Blog – Page 113

Hopefully Fluffy remembered to wear loose-fitting sweat pants to the clinic

A little public service announcement, if you will:

Visited a remote small town (pop. ~40,000) this week, parked in a hotel parking lot right off the interstate, and saw a kitten hiding in the bushes. Walked to the nearby supermarket, bought some cat food, and returned to see 4 of the kitten’s friends and/or siblings. And an adult cat.

An employee at the adjacent restaurant explained that no, no one dumped a litter of kittens in the parking lot, thank God. The colony of cats had been there for at least a year, ridding the area of mice and surviving off restaurant scraps. (Although they ate the supermarket food at superfeline speed.) In fact, the colony was now in its 3rd generation.

It’s only going to get worse, as this town has no volunteer organization to trap, neuter and release feral cats. The town also has extremely cold winters. Outdoors is no place for a kitty.

Don’t be cheap, negligent, or somehow moronically sympathetic to the idea of your pet losing his or her sexual identity. (Yes, some humans are that clueless.) Get your cat fixed. Or your dog. Or your child, if your child has traits that aren’t worth passing on to any descendants. If everyone did this, within a few years there’d be no more unwanted pets or unwanted stupid people.

Okay. Big Carnival this week, no time to spare. The Carnival of Wealth, weekly roundup of personal finance blog posts, etc., etc. Let’s go:

Dave at 6400 Personal Finance is so on-the-nose, every time he submits, that we figured we’d do him the courtesy of not making him have to scour the CoW to see his post.

If you’re jealous of those with more money, don’t just sit there and complain. Do something to make more money yourself – spend less time drinking or smoking and socialising, and more time working.

No, we’re not quoting ourselves. We wouldn’t use the Commonwealth spelling of “socialising”, although the rest of it sounds like something we’d say. Or Dave would say. Or anyone with even the most basic understanding of how to get rich would say. But because an billionairess said it, some people have chosen to be offended by it. So we can add “being indignant” between drinking and smoking on the list of things you should spend less time doing if you want more money.

Dividend Growth Investor explains why he thinks dividends are more important than capital gains. He says that stocks with consistently growing dividends free you from having to pay attention to market swings. We’d argue that that can’t be true, given that the price of a stock is a far greater component of its value than is its dividend, but he still explains his point in the staggering detail we’ve come to expect from him.

Off-Road Finance presents a lucid explanation of quantitative easing how the Federal Reserve is weakening our economy by incrementally lowering the value of each dollar as if by magic. God, this post is depressing. But necessary. Read it.

We think investing in real estate is one of the best ways imaginable to make money. It lets you leverage at a high level even if you’re a rank amateur, and both the real estate market and its secondary financing market are at historic nadirs. Free Money Finance thinks we’re crazy. Well, that’s not true. Then again, he might think we’re crazy, but if he does that assessment is irrespective of his submission.

His post is (partially) titled “Why You Should NOT Invest In Real Estate”. It’s really more of a reminder to anyone who thinks that there’s nothing more to it than buying a couple of houses and watching the money fall from the sky. This guest post written by someone named “Apex” is actually spot-on. You can make money in real estate, but it takes work and patience. (So do the smart thing, and buy lots and lots of lottery tickets instead!)

Our favorite new site logo of the week goes to the M.C. Escher-inspired use of negative space atop Financial Ramblings’ masthead. The author, Michael, just opened for business a week ago and so far has posted every single day, a schedule that will kill him. (Alas, he’s already repeating himself.) We loved part of his “About” page almost as much as we do his logo:

While many financial bloggers have built their sites on a foundation of personal struggles, I’m coming at things from a different angle. Yes, dramatic stories of debt and strife make for good reading, but I’ve always felt that you should seek out those who have tasted success and learn whatever you can from them.

He’s right except for one point. Stories of debt and strife make for horrible reading.

Our most shocking discovery of the week is that Paula Pant of Afford Anything (note the new absence of the hyphen, the story of which you can read about on her site) is a Burning Man attendee.

Dude, people don’t “attend” Burning Man. They participate.

Fine, Burning Man participant.

Actually, they prefer to be called “Burners”.

