We’re temporarily out of facetious ideas, so here’s the first Carnival of Wealth without a theme. To recap: personal finance blog posts from around the world. Details at BlogCarnivalHQ.com. Send us something good. If you don’t have anything good, spare our readers. Let’s get started:
Dividend Growth Investor is not going to buy AT&T stock. However, he will give us a handy description of what AT&T does:
AT&T Inc. (T), together with its subsidiaries, provides telecommunications services to consumers, businesses, and other providers worldwide.
Never say “people” when you can say “individuals”. It makes you sound so much smarter. Geoffrey at Financial Highway writes about exchange-traded funds this week, and stretches the piece out to extreme proportions.
THIS is how you do it. Todd Tresidder at Financial Mentor either read or is of a mind with our recent ProBlogger piece on how to create products inspired by a blog. Todd writes about Roth IRAs vs. conventional, and when you should convert. If you like what he says and take advantage of his free e-book, he’ll sell you other books for $37. (You have to read to the bottom of the page to read the price, but we thought we’d save you the trouble.)
It took Matt at Rambling Fever only 8 months to start recycling content. But in the first 7 lines he refers to this piece as “mandatory reading”, “required reading”, and “a must-read”, so it must be worth recycling. It’s about compound interest and how awesome it is.
We can’t goof on Mich at Beating the Index, because he’s ungoofonable. This week, the Canadian icon breaks down Parallel Energy Trust, which just increased its monthly dividend but is carrying debt equal to 25 months’ worth of cash flow.
If you can’t afford to pay for a college education out of pocket, finance it! It doesn’t matter if what you’re studying has no real-world applications. Who cares? College isn’t about money. Well, it still is on the tuition end, but that’s not your concern if a 3rd party is footing the bill. Paul at The Frugal Toad lists handy places where you can find state and federal grants. Because that federal grant money comes from a magic well in Washington. It’s not as if it’s confiscated from people who pay taxes. Kids, learn a valuable lesson about how paying for a service is less important than receiving that service. College tuition – a good with a completely inelastic demand. (You learn about that in economics class. Or in a textbook.)
It must be Monday, because someone (Steve Zussino at Canadian Personal Finance) submitted an article on how to create an emergency fund. You know, for emergencies and stuff.
Check that, the post is from “Cassie Howard…a stay at home mom living in Mississauga, Ontario. She writes daily on her website dedicated to frugal living. She’s what many would call an extreme couponer and saves a minimum of 50% off her grocery bill every week by using coupons.”
We don’t have time to visit Ms. Howard’s blog, which we’re sure is fascinating, original, and less dry than her bio. But the idea of telling people to create an emergency fund is ridiculous.
Who is she writing for? People who haven’t saved for a rainy day, obviously. But if those people haven’t been persuaded to invest yet, how can you persuade them to sock away money that’ll sit earning zero in a savings account? You can’t. This post wasn’t written to spur behavior, it was written to have something legible to run next to the coupon codes on that page.
People who set aside thousands for an emergency are the mirror image of those idiots who waited in line for hours to buy lottery tickets a couple of weeks ago. It shows a gross ignorance of probability.
If your house burns down, you have insurance. A similar thing is in place for your car, and your health. (Oh, health insurance is too expensive for you? It’s a lot easier to buy if you aren’t socking away money for an “emergency” fund with such an ill-defined purpose.) The number of actual financial “emergencies” that strike the average person are amazingly low. But again, emergency funds are easy to write about. So here we are.
Then there’s Teacher Man at My University Money, who has actual insight on actual topics, rather than “here’s a thought that crawled out of my head, let’s transfer it to WordPress.” He argues that Canada shouldn’t have lowered its national sales tax by 200 basis points. Teacher Man seems to think that raising the tax to its original level wouldn’t have an effect on quantity, but many of his other points are engaging and well worth the read.
Jill at My Dollar Plan explains tax exemptions (in the United States), and what will happen to them over the next couple of years.
Counterpart to that nonsense about an emergency fund, sort of: Boomer & Echo discuss what a waste it is to buy mortgage life insurance. Echo thinks you should buy term life insurance, which isn’t much better. But at least the lucky people who die after buying the latter don’t get screwed by insurers as often as their counterparts who bought the former.
It’s a rare financial blogger who catalogs his own mistakes. John Kiernan at Wallet Blog admits that he paid for months’ worth of unnecessary overdraft protection before realizing it. Folks, read your freaking statements. It’s not the bank’s fault if you don’t.
Jesus H. Did PKamp3 at DQYDJ.net seriously drop $60 on Mega Millions tickets? He rationalizes his choice – and keeping one’s wife happy is not unimportant – but try as he might he just couldn’t get the expected value of each ticket to fall over $1. (Nor did he discuss median prizes vis-a-vis mean prizes, but that’s a topic for another day.)
The magnificent Liana at CardHub continues to avail us of how poor people operate with a great piece on “payment allocation”, a term we’d never heard before (or at least, hadn’t heard before in reference to credit cards.) Long story short, if your card balance is split among purchases, balance transfers and cash advances, the outlays with the lowest interest rates get paid first. That’s how it used to be, anyway. Then the federal government reversed the order, because God forbid consumers be forced to, again, read agreements. Also, if you’re getting cash advances on your credit cards (and carrying balances long enough that you can transfer them to a different card), you’re either a) crazy or b) the parent of a hostage.
Pairs trading! Twice the risk! Twice the fun! Darwin’s Money shows us how if you’re bullish on one stock and bearish on its counterpart, you can go long on one while shorting the other and rub it in your more conservative friends’ faces twice as hard. The example he gives is Apple vs. Research in Motion, and we can’t think of an apter one.
We all have a hazy idea that our credit card and debit card issuers won’t put us on too big of a hook for fraudulent purchases, but do we know the details? Anisha Sekar of Nerd Wallet does, and went to the trouble of listing them for us.
And we’re done. Our ProBlogger series is now in its second week, you can’t go a day or two without seeing us on Investopedia, and we’ll have a new post here Wednesday (not to mention a new Anti-Tip every day.) ‘Til then.