How hot is it this summer? This is a picture of Juneau.
Welcome back to the Carnival of Wealth, the only personal finance blog carnival worth a damn. Submissions from around the world, most good, some dreadful, none boring. We do it every Monday. Let’s get started:
Last week, W from Off Road Finance gave us the 1st post in a series on the alternative to investing. He’s not kidding. He maintains that there’s a better way to build wealth than the conventional method of doing what everyone else does, and through 2 installments of this series, his logic holds up. Read this one slowly – lots to digest.
Anyone who admits to drawing inspiration from Control Your Cash is going to figure prominently in any Carnival of Wealth. Dave at 6400 Personal Finance reached the same conclusion we did about the absurdity of buying gas anywhere other than where it’s most convenient to.
Dividend Growth Investor gives us 5 stocks that make it a point of increasing dividends, something Facebook and Google have yet to do.
So you’re saying that committing to life in the ultimate comfort zone isn’t as comfortable as you thought it might be? No way! Young & Thrifty gives us a first-person lament of her career path, that of teacher. She’s thinking entrepreneurship might be more professionally (and financially) satisfying. We don’t usually publish diary posts, readership-as-therapists posts, but this one’s somewhat different.
Aside:
Despite what anyone tells you, teaching is not a difficult nor a demanding job. In fact, it’s hard to imagine an easier occupation. We each spend our first 12 years in a classroom, right? How little ambition do you have to have to think, “Well, that’s done, plus I did another 4 years in a classroom for a total of 16. Now, with the world as my oyster, I think I’d like to…spend my life in a classroom.”
Most of us have coworkers. Vendors. Clients. Counterparts whom we interact with more or less as equals. But teachers have charges. Minors, who have to respect your seniority. Teaching is a facile way to find a position of authority for oneself without having to do anything. Even a teacher on her first day on the job has a few dozen underlings. There’s no other line of work you can say that about.
There’s more. A teacher’s life is filled with rehashed subject matter. Committing to education as a profession means abandoning discovery. And growth. A 2nd-grade teacher who spends her workday explaining the difference between “to” and “too” is not what you’d call intellectually stimulated.
That tears it. This is the most offensive thing you’ve ever written, and that’s saying something. If it weren’t for teachers, where would you be?
Thanks for missing the point. If it weren’t for train engineers we’d all be stranded at home without any gas in our vehicles, but no one genuflects in front of those guys. Almost everyone contributes something tangible to the general well-being of society. Teachers are no better nor worse in that respect.
Summers off, little possibility of being fired, and the least challenging of atmospheres. What’s not to love about that? Oh yeah, the atrocious pay and the feeling of commiseration among your fellow teachers.
Still not done. It’s not a tough job. Army Ranger is a tough job. Do you know what the attrition rate for teachers is? Close to 0%. If you want to be a teacher, you can and will be one with a minimum of effort. No one drops out of an education program because the coursework is so demanding.
And can we stop referring to teachers as heroes? They aren’t, unless you mean the ones who attempt to teach math to girls.
Teacher Man at My University Money argues for passive investing. Find (and fund) your 401(k) (or in his case, RRSP), then sleep on it. Teacher Man thinks that if you don’t, you’re probably going to lose because you’re up against smart people and supercomputers on the other side of every trade.
Huh?
Investing isn’t a zero-sum game. Yes, you could argue that any individual trade is, in that the buyer wants the price to rise and the seller doesn’t, and thus cumulatively investing must indeed be a zero-sum game. But is it?
No. The seller doesn’t necessarily want the price to fall. The seller could have a million reasons for selling. Liquidity is often as important as wanting to get off the roller coaster.
Also, Teacher Man stumped us with this discovery:
during a recent 20 year stretch the S&P 500 returned an average of 9.1%…yet the average investor only realized gains of 3.1%!
On first glance his claim might sound impossible, but it isn’t necessarily. For one thing, the S&P 500 contains different components than it did 20 years earlier. But how did he arrive at that 3.1% figure? Does he really have data on every single person who invested in S&P stocks since 1992? Does he mean median, rather than average? Whatever the answers, the allegation is an effective excuse for just buying mutual funds. (Which are managed by professionals who use computers. How that’s an advantage for Teacher Man’s investments, we’re not sure.)
(UPDATE: Teacher Man informs us that he meant 3.9%. We’re still scratching our heads, just not as hard.)
Don’t read anything into how this paean to passive investing was written by a teacher. Our favorite part of the piece was a comment (ignore the writer’s homonym confusion and pay attention to his point):
I don’t believe it’s about being “smarter” than the other guy. It’s about being willing to doing your homework and research the companies you are considering buying. Valuation is the key. There are many great companies that should not be bought because there valuation already reflects what everyone knows. But there are ALWAYS good companies that are out of favor and priced below there intrinsic value. You may have to look at 200+ companies instead of 10 to find them. You don’t have to accept “average” unless you are unwilling to put the time and effort into your investment portfolio.
Habeeb at the unconventionally hyphenated BestDividend-Paying-Mutual-Funds breaks down Wells Fargo’s Advantage Growth Fund. It’s up 10% per year over the last decade, and its biggest component by far (more than twice as much as any other) is Apple. Again, past performance is not a predictor of blah blah
Lance at Money Life & More learned how to divide by 30.
From PKamp3 at DQYDJ.net:
Once again I dropped the ball and neglected to give you folks a post on option contract divined predictions over the next few months (and years).
Yes, you’re a crushing disappointment. For shame.
Seriously, what he means is that he’s a little late with his self-imposed homework assignment: using put and call prices to predict the level of the S&P 500. PKamp3 speculates as to where the markets are heading, and what impact it’ll have on the presidential race.
John Kiernan at CardHub explains how getting your credit card numbers lifted is a lot easier than you think. Folks, change your passwords regularly and often. (This coming from someone who had his Yahoo! account hacked into twice. Fortunately there was nothing valuable in there, but it demonstrates the wisdom of using “123456” for a password.)
Free Money Finance has another book review, this one of Stephen L. Weiss’s The Big Win: Learning from the Legends to Become a More Successful Investor
- Strong emotions
- A powerful ego
- Concentration on the short term
- Permissiveness
- Not being hung up on research
- Effortlessness – taking time to relax
- Lethargy
Please, please be scratching your head right now. If you’re not, get out of the market immediately and give your money to the homeless. We lied: the above contains the opposites of what the perfect investor embodies. Read the link for the details.
Odysseas Papadimitriou (YES! Finally spelled his name without checking it) at Wallet Blog has a political rant this week. Not a sectarian one, but rather an argument for direct democracy. No, he’s not talking about getting rid of the electoral college, or turning the nation from a republic into something else. Rather, Odysseas is examining something we weren’t familiar with: Project Madison. It’s the brainchild of U.S. Representative Darrell Issa (R-CA), and it’s essentially crowdsourcing for legislation.
Read that again: a member of Congress had an original and workable idea that isn’t obscenely expensive.
Finally, for every 100 morons online who complain that Walmart hurts women and kills jobs, JP at Novel Investor reminds us that brand loyalty is hugely important. Coca-Cola and Apple can, and have, withstood the occasional hardship but bounced back largely due to extraordinary public awareness and devotion.
And we’re done. You know the schedule: continuity and reliability are important. New post every Wednesday and Friday. New Anti-Tip daily, new CoW next Monday. Check us out on Investopedia, Yahoo! Finance, and we should have a new post up on ProBlogger any minute now. (And this has nothing to do with personal finance, but we’re in Nevada Magazine this month, too.) See ya.
