My Bank And I Must Live On Different Planets

As part of my plan to get my online store up and running, I decided to tackle the financial side of things as my first scary step. Plenty of people tell me that I’m good at finances, but the truth is I’m just good at basic maths. Merchant accounts, gateway providers and financial policies are outside my realm of expertise.

I started my research by going to my bank’s website and having a look around. There were a few things I understood, but not a lot. I submitted a request for a call back, then moved on with my life and began looking into other options.

A few days later, my bank called me back. If you use a German bank, please stop reading now because you probably won’t believe another word of this blog post. Believe it or not: getting a call back two days later outside the requested hours is actually considered good customer service for an Australian bank.

We chatted a bit about my business model and what I want to do. My plan is fairly straight forward: design a product (done), write a website to sell it (in progress), set up an automated back end so that anyone using my online store doesn’t have to wait for me to do my bit (the current research), fix any mistakes I inadvertently make (pending launch). All I wanted to know was what I need to do to get an account to build the transactions into.

The man from the bank was delightful as he explained the process. What he was explaining? Not so great. I would need to go to my branch, submit an application form, show them the business ready to launch, and then wait six to eight weeks. If there were any problems with my application, this process could be delayed by six to eight months. A merchant risk assessment department will be involved, and I must show them that my business is a great opportunity for them.

To clarify, all I want is to have an account that my customers can put money into. I might be in crazy land here, but I am fairly sure this is not a revolutionary idea that will rock humanity to its core. I hear stories, possibly only rumours, that this is something other people have done before.

Despite my shock at the timelines, the conversation got worse. If I want to trade in multiple currencies, it would be $40 per month per currency in account keeping fees. I need to keep the equivalent of $5,000 as the minimum balance in each account. To clarify, if I want to accept AUD, USD, Euro and GBP, I would need to have $20,000 sitting there in my bank account, doing nothing. That is nearly the cost of my living expenses for a year. For those of you who are routinely operating in those currencies, that is 21,024USD, 16,088EUR and 13054GBP.

Then there were the requirements. Not only do I need to have a fully prepared business sitting there cooling its heels for two months, but there are standard requirements that this business must fulfill. The one that boggled my mind was the requirement for a landline phone. In order to have a bank account to trade with my online only business, I need a landline. Not a mobile, not a Skype account, but a phone that plugs into a wall. I protested this quite loudly, and he said that we might be able to explain that it is a home based business. There was a bit of disdain in his voice. I used up a year of professionalism by not saying: “Nah, I really operate this business from Bavaria while I relax at Oktoberfest.” This was really difficult for me, and I expect applause and a medal.

At the end of our conversation I decided that I will go with PayPal. He warned me that I might turn off some of my customer base because some customers don’t think it is very professional. In my world, it just isn’t professional to create obstacles for my customers the way the bank has for me. If losing one or two customers over PayPal will keep $20,000 in my existing account and means I can launch months earlier, I think I can live with that.

The Paperwork Shambles (Probably Part 1)

I’m in Melbourne for a few days, staring at the list of things to do, and vaguely wishing I hadn’t given up alcohol. The past year and a half has not been the most organised of my life. When I first became sick I was working full time and studying, so a lot of things had been put on the back burners with an I’ll-get-to-it-later timeline. Add in a debilitating illness that I am still recovering from, and a lot of important things simply haven’t happened.

I just activated my new Visa card. They apparently sent it to me in November 2010. This isn’t as bad as it sounds, since my old card was still working, but not fabulous since this was the second bank card I have activated in the past week (the other one was from May 2011). This evening I realised I have more than twenty letters from various companies that I have not opened. Somewhere in my paperwork shambles I even came off the electoral roll, and I really need to get myself back onto that.

Ugh. I want to go back to Canberra.

The sheer amount of little things that I have to deal with is impressive. The calm, rational side of my brain is happy to deal with this, breezily shrugging and acknowledging that everything can be dealt with one way or another. The stressed out, overwhelmed side of my brain is wondering if I should just borrow the shredder I bought for Mum and quietly feed my problems into it.

In some ways, this mess is a blessing in disguise. I am at a wonderful point in my recovery where I am able to do complex things in short bursts, and most of the chores I have waiting for me in Melbourne fit that category perfectly. I need to reconstruct my own timelines, figure out where I am, decide where I need to be, and go from there.

One of my one percent realisations was that my structure determines my outcome. This realisation has had the impact of a hundred percent change, but is in itself a very small shift in my mental attitude. Once I have a solid framework to build off, everything from that point moves towards the goal. If I take a few extra hours at the start to plan what I want and need, I can save myself weeks or months in repairing work later.

My paperwork is reminding me of many structures that I can build, all of which will give me a greater chance for success. Each little shift in these structures will have long lasting implications for my prosperity and happiness, which can only be a good thing. They are one time shifts, so they will sustain themselves. I can review them as often or as infrequently as I like once they are established.

First on the list is my banking. I have activated all of my cards, so my accounts are once again fully functional. Over the last week I have reviewed the interest rates for accounts I have and accounts I could set up. I am moving my money for better returns, which is essentially giving myself a lovely little pay rise. I am consolidating accounts, which should save me the ridiculous fees that Australian banks feel entitled to charge. Fewer accounts means fewer statements, and fewer statements means I won’t have so many unopened letters sitting on my desk in the future. My time investment here will be approximately one day, spread over a few weeks. In financial terms, it is a gain of over $400 per year with the increased interest and the reduced fees. In future effort, I will probably reclaim the spent time within a year with less monitoring to do.

There are some accounts out there with a higher short term interest rate than the one I have chosen to go with. The catch on these accounts is that after four months my interest rate will drop considerably. It is the banks’ way of luring me in on the gamble that I won’t remember to move my money at the end of the term. They are right, I won’t, and so I have chosen to ignore their game and go for one that offers a middle rate of return. I don’t need to set myself reminders. I don’t need to lose a few days of interest payments with each account shift. I can calmly plan for a new budget and move on with my life.

Once I have everything set up, I plan to automate my money transfers and bill payments. I don’t want the hassle of having to remember to pay a certain bill by a certain time. For an investment of five minutes per account, I can save myself the late fees I sometimes get stung with since I became sick.

I feel positive about the opportunities in my situation. There are still so many things to be done, but I can get to them one item at a time. I just need to focus on sub sections of the list and not stress out. Hopefully the government won’t call an election before I get there.