I always avoid Free State gas stations because of their cash only payment policy. I would rather drive across the street to a slightly more expensive gas pump than deal with the inconvenience and hassle of paying by cash. It’s just one of those expected perks in life that I’ve come to insist on and demand. Other local gas station chains sometimes offer discounts for cash payments, but I would still rather pay the slightly higher fuel rate just to have the benefit of paying by plastic. Besides, any potential cash payment discount offered by the pump owner will be unlikely to offset the nice gas credit card rewards that I earn using my usual method of payment. I don’t expect or intend to give that perk up anytime soon as long as they are around.

I Have Also Come To Rely On The Budget Tracking Benefits That Credit Card Usage Affords Me

It’s not just the convenience and speed at which credit card payment at the gas pump affords me, it’s also the record keeping benefits as well. I pay by credit card at gas stations, restaurants, and everywhere else because it affords me convenient and reliable expense tracking. Payment by cash requires me to retain all of my paper receipts to keep track of total monthly spending. Credit card payments on the other hand allow me to permanently record and retain transaction dates and pricing information on my credit card statement to access at a later time of my choosing. I can easily log onto my online account from home to review the frequency of gasoline fill ups and the amount of money spent per visit with a just few key strokes.

Change Might Be A Good Catch Phrase For Politics, But It’s Bad When It Comes To How I Pay For Gas

Knowing the pervasive and established nature of credit card payment at the pump, I think most major gas stations like Exxon Mobil, Shell, BP, and Sunoco are unlikely to go cash only no matter how high gas prices may go, and no matter how badly their financial bottom lines will be hurt by having to pay higher transaction fees. Such brand name gas stations are likely to find other ways to cut costs than deprive consumers of this important convenience. Besides, switching to cash only would probably hurt their revenue stream more detrimentally than any potential cost saving benefits from going all cash due to loss of business volume. They’d lose the patronage of gas guzzling, dinosaur liquid loving, weekend road warriors like myself.

When you think of Ed McMahon, you don’t exactly associate or lump him with big time wasteful spenders like MC Hammer and some of the other well known celebrities of the past who rose to fame and fortune quickly but ultimately frittered away their money into bankruptcy on trivial pursuits. No, when you think of Ed McMahon, you think of the aging but charismatic late night show announcer, the TV personality, and the face and voice of the American Family Publishing sweepstakes team (not to be confused with the more popular Publisher’s Clearing House sweepstakes) that arrives unannounced at the homes of winners to present them their grand prize. You certainly don’t see or hear about him throwing his money away on fast cars, fast women, or holding lavish sleaze parties to great excess.

So I was quite surprised when I learned that someone like the now 80 plus year old Ed McMahon has now found himself in difficult financial straits and faced with the prospect of mortgage foreclosure on his multi million dollar home. This housing bubble and credit crisis seems to be quite merciless and universally brutal, even to those who simply lived their lives with the best intentions, but still succumbed to hard times. With little regard to feelings or reason, the mortgage credit crisis and the powerful forces of housing supply and demand have devastated many good families.

Ed McMahon and His Wife Pam Speak Out About Home Foreclosure and The Possibility Of Losing Their House

Ed McMahon recently appeared on the CNN Larry King Live show (CNN video clip) with his wife to discuss their difficult foreclosure nightmare and explain how a former multi-millionaire such as himself could fall from financial grace after all these years and have his house foreclosed on. During the conversational interview with Larry King, many of Ed’s words about how it all happened rang true:

“If you spend more money than you make, you know what happens. A couple of divorces flown in - a few things happened. You want everything to be perfect, but that combination - the economy, a little injury, breaking my neck - you just can’t work with this thing around your neck.”

“In some sense, I want to speak for the million people who now have foreclosure signs on their houses. I just want to give them hope, give them optimism and some guidance. Get the best corrective people you need around you, keep working at it, don’t stop. There’s a lot of people who are hard workers, did everything right, didn’t do anything wrong, and all of a sudden they are in this boat, and I speak for all of them as far as I’m concerned.”

