Carnival of Wealth, Fictional Girlfriend Edition


Our favorite line about this ridiculous story: "The last Punahou High School graduate with a made-up girlfriend ended up becoming President.Here's a picture of her. Yes, she's white.

Our favorite line about this ridiculous story:
“The last Punahou High School graduate with a made-up girlfriend ended up becoming President.”
Here’s a picture of her. Yes, she’s white.

Last week, we presented the Hawai’ians Are Ignorami Edition of the Carnival of Wealth. This week, one of Hawai’i’s most famous sons got caught creating (and abruptly murdering) an imaginary girlfriend. Which he followed up by telling doleful stories of “their” relationship, without mentioning nor offering nor being asked to offer photographic or any other kind of evidence of her existence. Yet any college football player, let alone a Heisman Trophy finalist, should be awash in vagina from the moment he sets foot on campus for his first recruiting visit. Assuming he wants to be, that is.

The only people dumber than Hawai’ians are journalists, and we’re not even talking about the ones who blindly and breathtakingly reported on the poor nonexistent woman’s demise. We’re talking about the ones who still, after the fact, ask questions like “Was Manti Te’o in on the hoax? Or was he an innocent dupe?” As if there could be any doubt.

So yeah, mildly closeted (or colossally bored) football player reinforces the stereotype we brought to your attention last week. Let’s see if any of this week’s Carnival of Wealth submissions are dumber than Manti Te’o:

Certainly not this first one from Will at Card Guys, who makes a bold but clear suggestion: spend with your credit card. Don’t freeze it in a block of ice, or give it to your golden retriever to bury in the back yard, or whatever else the leading personal finance blogging simpletons are telling you to do this week. Put as much as possible on your card. Why? Why not? You have to pay your mortgage or parking or grocery bill anyway, so why not earn some rewards for no incremental effort? Unless you like carrying fistfuls of cash and writing checks, in which case it’s 1955 and how are you reading this without a computer?

After a brief sojourn, Ken Faulkenberry at AAAMP Blog returns with a piece on Benjamin Graham. If you’re not familiar, the late Graham (he really did exist, there’s a death certificate and everything) was Warren Buffett’s investing mentor. Graham used a figment of his imagination, “Mr. Market”, as the protagonist in a parable about value investing. Graham never let the fiction go beyond that point, resisting the temptation to create a backstory that involved Mr. Market’s college or any fatal diseases. To quote Ken,

If every investor did their research and only bought stocks with a margin of safety below the intrinsic value of the company, the market would be efficient and fairly stable.

Of course it isn’t, and why? Because people typically invest with something other than their brains. Be aggressive when everyone else is pessimistic, and cautious when they’re optimistic, and you’ll probably come out ahead.

Suba Iyer of Wealth Informatics gets her drugs cheaply, and does so without claiming indigence nor being Canadian. Instead, she…well, if we told you you wouldn’t read her post. Also, her post features one of the few good comments in the history of the internet.

Andrew at 101 Centavos is so lucky – he gets to travel the world! (Just like some other people are lucky in that they get to build useless emergency funds and spend years paying off their credit card balances.) No, Andrew just prioritizes. This week, a dispatch from Malaysia and/or China. Want to live in one nation or the other, or somewhere in between? Andrew explains the reasons for and against.

At press time, only a handful of states don’t levy an income tax (you can be damn sure the CYC principals live in one). But with Washington, D.C. throwing stalemate on top of impasse and mixing in some gridlock for good measure, several states are looking at eliminating their income taxes and replacing them with (or increasing their extant) sales taxes. Bill Smith at explains which states are doing this and why.

Taxing consumption is better than taxing income. Every dollar of income has to be either spent or saved, so if you tax consumption, you’re encouraging people to save. When your nation has a negative savings rate, as the United States does, then an incentive to save (e.g. a sales tax) is practically a necessity.

“The back bacon fell off my cutlery and onto my runners, so I grabbed a serviette.”

Or translating into American,

“The Canadian bacon fell off my silverware and onto my sneakers, so I grabbed a napkin.”

Kyle at My University Money introduces another word from the Canadian lexicon, “residence”. Or as American college students call it, “the dorm”. Heck, even “university” is a Canadianism, used where regular folks say “college”. Schools on either side of the 49th have noticed that not only can they name their own prices for tuition, they can do the same with room and board. Kyle tells you how to avoid paying too much. (We’d recommend that you forget about a degree and go to trade school anyway, but what do we know about money?)

