June 2007

Some food for thought; just in time before the iPhone takes control of your senses.

Old wisdom says:

Money is the root of all evil.

George Bernard Shaw says:

Lack of money is the root of all evil.

St. Paul says:

The love of money is the root of all evil.

I say:

The want of easy money is the root of all evil.

There are two key words here: “want” and “easy” signifying greed and laziness, respectively. Money is just a medium that makes these undesirable qualities more visible - you could probably replace the word “money” with a lot of other things (love, sex, respect, power, oil, material possessions, etc.) and yet that statement would be valid.

The “want” or desire or love for money, in fact, can be a great motivational factor that sometimes makes people work harder (and/or more efficiently). When people are no longer in control of this desire, it takes the form of greed.

Again, greed alone is not much of a problem (a greedy man can only harm himself); however, evil takes roots when the greed joins forces with the tendency to take shortcuts.

Also, for the sake of countering George Bernard Shaw’s statement, evil can take root irrespective of whether you are lacking money or have tons of it. In fact, in my opinion, the evil perpetrated by those who have it all is more malicious than the evil forced out of deprivation.

What is your take on this?

Recently, The Mint Blog published an interview with me in which they asked for a picture of my wallet.

Here is that wretched piece of leather.

Now, I am not a neatness freak by any measure, but the stuff that I pulled out of my wallet before taking the picture almost made me recoil in horror - people probably experience that kind of feeling when they *suddenly* realize that they are deep in debt.

I have intended to clean it up many times in the past few years, but those intentions never materialized. It must have started with just a single receipt (or perhaps a business card) which I did not dispose off in a timely manner - and since then, receipt by receipt, it has grown into this huge nonsensical mass of paper. Why did things come to this point? I think it’s just because of one single, transcendental, cliched reason - procrastination. It’s the result of not getting things done on time.

This brings me to a couple of interesting analogies:

• Some people gain weight everyday by a fraction of a pound - if they procrastinate and don’t exercise (or do anything about it) at the right time, they *suddenly* find themselves overweight or obese after a few years.

• Some people pile up their debt everyday by a few dollars - if they procrastinate and don’t pay it off regularly, they are bound to *suddenly* find themselves overwhelmed by a huge debt after a few years.

Makes me wonder if procrastination might be at the root of most misery. In the past I have written about the positive side of procrastination, but I guess that works only in moderation [ironically, the title of the post was "Procrastination is Good for Your Wallet" - my wallet will tend to disagree with that]. Too much procrastination, with things that really matter, is definitely going to cause problems.

Fortunately for me, it was just the wallet; but I can appreciate how this can easily happen to people in other, more crucial aspects of life.

Anyways, going back to the topic of the interview, here are some of my responses:

Current Financial Strategy:

Save-Save-Save. I try to keep my financial life simple. Generally, most financial transactions are a “returns vs. headache” deals for me and at times, I tend to minimize headache rather than maximize returns. I used to budget our finances to the penny, but of late, I have realized that such micromanagement tends to harm productivity (at least in my case) so I don’t do that any more.

Of course, I spend less than I earn. But that’s not a strategy, it’s a way of life.

Now, some people will disagree with the headache part because I use credit cards 99% of the time (notice that there is not a hint of cash anywhere in that wallet picture above; that’s how it is most of the year) - but for me that’s what is more peaceful than having to keep track of cash.

Best Financial Tip:

Keep an open mind towards financial ideas. Don’t bias against (or in favor of) a certain idea without thoroughly analyzing it. Always take financial advice with a grain of salt…whether it comes from the guy next door or the latest financial guru.

Head over to The Mint Blog to read the rest of it.

Meanwhile, do feel free to share what’s in your wallet.

Some interesting money articles and thoughts from the past few days:

• Do You Know if Your Credit Card Uses The Dual-Cycle or Average Daily Balance Calculation? by Jeremy @ Generation X finance. Jeremy explains the difference between the two types of credit card balance calculations. I won’t be surprised to find many people not knowing about this.

• The Almost Debt Free Approach to Student Loan Debt Reduction vs. Investing vs. Savings by John @ Queercents. Accelerate your student debt payments or just keep making the minimum payments and invest the extra money? John explains how he prefers to approach this dilemma.

