It’s time for another edition of the only personal finance blog carnival whose hosts actually put some effort into it, the Carnival of Wealth. A weekly roundup of the least average blog posts in existence. Sit back and read. If you want to contribute a post of your own, all you have to do is have an established blog and enter here. Deadline is midnight Saturday. You can submit again once Monday’s carnival goes live. Submit twice or more and we reject all your submissions. Send something recent, like written in the last couple of weeks. Keep it on topic. And for the love of God, spell properly.
Today is the 137th anniversary of CYC’s home state’s admission to the Union. If the only parts of Nevada you’ve seen are Vegas and/or Reno/Tahoe, you’re missing nothing, and we mean that in a good way. Outside the only two metropolitan areas, the remaining 99% of the state averages fewer than 5 people per square mile. The whole world should be that sparsely populated.
Aside from the stuff you already know about, Nevada has no state income tax and liberal interpretations of freedom. The legislature only meets every other year, giving legislators only half as many chances to screw things up. Also, Nevada is in a 44-way tie for ugliest state flag. The only good ones are Alaska, Texas, Arizona, New Mexico, Colorado and maybe Hawai’i. Okay, on with the carnival:
He’s totally blandishing us, but who cares? PKamp3 at DQYDJ.net (it stands for “Don’t Quit Your Day Job”) bats leadoff this week. He read our recent post about students who borrow money they’ll never have the capacity for paying back, and wonders whether lenders should charge higher rates to students who choose less lucrative fields of study.
We hate to be the ones to tell you this, but a savings account is not an investment. Sooner or later you’re going to have to put your money into something that grows. If you’re young and have no clue where to start, Corey at 20s Finances has some sensible ideas.
Q: How much can I contribute to my 401(k) each year?
A: As much as I want.
Wrong. Unless what you want is to be probed and keel-hauled by the IRS. There are limits to everything in this life, except Sprint’s data plan and Ryan Seacrest’s vapidity. Roger White at 401(k) Calculator explains how much you can contribute this year and next while simultaneously keeping the taxman satisfied.
Speaking of the IRS, about the only time they’ll take “Later” for an answer is if it involves you giving them money. Mark Roberts at Tax Brackets explains how to avoid fines and imprisonment if you were smart enough to wait until the last second to pay your taxes, but dumb enough not to have any money on hand to do so.
Practical advice from Mike Holman at Money Smarts Blog this week. He argues that when you’re traveling abroad, Skype won’t necessarily save you money over going with your mobile provider’s long-distance plan. Mike got bitten with data roaming charges that tore at his inherently thrifty Canadian soul.*
Nathan Richardson at Complex Search writes about credit scores. We get the feeling Nathan was the kind of kid who had Monday morning’s homework done on Friday night. Look at the colorful charts and graphics in this post. A+. Gold star.
From Joe Morgan at Simple Debt Free Finance, a call to ignore annual percentage rate in favor of annual percentage yield. Oh, stop whining. Yes, there’s math in his post but nothing more complicated than exponentiation.
Suba at Wealth Informatics went slightly crazy but nevertheless entertaining this week, co-opting a nursery rhyme and turning it into a haunting parable about investing. See what adventures await in “the charming little town of Pigglesworth.” (Which is not, as it turns out, where that corpulent little Dixie Chick lives.)
Plan on traveling to the Central African Republic or Bhutan armed with nothing but your passport and your Discover card? Good luck with that. Marjorie Rochon at Card Hub explains what plastic you need to have handy before traveling internationally.
Odysseas Papadimitriou returns after his quick rapier job on usury laws last week. This week, Wallet Blog‘s resident wag follows it up by arguing that penalty rates for delinquent credit card holders should be tied to prime rate by law. (Ed. note- Pay your bills by the due date.)
Alright, this next submission deserves so much editorial comment that we should probably just stop right here and make a full-on blog post about it, but what the hey.
Newcomer Ben Demeter at Credit Card Assist thinks that credit card rewards steal from the poor and give to the rich. No offense, but newcomer Ben Demeter is out of his mind. This meandering post argues that rich cardholders benefit more from rewards programs than poor people do, which barely counts as an observation. He even makes this exceedingly tenuous logical reacharound:
A. Most retailers charge the same whether you pay with cash or a card.
B. Card issuers charge retailers a percentage point or two for every card transaction.
Therefore, C. Cash customers should pay slightly less.
Theoretically, there’s some truth in that. And in practice, some (but hardly all) retailers give cash discounts. It’d be an accounting nightmare for the rest. Having established his point, he continues:
D. Poor people who can’t get cards have to pay cash.
Therefore, E. The “rich” people who pay with cards are soaking the poor people who don’t.
The loaded and leading questions in this post are laughable:
Should we be rethinking our use of rewards cards? Is there a way to modify or improve rewards cards so that everyone benefits, including the poor? Or should we boycott rewards cards entirely because of their undue burden on the poor?
He phrased them as questions, so he must want answers. 1. No. 2. No, what would the point be? and 3. Yeah, good luck with that.
As we mention time and again in the book Control Your Cash: Making Money Make Sense, poor people are poor largely because they choose to be. If you think that’s an unfair and inaccurate generalization, ask the next person you see buying cigarettes and lottery tickets at the 7-Eleven to show you his bank statements.
Will from Former Banker is another newcomer this week; not just to the carnival, but to blogging itself. He’s shared with us his first-ever post (excluding his introductory one.) It’s a review of Gregory Zuckerman’s The Greatest Trade Ever, the story of John Paulson’s successful anticipation of the subprime housing collapse.
We hope Nerd Wallet buys Capital One something nice and shiny for its birthday this year. Or vice versa. This week the former’s mash note to the latter consists of Anisha talking about Capital One’s new Spark line of cards.
Another home run from Mike Piper. This week, The Oblivious Investor gives us Part II of his breakdown of index funds vs. exchange-traded funds.
Jeremy Vohwinkle at Generation X Finance says that if you have to ask if you can afford something, you can’t. We’re assuming he doesn’t mean that literally (your humble blogger bought an iPhone 4S only after running the numbers), but he does make a point: at the very least, do a little internal cost-benefit analysis before plunking down your credit card. Calculate, don’t justify.
There’s nothing like the obfuscating and capricious IRS rules to keep you focused. Madison at My Dollar Plan gives the lowdown on the new contribution limits for IRA holders, 401(k) holders, and even the very few of you who have SEP-IRAs and SIMPLE IRAs.
If you listen to Howard Stern, you’ve heard those suspicious commercials for Beezid in which an overworked voice actress says you can buy an iPad for 49¢. Is Beezid a scam? Uh…no! And neither is Social Security, for that matter. (Of course Beezid’s a scam. Well, unless you think you don’t mind paying for unsuccessful bids. Emily Guy Birken at PT Money explains how penny auction sites work.)
Okay, this is different. Kyle Taylor at The Penny Hoarder explains that you can purchase copyright shares of songs that someone else wrote. If someone who wrote a profitable song needs quick cash, he can sell his publishing rights (or part of the rights) to the highest bidder. He gets your lump sum, you get the royalties. So if Dolly Parton ever decides to unload her rights to “I Will Always Love You”, you could conceivably buy a piece of it and get royalties until the copyright expires (which, according to law, is 95 years after she does.) But Dolly didn’t become a mogul by selling her rights to people like you. So start off small and put in a bid for something like GG Allin’s “Live Fast Die Fast”.
Alright, we’re done. Leave a comment. See you next Monday.
*We don’t know about Mike, but as a rule they’re the worst non-European tippers on the planet.