Author: Jenny Smedra

Can You Spend Money That a Bank Mistakenly Deposited?

Can You Spend Money That a Bank Mistakenly Deposited?

During my freshman year of college, I faced an ethical dilemma that has led to many interesting debates. When I checked my account balance, I noticed a credit of $1,000. As bank errors go, this one was relatively small. But to a poor college kid who only expected to see $100 in the account, this was like hitting the jackpot. I knew the bank had mistakenly deposited the money. However, when I tried to do the right thing, the teller assured me there was no mistake. So at this point, would the money be yours to spend?

What Happens if a Bank Mistakenly Deposited Money in Your Account?

Mistakes are a part of life. People aren’t perfect and technology can create errors. But what should you do when the bank makes an error in your favor?

Noticing the Error

In all honesty, my first thought was “Free money!” At that time in my life, I was working 40 hours a week and going to school full-time. So, it could have gone a long way toward improving my quality of life. But deep down, I knew it wasn’t mine to keep. And if I tried, I would probably get caught.

To this day, I’m still not sure if it was an accounting error or a simple mistake on the teller’s part. Although it was tempting to keep it, you should report these errors as soon as you notice them. Unfortunately, this isn’t one of those instances where the “finders, keepers” rule applies. Even if the bank insists there was no mistake, don’t spend the money because it will come to collect it eventually.

Better to Be Safe Than Sorry

Sure, there are times people spend the funds and get away with it. But more often than not, you will have to pay it back if a bank mistakenly deposits money and you use it.

It doesn’t usually take long for someone to notice the money is missing from their account. When they do, the person will contact the bank immediately to fix the error. Even when no one reports the errors, financial institutions conduct audits to catch mistakes just like this. And if someone notices the extra money in the account, they don’t need permission to remove the funds. So if you already spent it, you could find yourself in hot water.

What Are the Penalties if You Try to Keep It?

As you would expect, there will be penalties if you try to keep money that isn’t yours. For one couple, it led to criminal charges. So, it’s best to assume the bank will realize they have mistakenly deposited money into your account and will reverse the transaction.

However, this could create a serious problem if the money isn’t there. It could send your account into the red, leading to overdraft and late fees. And if it happens repeatedly, it will also affect your credit score.

Furthermore, the bank will conduct an investigation. If they discover the missing funds, they can freeze your accounts or even file a police report. Not only will you be ordered to repay the money, but it could also include criminal charges. Depending on the amount, you could face charges for theft, property loss, or receiving stolen property, all of which carry heavy fines or jail time. The penalties will be even harsher if you attempt to close the account, transfer it to another account, invest it, or gift it to family and friends.

What Should You Do If a Bank Mistakenly Deposits Money?

So, what should you do if this happens?

  • Don’t spend any of it. If money appears in your account and you don’t know where it came from, don’t touch it. Don’t spend it, don’t transfer it, don’t give it away…just let it sit in the account. Tampering with the funds could have huge consequences.
  • Report it immediately. The next step is to notify someone immediately. Try to include important details about when you noticed the error. It’s also wise to take down the name, time, and date of when you contacted the bank. Make sure you keep records of all communication on the issue in case anyone has follow-up questions.
  • Wait for the results of the investigation. When they find the mistake, the bank will conduct an investigation to determine the origin of the funds. They must establish that it was a mistake, not an unexpected gift from someone. Afterward, they will reverse the transaction. Banks usually respond within 10 days, but longer investigations can take up to 6 weeks. If you have questions about the process, you can find more details about the timelines in your account agreement.
  • Follow-up for results. Some banks are better at communication than others. If you haven’t heard back from your bank within 45 days, contact them for a progress update.
  • Monitor your accounts. The fact that mistakes like this happen is a good reason to regularly review your finances. Therefore, I make it a habit to monitor my accounts. I use a combination of credit reports, online banking, and account notifications to keep tabs on my finances. On more than one occasion, it has helped me spot accounting errors and fraudulent activity as soon as they happen.

Food for Thought

Mistakes happen, both as a result of human and technological errors. But, life has a way of correcting mistakes.

There is always a chance that you will get away with keeping the money. But even if you find a legal loophole that allows you to keep it, there is a difference between legality and morality. These hypothetical situations should make you think twice about what you would do, especially if the situation is reversed. In my experience, what goes around comes around. And if I were the one with the missing funds, I hope that whoever received the money would take actions to correct the mistake.

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Making a Career and Life of Travel

Making a Career and Life of Travel

People have always asked why I felt such a strong urge to travel. The truth is that I caught the travel bug when I was only a teenager. I knew I wanted to find a way to build a career and a life of travel. While I tried to ignore it and choose a stable career path, I was never happy or fulfilled. If you are facing a similar dilemma, here’s how I found a compromise between my head and my heart that didn’t leave my bank accounts empty.