• Dollar Cost Averaging: Does It Work In The Real World? How Can I Use It Easily For My Own Investments? by Trent @ The Simple Dollar. Investing 101 lessons here. For those who don’t have a bulk amount to start investing, dollar cost averaging is a good way of going about it. Plus, if you transact with a zero-fee trading broker (like Zecco Trading), this can work out to be very good.
  

• Consumerism. Sinful? by Dawn @ Frugal for Life. Some deep thoughts by Dawn on our consumerist tendencies.

However, to over-consume is, in my opinion morally wrong. This is about being greedy with the resources, whether you can afford it or not.

• The 5 Worst Credit Card Practices by Patrick (as a guest author) @ Five Cent Nickel. Interesting read (although standard knowledge) - if you are into credit cards (like me), you should read this.

• Saving on Wedding Tips from a Wedding Consultant, Part 1 by FMF @ Free Money Finance. Some practical tips towards having an affordable wedding.

• What To Do Before You Get Pregnant by James @ Dual Income No Kids. A few quick thoughts on preparing yourself financially for pregnancy. I am mentioning this for a reason - we recently had an *experience* with a couple who didn’t bother to take care of these things in advance - will write more about it later.

Carnivals:

Festival of Frugality #80 by Elizabeth @ Money for the Rest of Us, featuring my post: Motivation for Frugality - It’s Not Always About the Money.

Carnival of Personal Finance #106 by SVB @ The Digerati Life, featuring my post: Is It Wise To Quit Your Day Job And Depend On Your Website For Income?

I am opening up this question for discussion in the spirit of “what have you got against Wal-Mart?” - along the lines of similar (but unrelated) questions in the past: what have you got against personal finance bloggers? and what have you got against credit cards? However, I have some musings to share before you proceed to make your case.

First, let me tell you why we shop at Wal-Mart.

• Some things are just outright affordable at Wal-Mart and if we buy them from other retail stores, it’s going cost us a significant amount of extra money.
• The Wal-Mart store we general use is really clean - most people find it hard to believe, but that is true - so we don’t have any *cleanliness* barriers that stop us from going there. I think the cleanliness of a store (any store, not just Wal-Mart) depends on it’s manager and it’s staff and probably the guys in our Wal-Mart are good.
• There is an awesome variety of available choices, so we don’t feel restricted when we shop.
• It’s easily accessible (not too far from where we live), and it’s open 24 hours.
• For fresh fruits and vegetables, we shop elsewhere (a local farm market), but for most packaged items (perishable and non-perishable), we drive down to Wal-Mart (except when thrift store is an option).

However, every time I mention our Wal-Mart purchases on this blog, I get emails and/or comments about how Wal-Mart is evil and why I should stop shopping at Wal-Mart. Those comments momentarily make me wonder if I am hurting the economy in the long run by shopping at Wal-Mart; however, in spite of such thoughts, I have been unable to come up with any substantial reason that I would use to convince myself to stop shopping at Wal-Mart.

It’s probably because I don’t really understand how not using Wal-Mart is going to benefit us (or other people) in any way - right now, or in the foreseeable future. If I stop using Wal-Mart and instead start using JC Penny for my clothes, and Kroger for my groceries, how are things going to change? As far as I know, JC Penny (and other similar stores) imports their merchandise from the same countries as does Wal-Mart, and most brands of food items in Kroger (and other similar stores) are the same as available in Wal-Mart. So, except for wearing an “anti-Wal-Mart mask“, I would be probably buying my supplies from the same original sources … and just paying higher prices for them.

Along these lines, I have a few more unanswered questions which I will throw open to my readers here.

• At the present time, how would not shopping at Wal-Mart improve the US economy?
• If the masses stop shopping at Wal-Mart, wouldn’t it encourage Wal-Mart to start indulging in even drastic cost cutting measures - which has the potential to put the entire country into a recession? In fact it’s quite possible that we might have a recession and high inflation at the same time (no more “always low prices”) - an undesirable condition which economists refer to as “staflagation“.
• Wouldn’t thousands (probably hundreds of thousands) of people at Wal-Mart loose their jobs in this case?
• Wouldn’t the stock market fortunes of millions of people dwindle in such a case and cause more misery than good?
• If you are thinking beyond the US, from a global point of view, and are worried about the long hours, poor working conditions, and low wages of people in poorer countries who manufacture goods for Wal-Mart - how is not shopping at Wal-Mart going to improve their condition from this point on?

I am seeking some earnest answers here - so if you have the time and the patience, please feel free to drop a line. I am sure people who go at lengths to explain how Wal-Mart hurts the local and global economy have some smart answers for these questions.