This is either a CoW rookie, or we haven’t been diligent in remembering who’s already submitted and who hasn’t. No, it must be the former. We would have remembered someone this good, as any guy who uses words like “emeriti” and “appurtenant” is alright by us.  Jason Hull at Hull Financial Planning explains what’s in store for the person who jumps off the wage treadmill and starts his own business. The first few weeks/months/maybe even longer will be a challenge, and even once you’re successful there’s still a temptation to never take a break, seeing as you become both financially and emotionally invested in a business that bears your name. Still, as far as we’re concerned that remains a better deal than working for the man.

It took a while, but new submitters are finally helping to shove the garbage submitters out the door. Michael at returns with an analysis of the estate tax exemption. Thanks to the laughably titled American Taxpayer Relief Act of 2012 (the roadblock hastily hammered a few inches from the “fiscal cliff”), you can hide up to $10½ million in estate taxes from the IRS, as long as you die and leave everything to your spouse. The exemption is indexed to inflation, too, something the brain trust behind the Alternative Minimum Tax never thought of. Long story short, Michael has determined that you probably no longer need a bypass tust. However, you still need a tax accountant, as the CYC Diagonal Tax ($x exemption, y% on the remainder, lock Congress in a room until they reach a consensus on what values those variables should take) has yet to be adopted.

Contrary to what you might think, Dividend Growth Investor doesn’t buy-and-hold-for-eternity. Even though he concentrates on stocks that provide a consistent income, he’ll still unload a dividend stock once in a while. For instance, if it cuts its dividend. See what his criteria are and why he replaced his Con Ed stock with that of a natural gas master limited partnership that you’ve probably never heard of.

Another rookie: some chick in Calgary homeschools her kids, because they have ADD and were getting bullied in regular school. “Bullying” used to mean physical violence, but these days it can mean someone failing to invite a classmate to an Earth Day party: no word on which kind of bullying is going on in the Calgary school system. Anyhow, she writes on Canadian Budget Binder about how she does it. The blog’s About page says that the site also features advice on coupons and frugal recipes, so don’t expect it to become a CoW regular.

Harry Campbell at Your PF Pro explains what “Restaurant Week” is, why it’s a waste of money, and whether you need to live in San Diego to understand what he’s talking about.

The magnificent Neal Frankle at Wealth Pilgrim can move effortlessly from nuts-and-bolts advice (he is a Certified Financial Planner™, after all) to more visceral, inspirational stuff. This week, he lists the reasons why it’s so hard for many people to make lasting financial change. One big culprit is data overload:

Make yourself a promise that you are going to spend no more than 1 hour a day for 2 weeks researching your problem.

Harder than it sounds.

Where’s the drivel this week? It’s one good post after another. PKamp3 at explains a heretofore unpublicized “benefit” to Obamacare (you know, that overarching law that swung on 3 votes in the House, ended up costing 42 Representatives who voted for it their jobs, and was upheld by a single vote in the Supreme Court.) Your Health Savings Account might only be valid until the end of the year, at which point the Department of Health and Human Services could indirectly render it obsolete. Meanwhile, we’re still trying to figure out how an individual’s health care – almost by definition, the most personal service in the world – became a public good in the first place.

Mich at Beating the Index is another prodigal returnee. The maven of the Canadian energy industry introduces us to Bonterra, a light oil producer that a) recently bought a competitor and b) not only pays a dividend, but has increased it in 4 consecutive years.

Last week Michael at Financial Ramblings explained how to get the best of both worlds by splitting your IRA contributions between a traditional and a Roth. This week, he tells you what to do when said Roth reaches its income limits.

Charles Davis at Wallet Hub is the rare academic who toils in the real world. He explains how if you’re shopping for a house, Federal Housing Administration loan requirements have changed. Changed, as in “tightened”. But if you have a modest net worth, an FHA loan is probably still your best method for getting into a home of your own and out of some landlord’s revenue column.

Over at Wallet Hub’s cousin, Wallet Blog, Lynn B. Johnson (not to be confused with the chick who writes that awful comic strip) gives us the kind of opening line that a only a seasoned CoW submitter can get away with:

My husband and I are typical of a lot of married Americans: we both have student loans and I lost my job last year.

But how can that be? A college education is a guaranteed path to an increased income! Everyone says so! Anyhow, Lynn B. managed to find a repayment program suitable for a jobless lady. She has 25 years to pay her loan off! In other words, most of a working career. Yup, a university degree (presumably in something other than the hard sciences.) There’s nothing like it.

Finally, from Liana Arnold at Card Hub (another cousin), details of the Dodd-Frank whistleblower program. If you catch your boss violating federal securities law, you can get up to 30% of any sanctions levied. (Note: Clean out your cubicle before trying this.) Or just don’t for someone else in the first place. See Jason Hull, above.

And just like that, it was over. Join us again Wednesday for a stunning new post (and tomorrow for the Anti-Tip of the Day.) Ciao. runs on the Genesis Framework

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