We read this week that 100 million Americans are on taxpayer-funded assistance of some sort. Even if you take away the personal finance bloggers, that still leaves 99-something million. Cool! A few more months and our work here at Control Your Cash will be done. All that stuff we write about building wealth and creating your own destiny? It’s all lies. Wait for a check from Washington instead.
(sigh) Laying off the sarcasm for a second or two, here’s the Carnival of Wealth. An anthology of personal finance blog posts of varying strength, presented for your reading pleasure every Monday morning, at least in most of the Western Hemisphere. Let’s get rocked:
Just one look at his confident demeanor and his freshly polished shoes, and you know that Neal Frankle was the kid in high school who had Monday morning’s homework done on Friday night. This week the estimable founder of Wealth Pilgrim was first to submit, so we’re letting him lead off the CoW. If you’re joining the masses and getting out of stock funds and into bond funds, a) Do you hate appreciation? and b) Neal points out that rising interest rates (which will have to happen, sooner or later) will destroy your bond fund and everything else you hold dear. If you want income from your investments, you need capital. Sounds obvious, but a lot of people unnecessarily handicap themselves out of the gate. Don’t be them.
Teacher Man posts at Young & Thrifty about the difference between mutual funds and hedge funds. To be brief, hedge funds aren’t for you. They require up-front costs that every reader of this blog either already knows about or can’t afford. With no overlap. Bonus: comment from a personal finance blogger with a hackneyed lament about how the rich get richer and the poor, etc., then admits that he doesn’t know the difference between the 2 types of fund. Not that you need to concern yourself with hedge funds anyway. Double bonus: Teacher Man calls himself a “bad Canadian” for preferring the National Football League to the Canadian Football League. You know, in the same way that any good South Korean prefers his TG Sambo AVERATEC N1200 to an Apple MacBook Air. Wow. How do you Canadians make it through the day without drowning in your own inferiority complex?
Speaking of mutual funds, specifically index funds, J.P. at Novel Investor reminds us that they aren’t all the same. Fees and portfolio turnover are two of the most important criteria in evaluating funds, and most people can’t be bothered to pay attention.
(Deathly boring post about how location is important when shopping for a house. Also, the writer called himself a “fist-time” [sic] homebuyer, which is wonderful.)
We already know that the Olympics are a giant money hole for London, as they’ll be for Sochi in 2014, Rio in 2016, and that South Korean city whose name we can’t be bothered to look up the spelling of in 2018. But one entity that’s benefitting from the global track meet is official credit card sponsor Visa. John Kiernan at CardHub gives us the details on which visitors to the Games are spending how much and on what.
Charles Davis at CardHub’s younger, attention-seeking sister WalletHub combines academic rigor (he’s a college professor, and not at DeVry either) with a deep knowledge of finance. This week he explains reverse mortgages, a way for an illiquid old person to confirm that yes, indeed, I made a lifetime of mediocre financial decisions and now must borrow against the equity in my house. Most of the private reverse mortgage companies got out of the business recently, leaving the market to the federal government. Just in case you thought there was a single aspect of American life that doesn’t deserve Washingtonian intervention.
From Odysseas Papadimitriou at Wallet Blog, a wonderfully rhetorical question: “Should We Be Worried About Corruption & Ineptitude With Student Financial Aid?” It seems that debit card issuers are charging college kids exorbitant fees for the most mundane of activities.
Hey, college kids: taking classes once you’ve graduated high school doesn’t designate you as smart. If you think someone’s taking advantage of you, and you never bothered to read an agreement that you signed and that authorizes your own impoverishment, maybe you should do something less intellectually demanding with your early 20s.
Speaking of college kids, both current and overgrown, here’s an example of what not to submit to the CoW if you want to be taken seriously. From Lance at Money Life & More,
Debt is no fun. I think everyone can agree with that! Before we get into our strategy of paying our debt down I feel like you need to know what our debt consists of. My girlfriend and I have over $100,000 in debt but honestly I’d say we’re pretty lucky.
We know you didn’t want a diatribe. That’s not what you come here for. Sorry, but you’re getting one.
That tears it, right there: “I feel like you need to know what our debt consists of.”
Stop treating your “personal finance” blog like group therapy. Unless it is group therapy, in which case keep it the hell away from the Carnival of Wealth. We’re trying to do something productive here. Introspection and related empty activities don’t help.
The submitter and his girlfriend are “over $100,000″ in debt. It’s actually $126,000, and maybe it’s that refusal to see a significant difference between $100,000 and $126,000 that caused their problems in the first place.
Guess what they owe money on? Of course, student loans. But it’s OK, because an education is not only priceless but translates into increased earning power. For proof of this, note the financial windfall it’s provided for Lance and his girlfriend.
We’re this close to cursing, something we try to avoid here at Control Your Cash. Look, if you want to keep a journal of your awful financial decisions, go crazy. Why do you have to share it with the world? Oh, that’s right, misery loves company; plus the inevitable comments telling you how great you are. Why trade in money when you can trade in compliments? Aren’t the latter more valuable?
Awesome job, Lance!