Sorry. We’ll consult our Hippie-English/English-Hippie dictionary next time. Bottom line, if you can temporarily get the image of Miss Pant riding a recumbent bike past a giant tin sculpture of a gyroscope while wearing a leopard-print bustier and matching grass skirt out of your head*, she left home for 10 days and the world didn’t end. It could have ended, but she delegated stuff instead. You should have such foresight. Her time was, and is, more important to her than money. Beyond a certain level, of course.

Sometimes we award a citation for the infomercial that does the best job of masquerading as a blog post. This week, John Frainee at Christian PF inspired a new category: infomercial that doesn’t even try to be anything but. See if you can figure out what he’s selling.

Has Harry Campbell at Your PF Pro stolen our idea of stealing stock photos? This week, he explains why you need to rebalance your portfolio and how often to do so. (Harry? Bigger font.)

A new and exceedingly verbose submitter this week is Billy Murphy of Forever Joble$$ (too-cute-by-half dollar signs his.) Billy is a professional poker player and a figurative poker player, too, examining the “pot odds” of various business opportunities while the people around him fold and complain about the cards they’ve been dealt. To the jealous (see Dave’s leadoff post above), Billy is rubbing your faces in it with his stories. To anyone who wants to build wealth – Control their Cash, if you will – Billy’s progress should be inspiring. Once he gets a proofreader, he’ll be unstoppable.

Dave at Excess Return explains dividend reinvestment plans. Just what they sound like, you use your dividends to automatically buy more of the stock that got you the dividends in the first place. The trade-off is obvious – it’ll cost you a little diversity – but Dave argues that with the right stock, this deferred-gratification strategy is well worth it.

Ken Faulkenberry at AAAMP Blog returns with his 5 largest factors that help your portfolio grow. #1 through #4 might sound obvious, but he explains their relative merits. Also, #5 is one that most people overlook.

From Andrew at 101 Centavos, all about algae! The fantastic new ecologically friendly fuel that will commit petroleum and its distillates to the ash heap of history, right next to the charcoal.

Yeah, except algae is inefficient as a fuel and requires inputs that aren’t readily available. Also, no private company will bankroll it, at least not without government subsidies. That’s why not 1 but 2 federal cabinet departments (Agriculture and Energy) are propping up the algae industry. And you thought we had an economic system that approximated free enterprise. Please. That died with Calvin Coolidge.

Cameron Daniels at DQYDJ.net pokes fun at all the “personal finance” bloggers who do nothing but post regular updates on their student loan and credit card balances. His lambasting is reprehensible, and we won’t stand for it. Those poor people are just trying to make it, they’re supremely qualified and very intelligent, they just got in a little bit of trouble and shouldn’t have to spend decades being punished for it, to say nothing of being ridiculed on top of that, and…we probably should stop, otherwise we’ll scare any new Control Your Cash readers into thinking that we’re being anything but sarcastic. Anyhow, Cameron’s post is hilarious and the comment section even degenerates into a discussion about home construction techniques (including one thread from a woman who claims that not only are European houses constructed better than North American ones, but that her sister’s North American house collapsed 3 weeks after she bought it. We’re not sure which is the more fanciful tale.)

John Kiernan at Wallet Hub asks another of his depressing rhetorical questions to which the answer is usually “yes” followed by a sigh. Are We On The Verge Of Another Mortgage Disaster? This week, John hits on reverse mortgages. They’re bought primarily by stupid old people who don’t understand what they’re getting into. If wisdom comes with age, why are seniors always the ones getting taken advantage of by everyone from panhandlers to phishers to reverse mortgage salespeople?

Odysseas Papadimitriou at Wallet Blog (distant relation) discusses the impact food poisoning cases can have on the greater economy. But our takeaway line is his offhand comment that 240 people have been murdered in Chicago this year. On a completely unrelated note, Illinois is now the only state in the Union whose interpretation of the 2nd Amendment forbids citizens from defending themselves by carrying concealed weapons. A coincidence, we’re sure. Chicago itself has gun laws even more stringent than its state’s. Meanwhile, violent crime remains comparatively negligible in the parts of the country where people own the most guns (Alaska, Montana, Idaho, rural Nevada, the Dakotas, Utah, etc.) Another coincidence, doubtless.

