Welcome back to the Carnival of Wealth, the only personal finance blog carnival worth reading. A Monday staple featuring blog posts from around the world. It used to be that most of the ones we received were awful and only a few were worth posting, but finally that ratio’s starting to even out. Not a moment too early, either. It’s a long one this time, so let’s get going:
Prospective submitters, here’s an example of the kind of post that you should only send us if you want to be chided.
“Adam Williams” of PF Success asks, somewhat rhetorically, if your family could survive with only 1 vehicle. What makes this post substandard?
- The author’s name. PF Success’s owner farms out the actual job of writing content – i.e. the site’s primary function – to a virtual assistant in India. The virtual assistant doesn’t want the readers to know that he’s hired help, so he overcompensates by coming up with an impossibly white-bread English handle. Guys, mix it up a little. Throw a Fratelli or an Andruszkewicz in there and we’d be more apt to get suckered in.
- It’s written for Martians.
There is a feeling of independence when one is able to get into their car, and go places as he or she pleases.
Anybody reading this not know what a car is, and what it does? If that’s you, we apologize. As for the writer, if you’re going to state the obvious, do it somewhere else.
- Bad punctuation, awful syntax (in “Adam Williams”‘s defense, he’s not a native English speaker), and pointless repetition:
As already stated, it is nice to take your car wherever you’d like
Sounds like a winner to us.
Lance at Money Life & More enjoys playing Polish Roulette (it’s like Russian Roulette, except with a pistol instead of a revolver.) (Polish jokes? Are those still a thing? Or are they a relic from a different decade where ethnic humor wasn’t relegated to the outskirts?)
This week he tells us how he made $400 by buying a $4300 air-conditioning unit. The $400 was a signup bonus for a new credit card. The issuer activated the bonus when Lance bought $3000 worth of stuff.
Alright, our initial comment was exaggeration to make a point. The card has a $95 annual fee, so hopefully Lance will be smart enough to cancel the card sometime in the next 51 weeks. Lance probably won’t get screwed, unlike most other cardholders. Why? Because he read the agreement. He didn’t wait a year and then write a post saying, “Can you believe Chase charged me $95 for carrying their stupid card? So unfair!” Reading the agreement is guaranteed to make your life 147% easier.
Somebody named Don is the latest contributor at My Dollar Plan, and this week he breaks down one of the few investments guaranteed to fight off the relentless erosion of inflation. Treasury Inflation-Protected Securities, as their name implies, issue returns fixed to changes in the Consumer Price Index. Which brings up another set of questions, starting with “Can you trust the federal government’s inflation figures?”
Dividend Growth Investor isn’t just going deep on dividend stocks in the period before retirement, he plans to continue doing so in his dotage. His strategy includes looking at companies with wide “moats”, sustainable dividends, and a couple more dividend-related criteria you’ll have to read to understand. Dividend Growth Investor continues with his explanatory descriptions of major corporations, which perhaps no one else finds funny but we always will:
McDonald’s Corporation (MCD), together with its subsidiaries, franchises and operates McDonald’s restaurants primarily in the United States, Europe, the Asia Pacific, the Middle East, and Africa.
We’ve reached Part III in W at Off Road Finance‘s tetralogy on The Alternative to Investing. Try to ignore his one mathematical error (1985 wasn’t 37 years ago) and concentrate on his big picture – market inefficiencies exist, and there’s nothing preventing you from being one of the people to exploit them. Except your own indiligence.
We love these kinds of posts, like this one from PKamp3 at DQYDJ.net, combining economics and psychology. He explains that the market will charge different people different prices for the same item, because it can.
This is freshman economics, the concept of utility. Say you walk into a gas station and buy a $1 bottle of water just because you need to use the bathroom and don’t want to feel guilty about doing so. Why’d you buy the water bottle, instead of something else? Probably because it was the cheapest thing you could find a) without bothering to check the price of every item in the store, while the clock ticks and your bladder expands, and b) that you’d end up consuming at some point anyway.
