Carnival of Wealth, Snow in Tucson Edition


Two things that should never go together - blizzards and Saguaro cacti

Two things that should never go together – blizzards and Saguaro cacti


Photo taken this past week at the Accenture Match Play Championships. In Marana, Arizona, which is essentially a suburb of Tucson. Today’s lesson: you can’t get close enough to the Equator. Good God. Now, let’s anthologize. We’re going to do these largely in reverse order of when they were received, and see if that makes a difference:

Instead of taking on a second job or making his own clothes out of discarded fabric swatches, the guy at Free Money Finance bought a couple of small apartment buildings. He paid cash, too, for some reason. Maybe his credit is awful. He’s also hired a property manager, but has threatened to save the 8% and manage the buildings himself. (Note to FMF: Don’t manage the buildings yourself.)

Jason at Hull Financial Planning opens with a quote from Bobby “The Brain” Heenan, and it just gets better from there. Seriously, Jason gives an ironclad answer to the question that’s probably crossed your mind once or twice: Why are those Nigerian scam emails so blatantly ridiculous? In other words, why don’t the scammers dial it down a little so they can get more responses? Jason not only answers the question, but explains how you can use the scammers’ tactics to your own (hopefully honest) advantage. Read this man, and read his archives. He’s that rarest of personal finance bloggers; a good one.

From “Bill Smith” at 2013 Taxes, how to maximize your return with TurboTax. See our archives for why maximizing your return is a dumb strategy. But yeah, if your income is relatively uncomplicated, TurboTax is the way to go.

The secretive Wayne at Off-Road Finance is back after a long hiatus. We’d barely seen him since his magnum opus hexalogy on the alternative to investing. He returns with a piece on the senselessness of the modern portfolio manager’s compensation – all upside, no downside. We need antibonuses to make the thing work. Wayne also cites the institutionalization that stands counter to the idea of dynamic capitalism. The most widely held bonds are widely held (and thus offer low yields)…well, because they’re widely held. Which could mean opportunity for you.

So you reproduced, and after hundreds of filthy diapers and high-decibel screams, you’re regretting your decision? Take heart. Emily Guy Birken at One Smart Dollar explains the newly permanent (to the extent that these things are ever permanent) child tax credit and how it works. With the ever-diminishing likelihood of our elected representatives making our tax system simple, you might as well take advantage of the unpublicized credits where they exist.

2nd mortgages, home equity loans, and home equity lines of credit are interchangeable, right? Wrong. Charles Davis at Wallet Hub explains the sometimes critical differences. Why can’t all college professors write as clearly and comprehensively as the Chuckster does?

John Kiernan at Card Hub continues his “Ask the Experts” series by grilling a few academics on whether it’s possible to learn financial literacy at a relatively advanced age.

it would take 4-to-5 times as long to teach foundational concepts to a 12 year old than it would to ingrain them at an early age

That’s so depressing. Turn off Max & Ruby and park your toddler in front of the Fox Business Network.

For those of you who don’t work in soul-crushing office environments, you can thank Peter J. Buscemi at FourQuadrant for reminding you what you’re missing. He drones on about how to create a marketing plan:

Communication of the plan is critical and needs to take many forms including written, verbal, email, prints, social, web and physical formats.  Summarize the plan for functional areas and management so it is clear who is to do what and when, make it part of regular communications and engage executive sponsorship.  The plan is a live document that will need to be dynamic and responsive to the needs of the business and that increases the need for a clear, consistent, bi-directional flow of information.

How do people get to this point? Peter J. presumably grew up in a regular household, populated by ordinary humans. When does someone go from speaking/writing in English to restating everything in whatever neutered and unreadable language the above is? Does it happen suddenly, or gradually? Worst of all, 5 sad people have shared Peter J.’s post on LinkedIn. One extremely lonely woman shared it on Pinterest, where it should at least stand out among the cupcake recipes and scrapbook photos.

Still insisting on going to college, huh? Good luck, you’ll go far with that anthropology degree. Kyle and Justin at My University Money wrote a book about how to handle your post-secondary finances, entitled More Money For Beer And Textbooks. If you’re Canadian, young, and like to drink and study, you should probably read it.

