Before we begin this week’s CoW, here’s the single stupidest thing any personal finance blogger has ever said, and given the hundreds of dumb personal finance blog posts written daily, that’s saying something. (Boldface in the original):
From a purely financial perspective, it’s never a good idea to sell a car. One could just keep repairing pieces of it as needed in perpetuity and, over the long run, you’re going to end up saving money.
Where do you even start rebutting that? The falsehood in the excerpt is obvious to everyone in the universe except the person who wrote it.
Oh yeah, him. His name is Trent Hamm and he writes The Simple Dollar, the most repetitive and inane personal finance blog in existence. It has 100,000 Feedburner subscribers. The title of this particular post is “Putting a Value on Reliability: When Is It Time to Trade In Your Car?” A reader unfamiliar with The Simple Dollar would assume that Mr. Hamm might give maybe a formula, or some sort of numerical benchmark, for keeping one’s car vs. getting a new one. Projected miles remaining vs. projected miles remaining in a new car, divided by (new car price minus Kelley Blue Book value of existing car), or something.
But such research and discovery is not what Trent does. This is what Trent does:
To me, it comes down to your gut. If it feels like it’s time to replace a car, then replace that car.
Sorry to ruin the climax for you, but that was it. Here’s another profound insight from earlier in this shipwreck of a post:
[A]s a car ages, the likelihood of a vital system failing grows. If the likelihood of a system failure is elevated, that means the car isn’t as reliable.
Wait, how do you figure?
Everything that comes out of this man’s keyboard is baseless, and often internally contradictory, drivel. His writing is beyond sloppy, his imagination is nonexistent, and his knack for repetition is without peer. Aside from that, awesome site.
Welcome to the Carnival of Wealth. Personal finance blog posts from all 7 continents, none of which blow anywhere near as much chimp as Trent Hamm’s best work. Let’s get started:
Pauline Paquin at Reach Financial Independence made her stunning debut in last week’s CoW, and returns this week to show us her fatalistic side. What if civilization as we know it crumbled? Can you barter and make fire? The people with the fireproof matches will hold untold power in such a world.
New submitter this week, Gary at Gajizmo, the first CoW entrant to feature the sequence “jizm” in its URL. Gary’s post is not bad, and not concise. 1600 words on whether you should pay your mortgage off early, the answer being “it depends on whether you could put the balance in an investment that pays more than your mortgage costs, taking into account the interest deduction you’d forgo.” (Details here, Chapter VII.)
Journalistically trained and perennially masochistic Miranda Marquit just can’t leave us alone. She returns at Card Guys this week, spreading herself even more thinly than we’d thought possible. She titled her post “Would You Rather: Spend Less Or Earn More?” Disregarding the unnecessary colon, isn’t the answer obvious? Even Trent Hamm would rather earn more, since there’s only so much you can subtract from expenses while revenue is essentially limitless. So we’ve answered her question without reading the post. Then we read the post, and wished we’d stopped at the title:
Consider a combination of cutting out the unimportant spending in your life and adding more income.
Is that what journalistic training does to the human brain? Good Lord. TWO SENTENCES LATER:
[C]oncentrate on boosting your income so that you don’t have to cut the things you really enjoy from your life.
Look. We like running Control Your Cash, we love having you folks read us every week, and sitting on a couch typing into a laptop beats the hell out of going to an office. Still, if we could return to a pre-internet world, where CYC didn’t exist but neither did the scores of awful bloggers pretending that they have something to say, we’d do so immediately.
How about a post that took longer than 4 seconds to write? With the benefit of hindsight, Darwin’s Money explains what would have happened over the last decade had you dollar-cost averaged your way into the market vs. making a lump-sum investment. He concludes that a lump-sum at the start of the decade would have returned more than annual and monthly dollar-cost averaging combined. And then starts the next sentence with, “If dollar cost averaging is something you’re interested in…” We’ve been scratching our heads on that one so hard that the skull is showing.
Nothing says “I don’t give a crap about your stupid carnival” quite like submitting a post from a site that still incorporates the default WordPress theme. So thanks, guy at My Journey to Financial Independence. His handy tips for what you need to do before investing include:
1. Make a budget and track your income and expenses
2. Establish an emergency fund
3. Tackle your debts
Miranda Marquit thinks that’s useless and repetitive. Also, we’re going to murder the next submitter who recommends starting an emergency fund. You’ve been warned.
Somebody good? Please? Odysseas Papadimitriou at Wallet Blog will work just fine. He introduces us to “dark pools”, the quasi-stock exchanges that operate in realms where the NYSE and NASDAQ fear to visit. Dark pools are operated by investment banks and brokerage houses, and they even have ominous names that sound like divisions of Blackwater – “Sigma X”, “Crossfinder”, etc. Still, they’re a place to go if you believe that regulation, and not its absence, was to blame for the financial crisis of 2008.