If you’re worried about China soon having the largest economy in the world, what you’re saying is, “I’m an imbecile, and it never occurred to me that a country with quadruple the United States’ population should have a larger economy. Why, if that happens the average American will only be 4 times as rich as the average Chinese. How awful for us.” Liana Arnold at Card Hub (another distant relation) shows how with a burgeoning economy, the Chinese are also taking on our habit of overextension. BONUS: a picture of an actual Chinese person!

(The casual observer might think it’s a picture of Ms. Arnold. Actually it’s of the professor quoted in the post.)

Liana’s post contains one of our favorite lines, ever:

In China, you face criminal prosecution if you don’t square debts within three months of receiving your second past-due notification letter.

Please God, let that law be adopted in America. A side benefit to it would be the elimination of 99% of the blogs that Cameron at DQYDJ references above.

FICA! That mysterious acronym that appears on your every pay stub, by which the federal government confiscates your money before you even see it. You pay for Medicare, whether you’ll ever need it or not, and you pay for Social Security, even though it won’t exist by the time you’re old enough to qualify for it. (The road will end well before the can can be kicked that far.) That’s called living in a free society, if by “free” you mean “forcing you at gunpoint to contribute to the financial well-being of strangers, maybe even antagonists.”

Yes, that’s a diatribe but it’s going somewhere. Darwin’s Money speculates as to what FICA limits will be in the next couple of years: what percentage of your pay will go to fund FICA’s two components, and at what income level you’ll no longer have to pay additional Social Security taxes.

(And if you didn’t know, the Social Security tax is a regressive one. The more money you make, the lower the percentage of it you pay in Social Security taxes. Sound unfair? You don’t know the half of it. Read our book for the excruciating details, in the chapter that comes before the one about how to free yourself of this paycheck-to-paycheck nonsense once and for all.)

Glad you could make it. New content daily, new CoW weekly (hence its name), appearances on Investopedia irregularly. See ya.

*That’s what guys do at Burning Man, right? It’s probably safe to assume women do it too.

The French dude in this picture? 27 years old.

Ah, les cigarettes. Ils sont magnifiques!

I think we are inviting God’s judgment on our nation when we shake our fist at Him and say, “We know better than you as to what constitutes a marriage,” and I pray God’s mercy on our generation that has such a prideful, arrogant attitude to think that we have the audacity to define what marriage is about.
(Journalistically abridged version: “Let’s kill all the queers, or at least not serve them.”)

The Chick-Fil-A story came and went, but we’d prefer to take a sober look at its absurdity after a few weeks have passed. People protested, Dan Cathy got assailed, and to the extent that a regional restaurant chain’s management can influence public policy, Chick-Fil-A’s chief operating officer remains committed to the non-marginal belief that marriage is between a man and a woman.

It makes no sense to shun a business because someone said something that hurt your feelings. Your actions either won’t make a difference, or the difference they’ll make will be a negative one.

Take the brief and unspirited Chick-Fil-A protests. What good did they do? That is, what tangible economic benefit did they achieve? How did they make the world a better place?

You could argue that such protests aren’t supposed to provide anyone with an economic benefit, they’re supposed to do the exact opposite to the targeted parties.

But a month later, Dan Cathy is still rich. Say the boycott had worked, to the extent that a few restaurants ended up closing. The company’s franchisees, most of whom have far less money than Mr. Cathy, would have suffered far worse than he. Any affected employees would have suffered even worse. All because a man whom you have no connection with, and who has an extremely modest impact on the crafting of marriage laws, gave his Biblically consistent and majority opinion as to what defines a marriage.

Dan Cathy could have said the Armenian Genocide was The Awesomest Thing Ever and it shouldn’t have made a difference to anybody. The actual business of serving chicken sandwiches isn’t connected to the opinions of the guy in charge.

Legitimate reasons for boycotting Chick-Fil-A:

They boil chickens alive.
The secret ingredient in the Polynesian sauce is toxoplasmosis.
New seasonal pricing – $300 a sandwich.