While we are at it, what are your reasons to shop (or not shop) at Wal-Mart? What reasons do you cite when you encourage or discourage your friends/family to use Wal-Mart?

Some interesting reading material:

• Wal-Mart You Don’t Know - FastCompany.com
  
• Is Wal-mart Good For America - PBS Frontline

Last week, I posted a list of 25 things that “we do to save money” and I have been thinking on it ever since. Some introspective questions resulted from the thinking, like: were all of those things done *actively* to save money? or were there other motivations behind the actions - and saving money just happened to be a passive outcome? if money was not a constraint, would we still be doing some of those things?

There are no generic yes/no answers to these questions, but as I was attempting to answer them, I realized that a lot of our actions that save us money (or appear to do so) are (or were) situation specific - probably, saving money was not the main motivation behind all of them.

So, if it’s not always about the money, then what else could motivate you to do something frugal?

To answer that, here are six motivational factors off the top of my head. I will try to explain these through examples to make it easier to understand.

1. Time: I walk to school/work and I count that as a frugal activity that saves me money. However, I have pointed it out earlier that it simply takes more time (and more hassles) to reach school if I drive - and that is probably the main reason why I walk to school. The fact that it saves me money on parking permits is only a secondary motivation. It doesn’t matter if I had a billion dollars (or if someone gave me a free parking permit) - I would still walk to school/work if driving is not saving me significant amount of time.
2. Energy: We cook regularly, but we don’t cook everyday - mostly, on alternate days. Not cooking everyday is frugal in many ways: there is less washing of cooking vessels, less utilization of electricity (or gas) for cooking, less wastage of food, fewer grocery trips, etc. So yeah, it saves some money - but are we really not cooking everyday to save money? I don’t think so; we just don’t have the energy to cook (and clean things up after cooking) everyday. Here, lack of energy is the frugal motivation.
3. Attitudes: There are some things we do “just for the heck of it”. One such example is my worn out pair of jeans in the list of 25 things that attracted a lot of public (and private) attention. Yes, it saves me money because I wear some of my clothes till they wear out (to the point where they get holes in them) - but that’s not the main motivation. Stronger motivation is provided by the fact that I hate shopping for clothes, and that my “attitude” just doesn’t let me get rid of that torn pair of jeans. Even if someone gifts gives me several new jeans, I would be still wearing the torn one for another year.

   

   My favorite (and dilapidated) jeans

4. Preferences: Another frugal example, in which saving money is probably a secondary factor, is our homemade lunch routine. Of course, not eating out for lunch saves money, but even if I had a ton of money, I don’t think I would prefer eating at McDonald’s, Taco Bell, or Subway (the three fast food joints closest to my workplace) - I hate those places (for various reasons). The main motivational factor here is probably the hatred for fast food and preference for home-cooked meals.
5. Lack of Resources: During my early days as a graduate student (when I was single and sharing apartment with roommates), only one of us had a car (and it wasn’t me). That sort of restricted the frequency of my grocery trips, out of town socializing trips, movie theater trips, etc. It wasn’t like I was going only twice a month for groceries to “save money” - it happened because I didn’t have a damn car (and I didn’t like asking someone for frequent favors). Agreed, it was a frugal thing to do, but it was very situation specific. It’s very likely that I would have had a different lifestyle (probably with less “money saving” habits) if I had a car at that time. A resource crunch also encourages the “make-do” attitude - which is probably one of the most fundamental reasons behind a lot of frugal habits.
6. Habits: Here, I will quote my own words from the list of 25 things post:
   

   I am also in the habit of extracting the last drop of shampoo from almost-empty shampoo bottles by filling some water in them - doesn’t save diddly-squat of money, but it’s a fun thing to do.

   It’s pretty clear right there - it’s a habit. I would probably continue doing it even after I become a millionaire. I am sure it will save a few bucks over several years, but that’s not the main reason why I keep doing it. It’s just for the heck of it.

So, in summary, there are things that are done specifically for saving money (buying a used car, renting a small apartment, etc.), but there are a lot of frugal things that we probably do due to other motivational factors - and save money in the process. The six factors listed above are only some of them and depending on your situation, they may or may not be influencing your frugal behavior.

What are the motivations behind your frugal actions? is money-saving your only driving factor?

This advertisement appeared in my college newspaper a few days ago:

Now, what more would you want in that package.

