Stealth Wealth Are you under the radar?

Monday I got an e-mail from Sharebuilder telling me that they were bought out by ING Direct. I don’t think its a bad thing as long as things don’t change because I haven’t had a problem with Sharebuilder so far in the over 2 years I’ve been with them. I actually hope that my sharebuilder actually make it easier to get an ING account if I decide to in the future. I’m not sure how long it takes to get an ING account now, but I hope it streamlines with Sharebulder.

I’ve known about ING’s checking and saving accounts, but haven’t actually thought about opening one until they bought sharebuilder. I may actually try the electric orange checking account, which pays over 3% interest and free bill pay and debit card. I’m going to see how they handle Sharebuilder first before I jump into it. I really don’t need two checking accounts, but I wouldn’t mind the 3% interest on money I use to pay my bills. I need to keep a checking account at my bank I work at for obvious reason.

One possibility would be to receive my direct deposit and transfer my paycheck into electric orange account and just pay everything from that account. We’ll see later though.

Here is the e-mail I received from sharebuilder announcing the buy. I’ve replaced my name with “Stealthy”.

 

November 19, 2007

Dear Stealthy,

ShareBuilder has some exciting news. As of November 15, ShareBuilder has been acquired by ING DIRECT, the nation’s largest direct bank with over 5.5 million customers and $75 billion in U.S. assets (part of Netherlands-based ING, NYSE: ING). ING DIRECT shares our vision of helping Americans increase their savings.

ING DIRECT is widely recognized for offering some of the most popular and easy-to-use savings products. Joining the ING DIRECT family will benefit you by providing simple and innovative products and services that can help you meet your saving and investing goals including savings, checking and mortgages.

Rest assured there have been no changes made to your ShareBuilder account. You can continue to use the same account number, login and password, and can access your account anytime at sharebuilder.com. Over the next few weeks, you’ll begin to see ShareBuilder adopt ING DIRECT’s signature Orange color. Also, get ready to see some innovative new products, services and additional value as ShareBuilder becomes part of ING DIRECT.

We look forward to sharing more information with you over the coming months. If you have any questions, we invite you to contact us at 1-800-747-2537.

The ShareBuilder team is really excited by what this news means for you!

Best regards,

Dan Greenshields
President
ShareBuilder Securities Corporation

I’ve started a new business venture. I’ve started a few, but none really turned into anything. I think the one that progressed the most was the record label, which I actually signed one band and recorded an album. The band broke up 8 months later. 

My new “million dollar idea” is a site where people can look up to see what banks are in their town or a town they are moving to in the future. I guess you could call it a bank database. All you have to do is go to the site and enter what state you live in then the county. It will bring up all of the banks in the county with a link to their website.

My original idea was to create a chart of each of the banks in the county and list the type of accounts and services each one has as a way to find out which bank offers what you need. This will more than likely come along later because right now I’m having to look up each bank in each county and type that up. Too bad I don’t have some special code to enter and it bring it up automatically.

Anywho… I’ll probably just do a few of states here in the south as a test run. Here is what plan on doing so far -

1. Create a database of banks in Alabama, Georgia, South Carolina, and Tennessee. (Florida is more populated and I’ll hold off on that one until I finish the above four)
2. Have a link to each bank
3. After completing the databases for the above 4 states I plan to create a chart showing what each bank offers compared to other banks in that county.

Does anyone have anything I could add to make it more appealing or informative?

PS…I have just bought the domain, but I don’t want to release it right now.

The Way of the Shepherd, by Dr. Kevin Leman, is a book that begins with William Pentak going to interview Theodore McBride. Mr. McBride is a reclusive executive that doesn’t give many interviews. He is asked hundreds of times to give interviews because he is the most respected business leader in America, but turns the reporters away each time. He accepts Mr. Pentak’s offer because Mr. Pentak is young and can tell the seven principles of managing “your flock” in a way that matured business writers could not.

The first of the seven principles is knowing the condition of your flock. A manager with workers under his/her guidance has the responsibility to make his/her flock the best he can make it become. First a manager needs to get to know his flock. He needs to engage in one-on-one conversations with each employee in his flock. A manager needs to get his flock to view him as a guide instead of a commander. If the flock views its manager as a guide (someone who advises or acts as a model) rather than a commander (someone who commands or controller), the workers will value the manager more and work harder because he cares for them.

The second of the seven principles is discovering the S.H.A.P.E. of your flock. “S” stands for strengths. A good manager makes sure that the person he has doing each individual job has the skills needed to do the job efficiently. “H” is for Heart. If a manager’s employees have the “heart” and passion for their occupation and what their doing they will work harder for the manager. Excellent managers know how to make their employees have a passion for their job and feel important. The third letter is “A”, which is for attitude. A good attitude can carry an employee a long way. An employee with a good attitude usually has a teachable spirit. On the other hand, employees with a negative attitude are hard to teach and tend to not learn as fast if at all. “P” is for personality. Everyone has a different personality. A manager needs to learn what personalities he needs for each job when it comes to hiring or promotion. Finally, the last letter is “E”, which is for experiences. Through experiences a person gains knowledge from it and experience. Listen to other experiences of other employees. Also a good manager will listen to an applicant’s experiences to see what he has gone through and learned.