“For everyone out there who’s going through this, we really sympathize with you. Be optimistic. It can be done. All kinds of things can happen. Let it work out great for you.”

When asked by Larry King to comment on the public assumption that the McMahons are multi millionaires and asked how they could have fallen behind $644,000 on their house mortgage payments, McMahon’s current wife Pam chimed in (tearfully at times):

“People do assume that you have hundreds of millions of dollars, and I think over the years it’s a combination of Ed working so hard and not looking at proper management which happens a lot. Because you’re a celebrity, people think you have a lot more than you have. And you always want to take great care of all your friends and family in all you do. We didn’t keep our eye on the ball and we made mistakes.”

“But you have to not give up. Whether we keep our house or we don’t keep our house. The whole financial issue might be the thing that ruins marriages, ruins relationships - but our marriage is strong.”

“You have got to realize that you can get through it. You never know what good things can happen for you tomorrow. Keep the faith.”

My Thoughts On Upper Class Celebrities, Ordinary Middle-Class Americans, and How To Protect Oneself From The Realities Of The Recessive Economy and Housing Market

After listening to the interview, I have to say I really started to sympathize with the plight of those in foreclosure. I know Ed McMahon and his wife Pam aren’t exactly representative of the classic foreclosure case, but at least they can relate to the pains of someone who can no longer afford his or her home mortgage loan payment and compelled to face the reality of home foreclosure. It’s an embarrassing and even humiliating experience that no one wants to be forced into. Home ownership is the American dream and when you can’t afford your pride and joy any longer, it’s a tough pill to take.

As I am currently still a happy renter and have not yet become a home owner, it is in my own personal and financial interest to see that there is no housing bailout whatsoever instituted by the government. This would obviously be the most self centered and self motivated route to take as opposition to any housing foreclosure bailout or assistance would help to ensure a growth in the glut and oversupply of available homes on the market, thereby substantially driving down real estate prices for the next 2-3 years until I decide to finally enter the housing market as a buyer.

But I do sympathize with most of the owners of the more than 1 million American homes (CNN news article) that are now shockingly finding themselves in foreclosure jeopardy. Sometimes in life, you do everything right with good intentions and yet bad things still happen when you least expect it. In Ed McMahon’s case, he may have lived an early life of entertainment and celebrity success and held to great esteem in his work, earning millions of dollars through the process, but apparently he failed to adequately plan for the future and prepare himself for inevitable financial emergencies.

The reality of home ownership life is that even those with good Fico credit scores who are able to qualify for and obtain prime fixed rate loans on their houses, bad things still may happen. Sometimes through no intentional fault of their own, people lose jobs, divorces happen, child custody battles rage on, or injuries and illnesses come up making one unable to afford one’s house anymore. With a stagnating economy in recession and plummeting real estate market prices eliminating much of the home equity built up in homes, such drastic and hard financial times can hit the best of folks. Without a proper emergency fund or savings set aside to handle such occurrences, even millionaires and celebrities, let alone ordinary people like you and I, can get hit by troublesome cash flow crunches.

The solution I think is to know and realize early on that life is inherently unpredictable and fraught with financial peril. Like the stock market, no one can accurately predict the good and the bad that will happen in the future. We can only anticipate and plan for the worst but hope for the best. While there are basic financial planning steps to take, such as investing for retirement through tax deferred vehicles like a Roth IRA account, one of the most important decisions is to save and build up an emergency fund. The amount that you will need to set aside for emergencies will vary from person to person, but it’s important to plan for emergencies. For example, my car recently broke down and I had to face a sudden and emergency $1,200 auto service repair bill to replace my vehicle’s alternator and battery to get it working again. Fortunately, I had saved enough on the side to handle such an emergency occurrence and expense.

The other important thing that we should glean from the Larry King - Ed McMahon interview is to stay optimistic and keep fighting. Never give up in despair. For those who are mired in housing foreclosure, credit card debt, or even perpetual unemployment, there is light at the end of the tunnel. Don’t forget, there are many similarly situated people out there trying to stay financially afloat just like you. Just keep plugging through and maintain the faith.