Making All the “Right” Choices

I come from a lower-middle-class working family. My parents worked hard to provide for us. And, they believed that a college education was the key to a bright future. Although this was true for me, they didn’t realize that it would open up more than a successful career path. College presented me with a whole new world of opportunities and reignited my desire to travel.

When I shared my excitement to study abroad, they would dampen my enthusiasm. With the best of intentions, they would try to direct me toward careers with better job prospects and salaries. However, I was stubborn. And, I had big dreams of exploring the world and experiencing other cultures. Yet enough of their concerns over the cost of travel helped convinced me that I needed to be more “realistic” with my plans.

As a compromise, I pursued dual degrees in history and education. I thought I could be happy teaching what I love and enjoy greater job security. But by the final semester of my senior year, I knew it was a mistake. I went to my advisor to share my sudden change of heart, and it led to one of the most honest conversations I have ever had about what I wanted for my future. It opened my eyes to the fact that I didn’t need to settle for a life I didn’t want. But most importantly, it showed me that there are several lucrative ways to build a career and life of travel

Looking for a Better Way

That day forever changed the course of my life. I realized that I didn’t need to define myself by other people’s standards of success. I also understood that it was possible to have the lifestyle I wanted and still find a way to support myself.

So, my next step was a big one that led me to study abroad. After graduation, I started a post-graduate degree in another country and pursued a degree in anthropology. This took me out of the work culture of corporate America and exposed me to an entirely different worldview. There were all types of new job opportunities. And since I was already familiar with the student visa process, it was a relatively easy transition into a professional career abroad.

When I finished my degree, I realized the only path to career advancement in my concentration was through academia. Although I have a passion for education, the world of academia is highly competitive, even cutthroat at times, and that’s just not me. Plus, I didn’t want to spend my life applying for grants and being under the thumb of benefactors.

However, anthropology is a broad field. And I met other people who showed me better ways to build a career and life around travel.

3 Ways to Support a Career and Life of Travel

After living abroad for more than 10 years, here are three ways that I have successfully found employment and supported myself overseas.

1. Pursue higher education.

Even though my parents and I had different expectations of my college education, it was an important step in my career path. And it led me to where I am now. Choosing to study abroad and pursue higher education opened doors that I never knew existed. And no matter how you look at it, I earned a master’s degree which has helped my job prospects.

But being in-country gave me the chance to network and get hands-on experience that would have been impossible back home. I also discovered that many several professional internships with multinational organizations can help you get your foot in the door. With the right training, credentials, and contacts, you can land a great job and build a very satisfying life as an ex-pat.

2. Look for online opportunities.

Although I left academia behind, I wasn’t ready to give up on my dreams. So, I used my skills and went online to look for new employment options. I soon learned that tons of online opportunities will allow you to work from anywhere. And, there are even more remote gigs post-Covid.

During my travels, I’ve worked as a freelance writer, copy editor, transcriptionist, translator, and tutor through several online platforms. However, there is also a huge demand for graphic and web designers and many other digital skill sets. If you have marketable skills that only require a computer and internet access, you can live comfortably as a digital nomad.

3. Find a position teaching ESL.

As ironic as it seems, my professional journey overseas ended right back where I started. For the majority of my years abroad, I settled into a teaching career. Native English speakers are in high demand as other countries want to become more competitive in the American and international markets. As long as you have a bachelor’s degree, many schools and companies are willing to compensate you well for your services.

I spent 8 years teaching ESL because it provided a great salary, benefits, travel allowances, and housing. And, I had nearly two months off every year to travel. By the end of it, I had earned enough to pay off all my debts, fund my travels, and save enough to start investing. It was one of the most financially and personally rewarding experiences I’ve had.

Those who are interested should look at one of the many online forums where you can browse offers to live and teach abroad. If the idea of being bound to one place doesn’t appeal to you though, you now have the option to teach online which will allow you even greater freedom of movement.

Final Thoughts

When the end finally comes, many people regret not traveling more or settling for a life they didn’t want. However, I don’t want to be counted among them. So, I have actively sought out a different path.

Although I did it while I was young and unattached, I have seen people at every stage of life successfully build a career and life of travel. Whether you are moving out for the first time, traveling with children, or retiring abroad, it is possible. However, if you want it, then you have to go out and make it happen.

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10 Pros and Cons of Investing in Collectibles

What are the Pros and Cons of Investing in Art?

The collectibles market has grown in popularity in recent years. Although many people already have them in their portfolios, alternative investments tend to rise when the stock market isn’t performing well. Unfortunately, some investors make the mistake of thinking they can dive in without a plan and turn a profit right away. However, the key to collectibles is recognizing what makes them valuable. So if you are thinking about buying alternative assets, you should consider these 10 pros and cons of investing in collectibles before making any large purchases.

What’s Considered a Collectible?

The term collectible includes a wide variety of items whose value is more than the original purchase price. However, when it comes to investing, the most common types include wine, art, cars, antiques, jewelry, watches, coins, books, stamps, baseball cards, toys, and comic books, to name a few.

