2 political conventions in, and we’re collectively dumber. Let’s see if this week’s Carnival of Wealth doesn’t continue the trend. Again, personal finance blog posts from around the world, mostly the U.S. with a smattering of Canada. We start now:
Charles Davis at WalletHub says you need to take an inventory of your financial records, which is a capital idea. He also says you need to “consider” a safe deposit box, which is a 20th-century idea. Or a fire-safe box. A, we have these things called scanners now and 2, the next time we hear of someone saying, “I lost my house in a fire, but thank God my marriage license is still intact” will be the first. It’s almost easier to go down to the county office and request a copy than it is to buy a box and stick documents in it.
We shamed Ken Faulkenberry at AAAMP Blog back into submitting this week. Ken’s an investment planner, but hear him out. He stresses that much of managing a portfolio is not taking undue drawdowns from your clientele. That is, learn how to preserve your capital even when the market is in the toilet. Sounds easy in theory, yes. Ken explains the idea in considerably more detail.
We’re going to go with “Yes.” From Neal Frankle at Wealth Pilgrim:
you probably ask yourself, “When should I retire?” Is it simply a matter of finances? Or do you retire when you’ve “had enough” and are simple unwilling to take it anymore?
It starts with running the numbers. Well, that’s not true: it starts with knowing what numbers to run.
Thanks, I’ll just keep working until I collapse.
That’s the spirit! Neal cites the example of a rich nonagenarian he knows who still goes into the office every day. Maybe he loves working, or maybe his wife’s just difficult to spend time with.
From PKamp3 at DQYDJ.net (Don’t Quit Your Day Job), a recommendation to…sit and wait. Those dividend stocks you were all set to load up on? Their value is largely contingent on what will happen this November. Furthermore, dividends are subject to the absurdity of double taxation – they’re taxed at the corporate level, as profits, and taxable again when distributed to shareholders.
There’s a trickle-down effect here, too. Rich people, the ones who lots of dividend stock, will rearrange their purchases to combat taxes. Smaller shareholders, like it or not, will dance to larger shareholders’ tune. And it’s in 15/9 time, with a drummer who only knows 2s and 4s.
Counterpoint: Dividend Growth Investor. He recommends that you find a basket of stocks with a 3% dividend yield (easier said than done, but whatever), and enjoy fat dividend income 24 years from now. Reinvest the dividends, and you’ll be even further ahead.
Save money by being friendly? Free Money Finance has an anecdote that illustrates how being friendly isn’t just less strain on your liver, it’s good business. It saved $50 for no incremental effort on what would have been an ordinary transaction.
Save money by not being friendly? Dave at 6400 Personal Finance reminds you that you’re not the sales clerk’s pal, you’re his mark. Dave and his girlfriend went to Maui for the weekend (you can do that when you’re stationed on O’ahu), rented a car, and chose not to buy all the useless add-ons, saving them serious cash in the process. The kind of money it took Dave a few seconds to save, it would take Iowan heartthrob Trent Hamm a year’s worth of strategic toilet flushing to pull off.
Like ours, the brain of John at Wallet Blog has been saturated beyond recognition by endless political grandstanding and rhetoric the last few weeks. As a practical matter, John would like to know what will happen to mortgage tax relief under a Romney administration or under Obama Part II. As it stands now, people who failed to make their payments weren’t taxed on any financial break their lenders cut them. You know, because responsibility sucks on wheels. Should that tax relief run its course, plenty of people who lost their houses would get a tax bill for their troubles. This is justice, but to some folks it’s unfair.
From the running-out-of-adjectives-to-describe-how-awesome-she-is Liana Arnold at CardHub, another parable about unintended consequences.
To recap: not to be confused with the mortgage slackers above, a bunch of people didn’t like their credit card balances and decided to complain about them rather than pay them. The government intervened, forcing credit card issuers to cap rates and limiting how much they could charge in swipe fees.
YOU’RE NOT GOING TO BELIEVE THIS, but the people who run the credit card companies aren’t stupid. They didn’t throw up their hands and say, “Damn. The feds foiled us at our own game. Guess we’ll just make less money now.”
No, the responsible people got punished. Banks started raising fees on everyone, and slashing benefits left and right.
Alright, that was a rant only barely related to Liana’s post. Today, she cites the prospect of merchants charging fees for customers wanting to pay with credit cards. It’d be the ultimate result of a settlement that derived from a class-action suit filed by merchants who claimed that Amex, VISA et al. overcharged them by billions of dollars.
Harry at Your PF Pro has some interesting ideas and could use an editor. Harry thinks you should diversify by country of origin. A 70-30 mutual fund balance (international and U.S., respectively) should make your holdings as stable as possible, assuming you’re locked into mutual funds. Of course, “international” covers a lot of ground, so to speak: there’s a difference between investing in Canadian companies and in Burundian ones.
One more on dividend investing and then we’re done. Dave Scott at Excess Return joins the CoW this week with his methods for evaluating and selecting dividend stocks. While we’re not sold on the importance of dividend yield to the extent that Dave is, this article is tremendously well-written, perfectly formatted, and contains a pretty chart.
Alright, one more. The comprehensive Andrew at 101 Centavos breaks down the 2 publicly traded firearm manufacturers: Sturm, Ruger and Smith & Wesson. (That’s a company called Sturm, Ruger and another called Smith & Wesson: not a company called Sturm and another called Ruger and Smith & Wesson. Companies with commas in their names are reprehensible.) Andrew’s post gives credence to our observation that the better and more thought-provoking a post is, the fewer comments it inspires. Andrew is a Ruger shareholder (unlike us, mere Ruger customers) and illustrates the stark difference between the companies’ management styles. Also, for you ladies looking to be stereotyped, a mention of how “pink guns are becoming more commonplace.”
We kind of miss the bad submissions. This week’s were impossible to make fun of. Well, there’s always next week.
Wait. One more. Serial submitter and avowed masochist Lance at Money, Life & More maxed out his Roth IRA.
Oh, did we mention we’re on Investopedia? Yahoo! Finance, too, once in a while. New blog posts here every Wednesday and Friday, new CoW every Monday. Anti-Tips every day. See you tomorrow.