Would you be willing to pay $1.50 for the bottle? Maybe. $2? At that point you’d probably either look around for something cheaper, wonder if you could hold it in until you got home, or forget about decorum and just march into the bathroom anyway.
Now say you have a friend who’s just hiked through the Sonoran Desert in the middle of July. She gets to the trailhead, her water supply (and her) exhausted, and there’s a smiling man standing there operating a kiosk. Ice-cold Aquafina, $1. Last water for 50 miles. Does she buy it? Without hesitation. How much is the water worth to her? A lot more than it was to you. She’d gladly have paid $2. Heck, she might have paid $10. Because the water was worth so much to her, shouldn’t the seller charge her as much as possible (while still making the sale)? Especially if there’s another, fully hydrated passerby who’s thinking about buying the same bottle for $1?
That’s why there’s no such thing as gouging. If you don’t like the deal, don’t make it.
Here’s our Post of The Week Featuring Solid Advice That No One Will Follow. From Free Money Finance, how to write a résumé.
People love homogeneity. They don’t know how to stand out, and they’re not going to attempt to do so with something as potentially life-changing as a résumé. So they’ll repeat all the tired expressions (“was responsible for…”, “have excellent written and oral communications skills…”, etc.) Free Money Finance’s post is a book excerpt, but even the book gets it wrong. The authors encourage you to write lifeless nonsense like:
Developed a more customer-focused approach, providing outstanding service to a diverse clientele, resulting in a significant increase in customer retention, loyalty, and satisfaction.
Oh, for God’s sake. Find an employed person who says “Our approach isn’t really focused on our customers.” Or “The service I provided? Adequate, on most days. I wouldn’t go so far as to call it ‘outstanding’.” Or “Our clientele was perfectly uniform. I couldn’t tell any of our customers apart.”
You don’t have to polish what doesn’t warrant polishing, kids. If you worked the counter at The Gap, just say that and nothing more. Everyone knows what a store clerk does, and what a clothing store is. “Provided apparel services to male and female customers in a fast-paced retail environment” just makes you sound like a Mongoloid. A literate Mongoloid, but a Mongoloid nonetheless. No personnel director wants to read through that interminable garbage.
Now “supervised 4 people”, “handled payroll”, “was honored by corporate for highest increase in year-over-year sales in the entire 3200-store chain” are legitimate accomplishments. If you did them, mention them. If you were just working there to pay the bills, waiting for something better to come along while not collecting welfare, that’s fine. Say so. Well, don’t say so, but don’t turn your stopgap job into something it isn’t.
So we weren’t hallucinating when we saw the PayPal logo on the swipe terminal at Home Depot last week. Charles Davis at WalletHub tells us that if you register with Home Depot, or several other retailers, you can save yourself the trouble of using your credit card to pay. Just type in your phone number and your PIN instead.
Is that easier than using a credit card? We’re not sure. Especially since PayPal doesn’t offer rewards. File under features to be added soon, perhaps.
Fractional-reserve banking isn’t the only means by which lending institutions risk overextending themselves. Just ask John Kiernan at Wallet Blog, who introduces us to the ominous world of shadow banking. Hedge funds and money market funds are among the quasi-banks that differ from conventional lending institutions only in that the former don’t take deposits. But they’re more than happy to lend, without being subject to the same regulations as their less umbral counterparts. If every creditor comes knocking at once, the shadow banking industry could do what multiple investment banks did in 2008. Good times!
Dan at ETF Base has a talent for looking at cemented truths from unusual angles. He starts with an observation that most people haven’t heard articulated before – the majority of stock market returns are dividends. So maybe we should start from that point while investing. Dan introduces us to a new form of exchange-traded fund, one that takes the “Dogs of the Dow” concept and applies it to dividends.
