Archives for PF Spotlight category
28
Apr
Posted in PF Spotlight by Roger, the Amateur Financier |
If you’ve done much reading in the personal finance sphere, you have likely encountered some bad advice. Not overly broad generalizations, nor excessively optimistic or pessimistic scenarios designed to support the writer’s point, nor even serious debates on the best course of action (as with many of the great financial debates), but simply bad advice. The kind that, if followed, will leave you poorer and in worse financial shape than you would be otherwise.
Enter Frank Curmudgeon. The writer of the Bad Money Advice blog focuses on identifying and correcting bad advice from other personal finance commentators, ranging from published authors like Suze Orman and Dave Ramsey down to other personal finance bloggers. And he’s well qualified to do it: an unemployed hedge fund manager, he’s had more financial education than ten average PF bloggers combined. And he’s not afraid to tear their arguments apart, either. (With any luck, I’ll be able to avoid being on the wrong end of his analyzes in the future…)
Some of the interesting posts he’s written in the last few weeks:
The Bad Money Advice Financial Literacy Quiz – I have to say, I do love financial knowledge quizzes. Frank has a good one here, covering everything from FDIC insurance to credit card fraud liability. I’m not terribly happy about my score (13 out of 20), but I’m glad to learn some new things (and I am reminded that I need to do plenty of research before I post anything in my blog).
How to Create your own Target Date Fund – A guest post over on Get Rich Slowly which discusses the cons of target date funds and how you can go about creating your own. He raises some good points, some of which I noted earlier today (amazing how these things sync up), about how target date funds tend to be one-size-fits-all and not necessarily appropriate for your particular situation. I think he overstates the possible dishonesty in the funds, though; given the level of disclosure required by the companies, the opportunity for shenanigans is rather low.
Secured and Unsecured Debt – Frank notes the problems with the common wisdom of not taking out a Home Equity Line Of Credit (HELOC) to pay off unsecured debt like credit cards. Doing so means that you can lose your home if you can’t pay back the debt (at least in theory), but Frank shows how this is much less likely than popularly believed. Basically, you are trading higher priority to claim your money if you end up insolvent, in exchange for a lower interest rate; in many cases, such a trade ends up benefiting the debtor.
Are 401(k)s a Bad Idea? – Frank notes the complaints that 60 minutes levels against 401(k)s. The main argument against the plans by 60 Minutes is the recent losses in the stock market show that these plans are not good replacements for defined benefit plans. However, Frank notes that widespread use of 401(k)s isn’t the source of our current problems, and that the older style, defined benefit pension plans had problems of their own (including not being that widely available).
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21
Apr
Posted in PF Spotlight by Roger, the Amateur Financier |
Once again, it’s time to look into another PF blogger here on The Amateur Financier. This time, it’s going to be Kevin of No Debt Plan. He only recently came to my attention, although he’s been writing since January 2008 and is rather more established than me.
One of the features he does that I really like are his Subscriber Swap Saturdays. He interviews another personal finance blogger, he gets interviewed in return, and then each interview gets posted on the respective blogger’s site. I actually started to follow his site after I read Stephanie’s interview with him on Poorer Than You. Who knows, perhaps after I’ve built up this humble little blog a bit more, you might just see an interview with me posted on his site.
(I also realize that my own PF Spotlight posts sound more than a little bit like a poor man’s version of his Subscriber Swap Saturdays. After all, both are special posts that focus on other bloggers, are published once a week, and hopefully lead our readers to other PF blogs. (And, if we happen to gain a few more readers ourselves in the bargain, all the better.) I didn’t discover Kevin’s blog until well after I started these posts, though, so I’m going to plead innocent to any idea napping in this case.)
Some of the interesting posts Kevin has added this past week include:
Does Unemployment Income Change How Much You Save for an Emergency? – Kevin raised the issue of what effect, if any, the existence of potential unemployment benefits should change the amount you put aside for emergencies. He suggested that you shouldn’t decrease your emergency fund on the expectation of unemployment income. I respectfully disagree (and said as much on his entry); if you have the reasonable expectation of receiving unemployment, that’s a factor that should affect your emergency fund size, just as with any other financial factor.
How Much More Money Do You Need to Make Up for Being Unemployed? – Another unemployment question, which naturally has appeal to me in my current situation. Kevin calculated how much the insistence on making the same salary you previously made can cost you, and how much more you need to earn to compensate for that loss. It’s amazing how much the refusal to take even a small pay cut can end up costing you.
Are You Willing to Sacrifice to Succeed? – A simple, but very powerful, message: success takes sacrifice. The greater the goal and the longer the path to reach it, the more you need to be willing to make sacrifices in order to achieve your goals. It’s rather obvious, but far too many people seem to think there must be some magic work around to get all the benefits without the work.
There you have it, some of the interesting posts from the No Debt Plan blog this week. Read and enjoy.