That’s it. Making a decision based on anything non-galline is part counterproductive, part foolish. And attempting to assess the values of the people in charge is 100% hypocritical. Either that, or every pot smoker who protested Chick-Fil-A must buy exclusively from pro-gay-marriage dealers.

Boycotts temporarily satisfy. (“Delta kept us on the runway for 3 hours. I’m never flying that airline again!”) Three months later, when you need to fly to London and Delta’s prices are hundreds of dollars cheaper than Virgin’s or American’s, your mind will probably change. That being said, almost all of us are guilty of this.

For instance, your humble bloggers refuse to do business with a local Toyota dealership that uses Michael Vick as its spokesman. It’s a 2-person boycott that will have a negligible impact on the dealer’s bottom line. We don’t expect other people to join our passive protest, although we can’t fathom why anyone would patronize a business whose management could have chosen any of 1500 active NFL players to hawk its products yet went with a convicted felon who did to dogs what Josef Mengele did to Jews.

So we established our position. Now, how far should we take it? Should we never buy a Toyota nor a Lexus from anyone anywhere, because how can we do business with a corporation that would grant a dealership to someone who would hire Michael Vick?

That same dealership’s vendors include companies we do business with – a couple of local radio stations, for instance. Should we refuse those companies’ money? If so, what about the radio stations’ vendors; their catering company, for instance? Are 2 degrees of boycott sufficient? How about 3? Where does, or should, it end?

We know a former vegan who quit and reverted to omnivority. Why?

It was too hard. She couldn’t eat beef or pork. Okay, fine. She couldn’t eat chicken. Yes, that’s how herbivority works. She couldn’t eat eggs or fish. The culmination happened when she refused a plate of pasta served with an anchovy sauce. The dish was 1% meat, but that was enough to taint it. At this point her hair had started falling out, and her skin had the pallor of a corpse. (She also smoked cigarettes, reinforcing that her restrictive diet had little connection to health.)

Which brings us to the most profitable company in America, as measured by return on shareholders’ equity. The difference between this company’s assets and its liabilities is $229 million. Which is equivalent to the profit it makes every 10 days.

Almost half the cigarettes sold in the United States come from Philip Morris International. Dividing that into the American Cancer Society’s figures, that means the company kills 217,000 of its own satisfied customers every year. (Of course, that’s a semantic mistake. The 217,000 kill themselves. Philip Morris only sells them the weapons.) That’s to say nothing of the myriads more around the world who die courtesy of Philip Morris cigarettes.

Philip Morris International pays a $3.08 dividend annually. That’s a 3.4% yield, which is excellent. (And remember that the lower that yield is, the higher the stock price is, which is not exactly a bad thing.)

Chick-Fil-A feeds people. A day without lunch is a miserable day indeed. Philip Morris International, even if its CEO were to register as a minister with the Universal Life Church just so he could marry as many homosexual couples as he can find, still sells death. His products have no worthy purpose, and do nothing to better the species nor our surroundings.

They’re also a fantastic buy. Philip Morris International has a diehard customer base, if you will, with hundreds of thousands of budding smokers waiting to take their place once the former check out. For every one who quits, plenty of others never do, taking their brand loyalty to the grave. Refusing to invest in the company that gives said consumers a reason to die is high-mindedness that leaves cash on the table.

Anheuser-Busch, too. Same thing. Last year, an $8 billion profit on $39 billion in revenue. Selling a product that numbs brain cells, impairs judgment and causes far more problems than it solves. Should we take the noble road and not purchase its stock?

Whatever for, if it continues to turn increased profits and pay regular dividends? It only does so because people like to get drunk. Millions of them. Are we going to do our best Carrie Nation, standing outside 1 Busch Place in our finest black bloomers, espousing the moral rectitude of temperance? Doing so wouldn’t convince a soul. As long as smokers and drinkers (and chicken sandwich eaters to a lesser extent, although Chick-Fil-A isn’t publicly traded) want their fix, someone’s going to get a cut of it. Why not you?

If your answer is “because I’m better than that”, good for you. We’ll let you know when your local organic yoga mat workshop does its IPO.

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