These items appreciate for many reasons. For example, an item may become more valuable due to its age, condition, rarity, or appeal. You have probably read about some collectibles selling for millions of dollars. Although not all hold this much value, unique items can fetch a high price at auction.

Many investors choose alternative investments like collectibles because it offers high returns and greater balance within their portfolios. But be warned, it could take years to see any profit. Therefore, investing in collectibles isn’t the most practical strategy for every investor.

10 Pros and Cons of Investing in Collectibles

Before investing a large amount of money in collectibles, you should consider these pros and cons and weigh them against your current investment strategy.

The Profitable Side of Investing in Collectibles

1. Collectibles can become valuable assets.

Without a doubt, the right collectible will bring significant gains. Although there is high variability depending on which type of collectibles you focus on, there are certain types that tend to perform better than the stock market.

For example, when you look at the period from 1995-2021, contemporary art performed extremely well. The S&P 500 had an average return of 7.89%, which came to 10.48% with dividends. Meanwhile, contemporary art had a return of 13.8% over the same span of time. With results like this, it’s no wonder why collectibles have become an attractive investment.

On the other hand, there are no guarantees. But, getting expert advice and professional assistance can help you find quality pieces that will match or outperform the markets.

2. There is potential for huge returns.

We have all read the stories of people who discovered heirlooms that have been long forgotten or came across valuable items in local thrift shops and yard sales. Although it rarely happens, there is the potential of discovering something valuable that others have overlooked. And, there is always the slight chance of identifying collectibles that will become huge returns in the years to come.

While it is a one-in-a-million chance, these things can happen. And those who are extremely lucky may end up with something truly priceless.

3. It adds more diversification to your portfolio.

Any financial advisor will tell you that diversification is an important method to mitigate risks and protect your assets against stock market fluctuations. Index funds already have this built-in. But, it’s wise to have assets that aren’t correlated to the stock market. Collectibles are one way to create greater diversity and a more balanced investment strategy. And, they ensure you don’t put all your proverbial eggs in the same basket.

4. Collectibles can be passed on as generational wealth.

Unfortunately, many collectors don’t collect on the financial gains from their investment. Instead, they use it to create generational wealth that they can pass on. If their family chooses to keep the asset, it allows for further appreciation and even greater gains. Adding collectibles to your portfolio can give you and your family more resources and options.

5. It can fulfill a passion.

If you decided to start investing in collectibles, then you should choose something that you already have an interest in. Serious collectors spend years researching, networking, and learning about anything related to their collectibles. The most successful people usually choose a specific niche or passion they are already familiar with. Not only can it bring great personal satisfaction, but also financial returns.

…and the Risks

1. It’s a volatile market with several factors affecting value.

On the other side, investing in collectibles comes with significant risks. First off, it can be a very unpredictable, even volatile market. Demands can quickly change and items that once held valuable can depreciate overnight.

Furthermore, it’s a highly subjective market. Since there is no standardized valuation or index like there are with stocks and bonds, their value is difficult to gauge. Although we have access to more resources to compare items and prices, some pieces are one of a kind. Expert appraisals can give you an estimated value. But ultimately, collectibles are worth what people are willing to pay.

2. Quality items cost money.

Although we read about it often enough, people rarely find old junk and then turn around and sell it for millions. This isn’t how collectibles work. Most people know the value of what they have.

To earn a profit, you have to know the market and invest in quality items. Then, there are the additional costs for handling, storage, and insurance. But when it comes to the quality of collectibles, you get what you pay for.

3. There is always the potential for counterfeits.

Counterfeits and forgeries are inherent risks with collectibles. No matter what you are dealing with, you will always have opportunists who try to take advantage of the naive.

Even to a trained eye, the work of some of the most skillful con artists is difficult to distinguish from the original pieces. If you decide to delve into collectibles, always ask for authentication and go through reputable dealers so you don’t waste your time and money.

4. Collectibles come with a heavy tax burden.

Another thing that investors often forget is the tax burden that comes with collecting. When you add them to your portfolio, spend some time familiarizing yourself with the tax laws for collectibles. Depending on how long you own them, you may have to pay up to 28% in capital gains tax when you sell them.

5. They may never bring a return on your investment.

With most collectibles, getting a good return on your investment takes time. It may be decades before a collectible appreciates in value. In the meantime, if the items are damaged or destroyed, you may never see the profit. Additionally, some items will never be worth much more than you paid for them. So be warned, it may be a gamble that never pays off.

The Takeaways of Investing in Collectibles

Many investors have successfully built valuable collections. However, the fact that collectibles aren’t tied to the stock market is a double-edged sword. When you look at the numbers, collectibles tend to perform better than the stock market over time, but you have to wait for the return.

While there are both pros and cons of investing in collectibles, it isn’t for everyone. It’s better suited to long-term investment strategies. Like any investment opportunity, it will always carry risks. But without the risk, there is no reward.

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