Further down the page:
I think it’s really sweet you are already planning to contribute to your GF’s student loan debt. Great post!
No, horrible post, but that’s beside the point.
It looks like you are doing pretty well.
Well, Lance and company aren’t $127,000 in debt, so there’s that.
I think you have a great plan for getting rid of the debts.
Very next comment:
it sounds like you’ve got it all under control.
They couldn’t have it less under control, but facts aren’t important here. Two more comments, consecutive:
Sounds like a good plan and good luck with it.
It sounds like you’ve got a pretty decent and well thought out plan here!
Never mind the stunning creativity from the commenters (and you wonder why we disabled comments on this site), does anyone want to point out the problem with the emperor’s (and empress’s) wardrobe? Wait, maybe one of the very next two commenters do:
I think it’s great that you’ve got a plan.
Sounds like you have a good plan.
Then, still further down the page:
I like your plan – sounds pretty good.
It looks like you have a plan that works for you and your GF. Good luck…it looks solid!
And about 20 more just like that. The worst part is that these comments all come from other personal finance bloggers. These people know that they have nothing to say, but think it’s important to leave comments to make incremental improvements in their PageRank.
By the way, this failsafe “plan” referenced ad nauseam above is to employ that ridiculous Dave Ramsey snowball method, debunked here. Yes, because a lifetime of financial indiscipline (which got you to -$126,000 in the first place) is going to reverse course immediately.
Here’s another quote:
my girlfriend is aggressively throwing every extra penny at her debt. She has a budget that allows for some fun money
If you’re going to contradict yourself, could you at least not do it in consecutive sentences?
Again: unleveraged debt is cancer. It infects neighboring cells if left untreated. The analogy is almost perfect. The commenters are patting Lance on the back (in between his own pats) for cutting back to 2 daily packs of low-tar cigarettes after getting a lung removed. His remaining fingernails are yellow, and he coughs up juicy black sputum every morning, but because he says he wants to get better, it’s all good.
Maybe, just maybe, the Stage III oncology subjects aren’t the people you should be listening to. Maybe – and this idea is just crazy enough to make sense – you should ignore everything they have to say, and instead listen to the folks who engage in regular aerobic exercise and keep their lungs nice and pink.
Then again, what do we know? If Control Your Cash ran a post similar to this week’s from Money, Life & More, it’d read something like:
Well, we’ve got a $1,176.23 balance on our American Express this month! We bought some things, and now we have to pay for them. Our debt payment plan is to write a check to American Express for $1,176.23 by the end of the month. Then we’ll have a balance of 0, and next month we’ll do it all again. Commenters, what do you think of our debt payment plan?
Alright, back to the non-horrible submissions. Last week we pondered whether prices will rise sharply, or not at all. PKamp3 at DQYDJ.net looks at the market (specifically, several yield curves) and has concluded that the value of a dollar will remain largely intact for the next 30 years. Amazing what you can do with an inquisitive mind and a little reasoning, isn’t it?
As a general rule, when pretty newscasters are reporting on commodity prices, any attempt to cash in has already ended. The CNN mouthpieces have recently taken to mentioning America’s impending corn crisis. Andrew at 101 Centavos says that if you wanted to speculate in corn, there are several logical reasons not to. Fun Fact: Did you know that 40% of the nation’s corn crop is legally required to be used for ethanol? Regardless of what other economic value it might have (or what havoc it plays with food prices?) FARMERS OF AMERICA, REPORT TO YOUR LOCAL POLITBURO REPRESENTATIVE FOR THIS SEASON’S QUOTAS. Пролетарии всех стран, соединяйтесь!
He didn’t submit it, but we found it and had to post it. Dave at 6400 Personal Finance strikes gold yet again with a piece on why you don’t have to patronize a company to own a piece of it. As usual, it’s difficult to choose one representative quote from Dave, but after much cogitation here’s our favorite:
Feelings are for stuff like relationships and rooting for the home team. They have no place in anything that has to do with managing your money.
Contrast that with the thousands of personal bloggers and lay people who use phrases like “stressed out”, “excited”, etc. when talking about money. Turn off the right hemisphere of your brain before doing anything financial. There should be zero emotional component to finances. The moment you add one, you’re losing.
Wait. Turns out Dave submitted a post after all. If anyone ever earned the right to have 2 posts in one edition of the CoW, it’s him. It’s an expansion on the sentiments raised in the previous post. Your feelings indeed don’t matter, and if you think they do, you should hand your money over to someone more objective than you and just collect a stipend.
Finally, this post was so awful we had to include it. From California bankruptcy attorney Susan Salehi at BK Help Now, an infomercial post that lists the 1,484 California towns that she does business in. It’s SEOtastic! Ms. Salehi is using not only an HTML template from 1996, but a headshot of similar vintage. Maybe next time she’ll learn to either not crop half her head out of the picture, or trade out the placeholder photo that comes with every new WordPress account.
And we’re done. Check us out on Investopedia, Yahoo! Finance and elsewhere. New blog posts every Wednesday and Friday, new Anti-Tip of the Day every day, new CoW Monday. Aloha.