Couldn’t resist sharing the chuckle.

Btw, the habit of glancing over the classifieds pages dates back to my motorcycle buying days.

Feel free to share any funny financial classifieds you may have seen… or perhaps imagined.

Here is some interesting reading material to liven up your Sunday.

• Things You Should Know About Mercury In CF Light Bulbs by my alter ego @ The Tao of Good Health. I had been following ridiculous reports (like this one) about a $2000 cleanup job after the breaking of a CF light bulb; hence, felt compelled to put something together like this. Such blog posts can take the message to only a small section of the society (internet users - who read blogs); but it needs to go out to the masses through other popular media - if we want to seriously encourage the use of CF lights in time to come. I discussed the money aspect of CF bulbs way back in November 2006 in this post.

• What Would You Do With “Found” Money? by ISPF @ Grad Money Matters. An interesting post that looks into the tendency of people to squander away free money. This sort of reflects my thoughts with this post on windfall money.

• Why Did It Take So Long to Decide That it Was Time to Pay Off Our Debt? by Tricia @ Blogging Away Debt. Tricia very concisely summarizes the cause of their debt in a few words - “live now…pay later”. I am sure people who are not in debt must be always wondering about this question.

• Stop, Thief!: 9 Tips To Stop You From Picking Your Own Pockets by Logan @ PowerWealth. Some thoughts on how to protect your personal and financial information from people who are eagerly waiting to grab it.

• Would You Rather Make More Money Or Be With Family? by Ben @ Money Smart Life. Of course, the obvious answer is to have a good balance between the two - but, if forced into making a choice between money and family, there is no question that family will higher on priority. The cost of strayed relationships is much more than the cost of lost money.

• Fifteen Things I’d Like To Say to High School Lazy Man by Lazy @ Lazy Man and Money. Amusing, yet profound words of wisdom from one lazy man to another.

• Your 401(k) is Not a Savings Account by Jeremy @ Generation X Finance. Thinking about borrowing money from your retirement account? Read this post first.

• What to Do with 529 Money If Your Child Gets a Scholarship @ FMF by Free Money Finance. I swear I have a post in my drafts with almost the same title. FMF beat me to it. He discusses this issue with reference to a Kiplinger’s article on the subject.

• Why I’d Hire This Real Estate Agent by SVB (as a guest author) @ Five Cent Nickel. SVB lists some characteristics of a *desirable* (in professional sense) real estate agent.

• There Is No Such Thing As A Budget Failure - It’s Just An Opportunity For Feedback @ Not Made of Money. The author puts a positive spin on budget failures. The message is to learn from your failures and apply the knowledge to tweak your future financial planning.

• Why You Should Stop Paying For Storage And Just Get Organized by David @ My Two Dollars. This one made it to the Digg’s front page (and stayed there till Dreamhost screwed things up for David). This is about how to stop hoarding and start living - with detailed instructions on how to get organized.

I recently received an email from a reader with this question:

I am thinking of running a website in order to generate income and quit the rat race; can you tell me from your personal experience, is it a wise decision?

There are a few reasons why this question bothers me:

• “thinking of running a website” doesn’t sound very confident and is indicative of the fact that you probably don’t have one yet.

• “quit the rat race” sounds more like you are fed up of your day job - but it doesn’t show any love for developing (or maintaining) websites. In that case you should probably look for all possible alternate sources of income (for example, selling stuff on eBay, working at a different job, etc.), don’t just stick to starting a website.

• Many people mislead themselves into believing that blogs/websites can make a ton of money without requiring a lot of work. I am getting the vibes that the author of this question perhaps belongs to that category. A general observation is that most people have a tendency to grossly underestimate the efforts that go into starting and maintaining a good website.

For a moment let us assume that the question was asked in great earnestness and none of the above reasons are valid - that sort of puts us in position where we can actually start discussing the issue.

Let me list some facts/issues to be considered before you even start thinking about whether it’s wise or unwise to quit your day job.