The third principle is the manager helping the flock identify with himself. A manager should act how he wants his employees to act, treat his employees like he wants to be treated. He needs to show authenticity, compassion and integrity. By showing those three characteristics the manager is setting a high standard from his employees since he would be practicing them.

Next a Manager needs a safe “pasture”. A manager needs to make sure his employees feel safe on the job. A good manager doesn’t just sit in his office and do paper work. He gets out among his employees and talks to them. By being visible and communicating with his employees they tend to feel safer and closer to the manager and company.

The fifth is leading your “flock”. Give your employees comfort about the future. Also mentioned in this book is that managers should use persuasion instead of coercing an employee into believing something or doing a task. If a manager neglects his employees they tend to lose focus on why they are doing their job or what the future holds for them. The longer people are neglected the wearier they grow.

A rod was used to teach the sixth principle. This principle is about how a manager stands in the gap for its employees. He backs them up and takes the heat if someone has a problem with his workers. If it’s the workers fault, then the manager will correct the employee privately. Doing all of this creates a sense of security and trust for the manager. When it comes to correcting an employee the manager should use this opportunity to teach a lesson. Disciplining an employee isn’t to solely for punishment, it is to teach a lesson so that the mistake isn’t repeated again.

The final principle is having the heart of a “Shepherd”. A manager needs to prove himself worthy of being followed. Without showing that you care for your employees and are willing to pay the price to maintain them a manager will lose respect and will not be followed in an organization. Eventually the employees will go to another organization where a manager does look after his employees.

Enron came into existence in 1985 after federal deregulation of natural gas pipelines occurred. Enron was created from a merger of Houston Natural Gas and InterNorth. Through the merger Enron incurred a large debt and from deregulation no longer had exclusive rights to its pipelines. Kenneth Lay, who was CEO at the time, hired McKinsey and Company to help with developing Enron’s new business strategy to generate profits and cashflow. A young consultant named Jeffery Skilling was assigned to the Enron account. Skilling was a bright consultant with innovative ideas. His solution to Enron’s cashflow was to create a “gas bank” in which Enron would buy gas fron a network of suppliers and sell it to a network of consumers. Enron charged a fee for the transactions and assumed the associated risks involved. Lay was so impressed with Skilling’s innovative ideas that he created a new division in 1990 called Enron Finance Corp. and hired Skilling to run the operation. Now that Enron has Skilling’s leadership Enron dominated the market for natural gas contracts and had more customers than its competitors.

In 1996, Skilling convinced Lay that the same model of a gas bank could be applied to electric energy. Soon Skilling was loads of the brightest traders straight out of the top MBA programs in the country. One of his first hires was Andrew Fastow in 1990. Fastow became Skillings protégé and climbed his way swiftly up the corporate ladder to CFO in 1998. Traders where hired for a division of Enron known as Enron Capital and Trade Resources which turned into the nation’s largest wholesale buyer and seller of natural gas and electricity. Traders where paid on commission as to the amount of electricity or gas they could sell. Skilling encouraged traders and other employees to think outside of the box. Traders began to think of ways to make more money on sales to get profits up and so they could get a bigger bonus. Some traders would call power plants out in California and ask the plant manager to cut off the production for a few hours then power the plant back up, also asking the manager to make an excuse as to why the plant went down for a few hours. Those few hours that a plant would be down cause the state of California billions in the end after being done time after time by traders. Enron traders were pretty much causing the blackouts in California and were making millions while in the process. Causing shortages caused the demand for power skyrocket giving the traders higher sales figures. I saw a figure as to where the normal price on the commodities market was around $50, but it topped out at around $1,000 with traders tampering with the supply. The state of California said that they had more than enough kilowatts for the whole state and there is no way they could have a shortage.

One of the first ways that Enron fooled investors was inflating their earnings to show profit and heavy growth. Arthur Anderson approved Enron to use “mark to market” accounting which allows companies to count as current earnings profits they expect to earn in the future from energy-related contracts. This means that Enron could just make a guess at what they think they could receive in the future for services. Most of the time, they would use extreme numbers and would go beyond 10 times what they would really bring in on a contract. Enron had many divisions that were unprofitable, but was able to make them appear profitable by having their accounting periods end in different months. Each month, money would be shifted from one company to another to make it appear there was a cashflow and profit for the company. With all of the divisions appearing profitable analyst were happy with Enron’s income statement and rated the company a buy.

There was no one single unethical action that brought down the energy giant Enron. It was a combination of several different illusions. Illusions that kept investors and analyst focus on what they said they were receiving in revenues instead of what they were actually receiving. Company executives talked the stock up and strongly encouraged its employees and the public to invest in the company. While many of the employees were placing all of their retirement into Enron stock the price kept rising hitting $60 at one point. The executive team was screaming buy while selling under the table. Everyday news is coming out about other shenanigans that went on at Enron. If there is one moral that you could come away with reading this article it would be to always analyze a company yourself and don’t go buy what people in the market are saying. I know most people couldn’t tell about Enron because of faulty income statements, but for other investments you should do the research yourself and not rely on information from what people say on TV or on message boards without checking out to see if the information is valid or realistic.