I’ve heard a lot about Warren Buffet‘s annual letters directed to the lucky shareholders of his legendary Berkshire Hathaway. I decided today to open up his most recent letter (2009) and consequently read some of the most authentic and understandable financial writing that I’ve ever seen. Buffet’s extraordinary returns in the stock market garner him deserved praise already (the 2009 letter goes into more detail), but I think his ability to articulate and convey both facts and opinions with candor and clarity is a rare skill that should be celebrated and appreciated. I don’t think I’m the only one who feels that our financial markets (and in turn our entire society) would be better off if there were more people of Buffet’s intellectual and ethical caliber.

P.S. Here’s a Buffet project that I only found out about recently, though it’s been around for about a year now. The Secret Millionaires Club is an online cartoon that Buffet has started to teach kids about investing, finance and entrepreneurship in a friendly and familiar format.

S&P 500 Dividend Aristocrats

The list is only compiled annually so if you want to see the most recent survivors (with several notable firms kicked out) do some old-fashioned sleuthing on your favorite Internet search engine…

[Disclaimer: If the following comes across as a rant, I apologize as I just concluded a thoroughly unsatisfactory call with Bank of American Customer Service]

I expounded upon the incredible gap in earning potential between online banks and their brick-and-mortar counterparts, but one thing that is often brought up in support of the latter is their physical presence on nearby street corners and in local shopping malls. It would be fair to assume that these banks would be able to provide much better customer service with all the money they are stealing from their customers by not providing the highest interest rates around, but I’ve found that time and time again to not be the case.

While it is true that I’ll never be able to walk into an Ally Bank and speak to a friendly Ally Bank representative, I think if you bank anything like me this will hardly make a difference in your day to day life. After all, how many times have you been inside a bank since you made that initial deposit with that friendly sales representative? (and you can even do that online nowadays) On the other hand, I’ve had to make many calls to the different banks and financial institutions I frequent, usually to dispute a service fee or reset a password. I think Ally more than makes up for their lack of local branches with their excellent phone service. Their phone lines are open 24 hours a day, seven days a week (call them right now at 1-877-247-ALLY), and their web site even lists the estimated wait time before you’ll get to speak to a living breathing representative.

Let’s compare this to my experience with Bank of America’s phone service, which I had the pleasure of using just moments ago. After patiently listening through the maze of unrelated options I could select by pushing a certain number (or even speaking it!), I realized none of them described what I wanted to get done. After finally figuring out how to connect to a real person (you can’t do the press zero trick right away, but it does work eventually), I got transferred to someone. After explaining my situation, she decided I would best be helped by being transferred to the Online Banking line. I graciously accepted her offer to transfer me (what else could I do?), re-entered my account number, and re-explained my situation again. The lady then decided it would be best if I were transferred to the Promotion department. I again graciously accepted her offer to transfer me, only to find myself back at the main menu with the same prompt I had heard 20 minutes prior to enter my account number and social security number. Needless to say, I am not all that pleased right now.

The next time to expound the virtues of a “real” bank like Bank of America or Wells Fargo over those fly-by-night frauds whose shining logos you don’t see on every street corner, perhaps you should consider the customer service (or lack thereof) that you actually receive.

If you’re looking for a place to start, I especially liked these two episodes…

Everything Students Need To Know About Money

Four Ways To Spring Clean Your Portfolio

• Bank of America APY*: .10%
• Wells Fargo APY: .05%
• Wachovia APY: .05%
• WaMu/Chase Savings APY: .01%
• Stanford Federal Credit Union APY: .501%

The list goes on, but the gist of what I’m saying is that when you bank with these banks (and many others for that matter) you miss out on interest you could be earning in savings accounts with highest interest rates. The comparison is not perfect, and in order to be comprehensive I’d have to list the separate minimum account balances and recurring fees for different banks, but I can say from my own personal experience that you are sacrificing little by moving to a better interest-paying bank and gaining a lot.

I really started this post with the sole intention of sharing my experience with a bank, so I’m not quite sure where all of the above came from (I think mostly righteous indignation that so many people settle for such low return on their already low interest rate). In any case, I suggest you check out Ally Bank, where I am a new customer. They offer several accounts, and I’ve already opened a savings account and a money market account. What are their interest rates, you might be asking? 2.00% for the savings account, and 1.80% for the money market. I’ll add more about Ally (and other banks with equally enticing interest rates) in the near future, but I’ll have to stop now and sleep.

post scriptum: I just thought of something that I think I’ll type at this very moment (a la Ulysses). It seems like banks with teeny tiny interest rates do their best to hide it from potential customers (and distract them with free stuffed animals and mini soccer balls). Conversely, the banks who have the highest interest rates understandably use it as a major selling point. By this impeccable logic, my advice to maximize your interest would be to put your money in a (reputable) bank with the largest font size for their interest rate! What do you think?

*: APY (annual percentage yield) is not as scary as it seems. Spend a few minutes and learn about it for yourself here

You may know that ING Direct (that big bank) took over the online discount broker Sharebuilder some time ago (cunningly wiping out NetStockDirect in the process). It’s quite easy to find promotions for starting an account with Sharebuilder (existing members are given codes that will give you a $25 bonus and them a couple free trades), but there’s one in particular that I’d like to point out. Costco has had an ongoing promotion with Sharebuilder, offering a one-time cash bonus for starting an investing account (right now $60, but it’s been as high as $90 before), as well as rebates on the monthly fees for Sharebuilder automatic investing (see here for details on Sharebuilder’s auto investing plan). You do need to be a Costco member to take advantage of this, although I presume that some of you already are (and the rest of you should strongly consider it). The promotion link is carefully hidden on the Costco Website (Homepage>Services>Online Investing), but I’ve posted it below.

Costco/Sharebuilder Promo Details

I already have a blog hosted with WordPress (Thinkers Without Borders), but I’ve set up Investrophy specifically to talk about investing and related subjects. I left a post on my other blog explaining why I started Investrophy, and I’ve pasted that explanation below.

In the truest sense of a corporate spin-off, I’ve decided to start another WordPress blog focusing on the sole subject of investing (in stocks mostly). I considered posting my investing-related entries to TWB, but I figured that both the writer and the reader would benefit from the clarity provided by two separate blogs.

So, why investing? Well, I have been intrigued by the entire enterprise of “investing”, and I still remember the time when I had absolutely no idea what investing even meant (I own a company?!). I’ve come a long ways from those days, although the more I explore investing the more I find to learn. One thing I know for sure, however, is that the ability to invest wisely is a fine skill for anyone to possess.

I invested my family’s money in a few stocks before I entered college, using a custodial account with Sharebuilder. (Now that I’m above the age of majority (18 in California), I can open brokerage accounts in my own name!) I made choices which have proven great on one hand and terrible at the other (see AAPL for the former and CYKN for the latter).

I do not claim to possess any extraordinary ability to choose investments wisely, although I figure that since I’m reading enough investment guru books, websites, and articles that I might as well disseminate the advice I think is most wise. Thus, don’t expect much original ideas from me, but rather paraphrases and perhaps some commentary on my part. Reading the lengthy disclosuse/disclaimer statements at the end of many articles on investing does scare me a bit, but I guess I’ll just say right off that I shouldn’t be held responsible if you lose money following information from my blog (if it makes you feel any better, I probably will have lost money too…). On the other brighter side, if you do make money thanks to my blog I expect nothing in return.