Pauline Paquin at Reach Financial Independence, already a seasoned real estate investor at the age of 30-something, found a way to live in a paid-for house, inexpensively.

  1. Build it yourself
  2. Do it in Guatemala.

Pauline and her boyfriend are living a more interesting and lucrative life than you are, most likely. They travel the world and own cattle. They also freed up money for their international investments by purchasing the Guatemalan house in a lump sum. Best of all, they have 90 acres to play with and develop. Think about that the next time you’re cursing your place of employment and/or the local weather.

The point is that you can do this. Enjoy freedom from a suffocating schedule, and live life on your own terms. It just takes a little foresight and confidence. You have at least one of those, right? Buy our book.

The only thing Pauline has in common with Control Your Cash Woman of the Year Paula Pant of Afford Anything is that they travel the world peripatetically, work on home improvement projects with their significant others, rely on real estate and investment income to finance their rich if not ostentatious lifestyles, aren’t afraid to get their hands dirty, haven’t destroyed their happiness by having kids, and are unfailingly self-reliant. Well, that and they have the same initials. This week Paula explains how even a sophisticated financial maven like herself can still be swayed by anchoring. A coupon that offers you 70% off isn’t as good a deal as saving 100% if you were never going to buy the discounted good in the first place.  Or as Paula puts it,

Frugality is just another form of consumerism: it keeps your focus on consumption.

…when it should be on production. If we had Paula’s skill at concision, this post would have ended hours ago.

Too many good posts, so it’s up to William at Quote Me A Price to even the scales. William and his company want to buy your structured settlement. That’s the opposite of investing. (For you, that is. Not for William.) Does this really count as a free ad for William’s company if we’re telling you to avoid his company like anthrax? Oh, it’s not like he reads the CoW anyway.

There is no data that PKamp3 and his band of engineers at can’t analyze, manipulate, and present in handy graphical form. This week, geometric average trailing returns for periods of 1 to 40 years, using postbellum S&P 500 data. We also learn that PKamp3 is writing at an effective 88 words per hour, but it’s about quality, not quantity. And quality he has.

Excuse us. We’re going to step away from the CoW for a minute to play chicken on the highway, shoot some heroin and have unprotected sex with Magic Johnson. Why? Why not? YOLO! Glen Craig at Free From Broke reminds us how idiotic that acronym and its pursuant philosophy are.

Andrew at 101 Centavos accompanied his wife to court (she was facing a quadruple homicide charge) and got to see how losers live. It’s amazing how many people will do dumb stuff (e.g. acting belligerently toward people who have the authority to make their lives miserable, to say nothing of drinking and driving) and then not figure out why they fall behind. If you’re that loser’s friend, then that makes you the French Vanilla in the ice-cream-and-dog-feces analogy. A morality tale in one act, albeit one with an unhappy ending for Mrs. 101 Centavos.

Don at My Dollar Plan points out that (artificially) low interest rates make life hard for lenders and people who rely on investment income for a living. Thus Don says you should load up on blue-chip stocks and short-term bonds.

Speaking of which, you know how many stocks have appreciated in each of the last 25 years? Effectively none. But stocks whose dividends have increased in each of the last 25 years are somewhat plentiful. Dividend Growth Investor tabulates them, and discovers with the benefit of hindsight that a basket of such would have returned 33% over the last 5 years while the S&P remained almost static.

When you hear a bond fund brag about x% returns, look closely. Its returns might really be – y%. Michael at Financial Ramblings explains the difference between SEC yield and distribution yield.

Finally, Michael at reminds us that it’s a woman’s world. Long-term care insurers are finally noticing that women live longer than men, and are thus selling women policies at discounts of 17% to 29% under what men pay. Add that to a lifetime of never having to buy their own drinks, and we wonder how women ever dare to complain that they’re treated as 2nd-class citizens.

We’re also on Investopedia. (That article’s from 11 months ago, but it holds up well. There’s more recent stuff on there, too.) New post here every Wednesday and Friday. New Anti-Tip of the Day, every day. See you tomorrow. runs on the Genesis Framework

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