If you’re an optimist, you could argue that the United States is enjoying a 91.8% employment rate. Except you’d be lying, because it’s really an 85.1% employment rate. Darwin’s Money uses the Bureau of Labor Statistics’ own numbers to show how utterly decimated the jobs market is. But yes, Mr. President, both houses of Congress, and the Federal Reserve, whatever you do, forget about applying the lessons of the Hayek/Friedman/Paul school of economists. Keep intervening instead. It’s never worked before, and always has the opposite of its intended effect, but this time it’ll be different. You know better.
From Liana Arnold at Card Hub, a list of the credit card issuers whom the Consumer Financial Protection Bureau received the most and least complaints (per capita) about. TD Bank finished 2nd from the bottom. Told you those Canadians were nothing but trouble.
Card Hub didn’t link to its data, but we did find out that a total of 530 people have complained about their credit card issuers in the last 6 weeks. Which almost seems low, given how many dumb people there are who look to a government agency to save them from a mistake that’s probably their fault. Of the complaints, 21% were billing disputes. Okay, fine. But the next biggest topic of complaint was interest rate.
Not knowing the details, we’re willing to bet that the card issuers are completely exculpable here. One more time: USAA can charge you 4,589,289,982,113.9% APR and you need not flinch. Pay your bill on time and interest rates don’t and shouldn’t matter. This is not complex.
you want the credit card with the most lucrative rewards or the longest 0% interest rate
We’d have put a comma after “rewards”, and replaced the subsequent phrase with “and that doesn’t charge a fee.”
Teacher Man posts at Young & Thrifty this week, imploring you to be ruthless regarding negotiable fees. Much like we implore you to let other people pay your way when they’re willing to (case in point, the previous post about credit card interest rates. Let the other idiots pay interest on their credit cards, while you take advantage of 30-days-same-as-cash terms and simultaneously build credit and earn rewards.)
Teacher Man gets it – the big picture, that is. If you can get the other party to pay hundreds of dollars in fees during a house sale, do it. Most home sellers (and buyers) are dumb enough to think of closing costs in terms relative to the size of the house sale, rather than as absolute costs. In other words, if you as the buyer stand your ground on not paying $1500 in closing costs, the seller might think, “Oh, what the hell. It’s a $250,000 house. I’ll cut him a break here, just to get the sale and close it quickly.”
But as Teacher Man reinforces, that’s still $1500. All for a few minutes’ work. It’s astonishing to think of the effort people will put into clipping coupons, or turning off lights when exiting a room, while refusing to go for the big fish like this. Even when it’s practically jumping into the boat.
We run posts from Mich at Beating the Index just about every week, which only a few of you read because its subject matter is so narrow. His coverage is great, but unless you’re passionate about energy exploration and its corresponding investments, you might shy away. This week, we implore you not to shy away. Mich explains it better than we can -
We are years away from seeing (electric vehicles) capture high market share because it still doesn’t make financial sense to buy an electric car for 1 reason: (return on investment)
Even under Mich’s conservative estimates, it’ll take 9 years for your Nissan Leaf or Honda Fit to pay for itself.
Read the article, but don’t read the comments. They’ll just make your head hurt. Like the one that said that if electric cars don’t make financial sense, neither do luxury cars.
A big, powerful engine gets you where you’re going quickly. Meanwhile a Smart Car loses to a motorcycle on every metric. The latter has a larger range, is more fuel-efficient, doesn’t require a lunky battery to dispose of, is easier to maintain, goes faster, is no more dangerous, and is infinitely more badass. Why Harley-Davidson and Kawasaki don’t point this out is anyone’s guess. Unless they’ve determined that a bike is far too much machine for the kind of person who’d even consider a dainty little hybrid. Makes sense.
Thanks for coming out. Fewer qualifiers and far more entertainment that any other personal finance blog carnival, and if you disagree you’re lying. We’ll see you Wednesday, and don’t forget to check us out on Yahoo! Finance, Investopedia, ProBlogger and anywhere else good that’ll take us. Sayonara.