When it comes to money, I figure the Internet owes us. After pumping up the stock market so high it crashed, shouldn't the Internet help clean up the financial mess?
Like most folks, I've watched my retirement savings shrink since the Internet investment bubble burst nearly three years ago. But the same technology that inflicted financial pain has also been a source of solace, because I've used the Internet to shore up my finances during this prolonged bear market. Every year I stumble across more Web tools that help me save money or polish my investment strategies; hopefully the big payoff will come when the bear finally crawls back into hibernation.
Don't get me wrong. The Internet is nowhere near fulfilling its promise of providing a simple, all-in-one electronic dashboard to let us pay bills, transfer funds, make savvy investments and track spending. You can do these things online now, but they're so time-consuming and disjointed that it's more bother than it's worth. All three top financial portals -- America Online's personal finance channel, MSN Money and Yahoo Finance -- make valiant attempts at pulling everything together, but my experience suggests the dream of personal financial "aggregation" online remains impractical given the current state of Internet software.
For my money, the Internet's strength in money management lies in two kinds of tools, both of which help you squeeze more from less. First are Web sites that comparison-shop for financial products so you can earn higher interest rates on bank deposits and pay lower rates on loans. Second are investment analyzers, typically computerized programs that help you see how much risk you're taking and how diversified your holdings are and project your portfolio's future value under various scenarios.
Hundreds of Web sites angling to be your pal in one of these two categories popped up from 1998 to 2000. While many have died, a number survived. Here's a look at some I've found useful:
* BankRate.com is the Web's leading site for comparing interest rates on CDs, savings and checking accounts, and various loans. It also provides the technology for rate comparisons at AOL, Yahoo and other financial portals, but I prefer going directly to the site (www.bankrate.com) and cutting out the middleman. BankRate.com helped me realize how much more interest I could earn on certificates of deposit if I looked beyond my own bank. This week, for example, BankRate.com showed ING Direct offering one-year CDs paying 2.6 percent interest, considerably more than the 1.20 rate available from Citibank online and even lower rates at other banks.
* InsWeb (www.insweb.com) is one of the Web's best spots to comparison-shop for insurance. It saved me a chunk of change on my auto insurance policy, a savings that gets compounded every year I don't pay the higher rate to my former insurer. InsWeb's easy-to-use tools also helped me settle on a term life insurance policy that a local agent actually sold me offline, because InsWeb let me quickly get comparable quotes from other major insurers.
* LendingTree (www.lendingtree.com) is a publicly traded mortgage broker than lets people comparison-shop for loans online. Its stock doubled last year as falling interest rates triggered a refinancing wave, sending people online in droves to find the best possible deals on new-home loans, refinancings and home-equity lines of credit. Lots of people use LendingTree to get an idea of the going rates and then negotiate with local lenders offline. But you can actually apply and obtain loans through LendingTree.
* ConsumerInfo.com and MyFICO are heavily used Web tools for managing personal credit. In this age of identity theft, experts recommend that you check your own credit report every year or two, in case someone is secretly opening accounts in your name. For $35, Experian's ConsumerInfo.com lets you see your credit files at Experian, Equifax and TransUnion, the major credit reporting agencies, in a single report. MyFICO (www.myfico.com), a Web site created by California-based credit rating firm Fair, Isaac and Co. , will sell you the same report for $40, along with details of your special "FICO" credit score, which lenders typically use to set interest rates on your loans. MyFICO also offers a $70 "credit watch" that e-mails you when anyone opens an account in your name or other changes take place in your credit history.
* Morningstar.com is the Web's top spot for analyzing mutual funds. In addition to telling you stuff you might not know about individual funds you own, its "Instant X-Ray" offers an insightful overview of your portfolio, showing how diversified you are by industry sector, investment style and types of individual stocks held in your mutual funds. The X-ray tool also shows how many stocks your funds own overseas and calculates the average price-to-earnings ratio of the stocks in all your funds and compares that to the S&P 500's P/E ratio.
* Multex.com and Zacks.com offer fundamental analysis for those brave souls still buying individual stocks. Zacks.com collects earnings estimates from Wall Street analysts and provides oft-quoted "consensus" views of where a company's profits are headed. (Yes, they're often biased, but estimates still play an influential role in setting stock prices.) Multex, meanwhile, offers tools showing how a company stacks up against competitors and the market. Go to the quote page, enter a ticker symbol and click "ratio comparison" to see all kinds of ratios -- price/earnings, price/sales, management efficiency, inventory turnover -- for any company, its industry and the market in which it trades.
* Financial planning and advice tools are among the fastest growing categories on the Web. Two leading providers are Financial Engines (www.financialengines.com) and Advice America (www.adviceamerica.com), both of which use computer-driven models to analyze portfolios. Many Web portals, brokerages and retirement funds use these tools under their own brand names.
Leslie Walker can be reached at email@example.com.