Ooh, even better. DQYDJ.net‘s programmer-in-residence, PKamp3, went to the trouble of creating a calculator that tells you what your T-bills return over any 10-year period since the Grant Administration. With coupon payments reinvested, no less. Would that every personal finance blogger cared this much about not just taking up space.
If Miranda Marquit is the CoW equivalent of a battered wife, continuing to come back for more abuse because she likes the attention, the Thompsons at Becoming Your Own Bank are an entire family of same. They treated us to their first YouTube video this week, which actually isn’t horrible until you remember what they’re hawking – whole life insurance, the worst financial good this side of betting red in roulette.
Another CoW rookie, and a promising one. Deirdre Morhet at BASC Expertise explains that April 15 isn’t the only tax deadline Americans need to concern themselves with. If you derive income from other sources, as we strongly encourage you to do, there are 4 other important dates on the tax calendar. One of which already passed, so good luck with that.
Modesty prevents us from naming the most outspoken personal finance site in existence, but Canajun Finances isn’t far behind. Big Cajun Man says that if you’re overwhelmed with debt, you should look at transferring your credit card balances, clip coupons, and adopt other meaningless gestures to reduce that load.
Just kidding. He thinks you’re an idiot and says as much. If you’re adding to your credit card balance by buying an expensive lunch, yet still taking vacations and leasing a new car every 2 years, you deserve to be in the red and stay there forever if the universe is just.
Jon at Novel Investor explains methods to weigh stock bundles. There’s the standard price weighing that you see in the Dow and other indices. Beyond that, there’s market cap weighing, fundamental weighing and more. Jon lists them all, complete with pros and cons for investing purposes.
Still going to college with no purpose and
paying borrowing tens of thousands of dollars for the privilege of deferring a finite life for a few more years? Well, you’re the boss. Lynn Johnson at Wallet Blog explains how to minimize your student loan debt. How? By letting the taxpayers bail you out! Now you can start from zero in your loser retail job that you never needed a B.A. for in the first place. U-S-A! U-S-A!
Carmen at My Best Car Insurance has more tripe for your reading displeasure, including:
[T]he age of a driver relates to their experience on the road and how responsibility (sic) they drive.
[A] good, clean driving record is one of the most important factors companies take into consideration when calculating pricing. Drivers with a driving history where there is no record of accidents, tickets, moving violations, or claims will get the cheapest pricing.
Would it kill you to try? There’s also an infographic that seems to claim that men are one-third more likely to get into accidents than women are, which conveniently ignores that men drive far more miles than women do. To paraphrase an anonymous Deadspin commenter, “Every time I see a woman driving a man, I assume either his license is suspended or he’s returning from LASIK surgery.”
Mike at Reward Cards Canada calculated which of 10 credit cards gives you the most cash back for fixed levels of gas and grocery purchases.
Kristen at My Dollar Plan tells you how much of your medical and dental insurance premia you can deduct from your taxes if you’re self-employed.
You still don’t know the difference between marginal and effective tax rates? You shouldn’t be allowed anywhere near money. Michael at Kitces.com explains the crucial difference.
Some of us (hi there!) pay undue attention to price/earnings ratios. Dividend Growth Investor reminds you to look beyond one-time incidences that can have a huge impact on P/E, and instead focus on years’ worth of data.
Andrew at 101 Centavos warns us that this is not one of his best posts, which means it’s still in the 95th percentile of CoW submissions. In the public sector, customer service and going the extra mile mean nothing.
State-mandated financial literacy programs are an unalloyed good, right? Maybe not, according to John Kiernan at CardHub. Half a dozen business school professors (big ones, too: Harvard, Penn et al.) say that they’re a waste of time. For one thing, information changes rapidly between learning it in a classroom (from a textbook that’s likely already obsolete) and being able to apply it in the real world. For another, if you have a proclivity for bad financial decisions, it’ll take more than mere education to get through your head. This is one of the most thought-provoking posts we’ve ever had the pleasure of hosting in the CoW.
We saved the best for last. Jason at Hull Financial Planning returns with the most convoluted explanation ever of how he came to sit through a screening of a crowdfunded movie. On the other hand, we find that he went to West Point. (Boy, it’s fascinating what you can glean when you read the submissions instead of just cutting and pasting like every other blog carnival does.) And then Jason takes off. In one of the longest submissions we’ve ever received, Jason takes us from his military career to his soul-sucking corporate career to his first entrepreneurial endeavor to where he is today. Jason explains that the ability to have options in your life – real options, not “Hmm…should I leave at 5:00, or stay another couple hours and hope the boss notices me?” are what separate the rich from the rest of us.
We’ll see you tomorrow. Thanks for coming.