1. Websites don’t make money instantly. Generally, the income from a website depends on it’s popularity and popularity does not come overnight. People need to trust (or enjoy) your content (if you are blogging) or your product (if you are selling a product) before you start becoming popular and that takes time and a lot of efforts.
2. With all your sincere efforts, dedication (before and after launching your website) and average growth in popularity, it may take anywhere between several months to a couple of years before you start making even nominal amounts of money. By “nominal” amounts, I mean a few hundred dollars a month.
3. In most cases, websites generate incomes that are proportional to the number of visitors and hence are generally at Google’s mercy (contextual pay-per-click ads like Google AdSense). Such type of income is not “guaranteed”. One unfavorable tweak in Google’s search algorithm and a significant portion of your income can vanish in thin air overnight. You need to acknowledge this and chalk out contingency plans for such situations. You need to think about how to diversify your income in order to minimize the pain in such cases. For example, you could probably sell a service or a product - or do something else that doesn’t depend too much on search engine results.
4. You have to take care of your own retirement benefits and health insurance and you don’t get any paid holidays. Obviously, your website income needs to exceed your day job income if you are thinking of quiting the day job.
5. There are many things beyond your control that can screw up your website (and hence your income). For example, your website hosting company might kill your website for a technical reason, you could screw it up while editing stuff, or someone can hack into it ~ again you need to think of backup plans for all such situations before you start relying on your website income.

Now, let us look at some specific issues.

• First ask yourself: exactly what amount of website income am I looking to generate? If you are earning $100,000 a year and want to replace that with your website income, all I have to say is “good luck to you sir (add a chuckle if you want)”. It’s not that people don’t earn $100,000 through websites - it’s that it doesn’t happen very often and takes enormous amounts of professional efforts (and probably a lot of leverage) to get there.

• By the way, the median household income in US is about $46,000. Assuming that your household makes median income and that you contribute half of it (and your spouse contributes the other half), you are still looking at $23,000 a year just to match your day job income (read point #4 above). Approach your website ambitions with these numbers in mind - if you are planning on quitting your day job.

• For higher income generation (of the order of $10,000~$15,000/yr or more), you need to look beyond blogging. You will probably need some brilliant new website idea for a service or a product that people are going to like. In this case, you should be handling your ideas in a highly professional manner; treat it like a serious startup company instead of an amateur website. The planning an coordination in such an effort might be more intensive than an average day job - so quitting your day job might be the only way to pursue such a venture. However, you got to have a high level of confidence in your product/service and a strong support (in terms of man power and money) to attempt something like this.

• For lower income generation (few thousand dollars a year), you could probably start and maintain a very good blog. Focus on generating good content - this is the world’s most cliched statement ever, but it makes sense. Contradictory as it may seem, you should stop blogging for money if you want to make money. Blog for generating good content if you want to make serious money. You should also keep in mind that even with great content, it is not guaranteed that a good blog will earn a lot of money - it depends on how successfully you monetize a good blog (interestingly, it is guaranteed that bad blogs will never earn good money).

• Believe me, blogging for a few thousand dollars a year is a very tall order (although very much achievable) and will not come without persistent hard work and great content. If you follow this approach, the safest thing to do is keep your day job and blog alongside; wait for a couple of years and see where things are heading - if you have not made much headway with your blog income till that point - quitting your day job is probably not going to work for you.

• By the way, don’t get too optimistic after reading about extremely high income numbers from Google AdSense or other advertising programs, unless they come from a popular and trusted blog - there is a general tendency to showoff inflated advertising revenue numbers.

So, finally, is it wise to quit your day job and depend on your website for income?

If you are an average person, just looking for a break from the boring day job routine, my honest answer is - No, it’s not a wise thing to do. You can work hard on a website and really make a lot of progress in a few years, but till that time don’t even think of leaving your day job.

If you are really passionate about blogging or love working with websites or have a brilliant idea for a product (or a service), then you probably have a better chance at making it big sooner - but even in this case, make sure you consider all the issues raised above before you call it quits.

The wisest thing you can do is to make an informed and well calculated decision (either for or against your day job), and work hard and excel at whatever you ultimately decide to do.

To end this, I will once again make the message very clear - it is foolish to assume that you can make a ton of money just by creating a website, without putting in a lot of hard work and dedication into it.

Although, in this write-up, my thoughts were specifically directed towards someone wanting to start a website to make quick bucks, you could easily generalize them to any other entrepreneurial foray. There is no such thing as easy money.

Feel free to share any additional comments you may have on this issue.

Before I start praising Zecco for it’s $0 trades, I have a few remarks to make about their customer service. My first experience with Zecco was late last year (around early December) when I first applied for an account following the lure of free trades. The enthusiasm didn’t last very long (partly due to the $2500 minimum opening balance), and although Zecco opened an account in my name, it was never enabled for trading (it was put on “hold” as one of their emails later explained).