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14
Apr
Posted in PF Spotlight by Roger, the Amateur Financier |
It’s that time again, boys and girls, when I put a spotlight on one of my fellow personal finance bloggers to show off some of the other fine writing in this field. After all, man cannot live by bread alone, and I hardly expect that you, my readers, will only be following my blog. This week, we’re going to look at ToughMoneyLove.
If you’re unfamilar with the site (and it is fairly new, although not nearly as new as mine), you should be aware that Mr. ToughMoneyLove is rather blunt. He has numerous opinions, and isn’t afraid to share them. Roll those characteristics together, and you get a blog that reminds me of talking to a gruff uncle. He’ll tell you when you’re being an idiot, and won’t pull any punches when he does so, but if you listen to what he’s saying, you’ll be much wiser for it.
And speaking of words of wisdom, here are some of the highlights from the last week of his blog:
Measuring and Wasting Financial IQ – A good post, detailing what many of us already should understand: you can know a great deal about personal finance, but if you don’t apply that knowledge, you are as doomed to financial failure as someone with no financial education. As Mr. ToughMoneyLove notes, it’s behavior that determines how successfully we will be financially. Financial knowledge, while important, just isn’t enough.
Quarterly Investment and Net Worth Review – I thought this was pretty interesting, and not just because I have been doing the same thing (albeit, on a weekly schedule). Mr. and Mrs. ToughMoneyLove kept their losses to a minimum in the continued market downturn with some healthy investments in inflation protected government securities, including TIPS and I-Bonds. Given the current economic climate, it seems to have served them well.
Consumer Credit Counseling and the Law – In one of the rare shows of good sense on the part of state governments, there is a law that has been passed in several states called the Uniform Debt Management Service Act (or UDMSA). The UDMSA sets up regulations as to what credit counseling services can and cannot do, most of which will go far in protecting the credit counselees. I only wish that Pennsylvania would snap to it and pass the UDMSA here.
My Life as a Volunteer Tax Preparer – Week 10 – Mr. ToughMoneyLove has been volunteering for the past few months to help prepare taxes, and has gotten several interesting stories out of the deal. This week was a bit slow, although with taxes being due incredibly soon, the next (and final) column on this subject should be very interesting.
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5
Apr
Posted in PF Spotlight by Roger, the Amateur Financier |
When I was tagged earlier this week to share 7 things about myself, I received a comment from The Weakonomist. He was the one who had tagged My Life ROI, and thus is indirectly to blame for me writing that column. Or, if you prefer, he deserves the credit for inspiring me.
I decided to browse his blog after he made his comment, and I’ve been impressed by what I see. He seems to be an interesting blogger, covering some thought-provoking topics in a fair, even-handed manner. Here are some of his posts from the last few weeks that got me thinking:
7 Things You Didn’t Know About The Weakonomist – Probably as good a place as any to start, since this is the post that (indirectly) got me to start reading the Weakonomist. As always with these types of lists, there’s plenty of interesting stuff; he likes flip flops, hates scray movies, and he can play three musical instruments. (Which ones, you ask? Read the post to find out!)
A Simplified Story of Our Economic Crisis – A guest post by the Weakonomist on SimpleMom.net, detailing how we found ourselves in our economic conundrum. A simple, succinct explanation, certainly clearer than many of the official renditions I’ve read. A good read, especially if you keep asking yourself, ‘What Happened?’, without gettingmany clear answers, here would be a good place to look.
How the Federal Government Prints Money – And no, it’s not by putting special ink on special paper and chopping into wallet sized slivers. (Although, it does that, too.) Here, we’re talking about ‘capital creation’, how the government, in the form of the Federal Reserve, can inject additional capital into the system (or remove it, as the situation warrants). It’s not clandestine, it’s not illegal, and it’s necessary for the economy to function as it does (however well that might be, at the moment). It’s an interesting read; given how much the Federal Reserve has been in the news lately (Look for any story that refers to ‘The Fed’), it’s important to know what it does.
Tax Week – The Weakonomist spent an entire week covering different methods of taxation, including the income tax, the ‘Fair Tax’, and the Value Added Tax (VAT), which I’ll admit I didn’t really understand before reading this post. He also concluded that the Fair Tax (or the National Sales Tax, if we use a more descriptive name) would be the best course of action.
I disagree. I could probably write an entire post (or even an entire week of posts) on how I would structure a tax system if I were in charge, but I think that the best possible tax system would be a hybrid, combining a national sales tax (lower than the Fair Tax mandates) with a progress income tax that has a high deductible, allowing lower income people (those making below $30,000 or so) to only pay the sales tax. This would allow us to make the system more progressive, while avoiding the possibility of a ‘negative tax’ for the lower earners (where they would receive more from the Fair Tax ‘prebate’ than they pay in taxes). But that’s just armchair policy making.
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