Recently, it dropped the minimum account opening balance requirement to $0 ~ so I thought of giving it another shot. To avoid messing with the earlier aborted account, I opened a new sub-account (this is subject to special conditions - read this comment by Chuck below, and my reply to it. Following their terms of service, it’s not a good idea to open another account if you have already one that has been cleared for trading). This account was again delayed (due to some complications) - but I was informed about the problem only after a week.

Towards solving the problem, I emailed them the necessary documents - and didn’t get any acknowledgment for yet another week. Meanwhile, to avoid wasting more time, I proceeded to connect my checking account to Zecco via ACH, in the hopes that my paper work would be cleared by the time the money is transfered. Surprisingly, the ACH procedure went smoothly and the funds were in my Zecco account in about 6 working days - but there was still no word about the status of the paperwork.

Finally, as my patience was wearing out, Zecco sent an email informing me that they are still “processing” my documents and it would take a few more days to get things started. Never heard from them after that.

Yesterday, just for the sake of it, I signed in to Zecco to see if things have been cleared and sure enough it didn’t show any outstanding documents ~ finally, I was ready to start some free trading. Goes without saying that I didn’t receive any notification about my account being cleared for trading.

The whole account opening procedure took almost a month.

Oh well…. so much for $0 trades.

Fun fact: Zecco doesn’t have a damn toll free number!

In summary, their customer service needs a very serious overhaul. Hopefully they will work on it as they mature.

• My First Zecco Trades

With that rant out of the way, let’s discuss the trades.

Here is a screenshot of the first trades I placed through Zecco late yesterday night (rather very early today morning). You can see the obvious hesitation (the canceled trade). First, I went for iShares MSCI Australia Index (EWA) on account of it’s strong historical performance and it’s 5-star rating from Morningstar (as displayed on MSN MoneyCentral).

However, later I read some articles on The Motley Fool about emerging markets and decided to cancel the EWA order and go with the Vanguard Emerging Market ETF (VWO). Honestly, I don’t have any technical reason to explain why I did that - I just got swayed by this article on the Fool about VWO.

Update: the trades have been successfully executed - I was a bit worried in that department, given the propensity of things to go wrong with my Zecco experience so far.

Hopefully, I will have a good start here.

Any opinions on these choices?

By the way, you must have noticed that I am only talking in terms of ETFs for now. I don’t think I am at a position to start messing with individual stocks yet. May be sometime later this year.

• Some Thoughts on Commission Free Trades

Although their customer service sucks at present, I have to give credit to Zecco for thinking out of the box with respect to commission free trades. I think the idea is awesome.

Here are a few reasons why I think it’s awesome:

• Commission free trading makes investing a whole lot easier for occasional small-time investors like me. People can actually think about regularly putting their weekly small savings into the stock market without having to worry about per-trade fees. In other words, it will encourage dollar-cost averaging - which is a good thing for a lot of people (I am thinking students) who don’t have large amounts to invest.
• On similar lines, commission free trades will cause investors to look at ETFs from a totally different point of view (again, think dollar-cost averaging for ETFs). For example, widely accepted statements like the following will cease to have relevance.
  

  Exchange-traded funds (ETFs), with their often-minuscule expense ratios, would seem to be the perfect vehicles for dollar-cost averaging, but initial appearances can be deceiving. Source: Investopedia

  Exchange-traded funds have many strengths, but individual investors should be wary of investing in small amounts. Transaction fees cannot be avoided with ETFs as they can by going directly to a traditional no-load mutual fund, because ETFs must be bought and sold like a stock through a brokerage house. For substantial purchases, this transaction fee is an insignificant percentage, but for small purchases it becomes unreasonable. Source: Yahoo Finance

• Personally, free trading will give me the long awaited opportunity to experiment with stocks. For example, without putting in too much money, I want to try out a list like this one on MSN: Top 10 stocks and tweak it over time. Such a thing wouldn’t be affordable in the presence of significant transaction (and/or fixed) fees.

I am not sure how long Zecco can run with it’s promise of $0 trades, but as long as it continues, I am hoping that Zecco’s (hopefully successful) model will encourage other popular online brokerage firms towards commission free trading in time to come.

• Useful resources:

Zecco Review by Jonathan @ My Money Blog.

First Trading Experience with Zecco by Sun @ The Sun’s Financial Diary.