Carnival of Wealth, Surface of the Sun Edition

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 InvestorFMF lists 7 traits of “the perfect 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.

 

Carnival of Wealth, Black Canyon of the Gunnison Edition

 

Grander than Grand

 

Thanks for reading the greatest blog carnival of its kind, the Carnival of Wealth. That’s not autohype, either. It’s science. Try sifting through another interminable edition of the godawful Yakezie Carnival if you don’t believe us.

This week, the CoW comes to you live from Montrose County, Colorado, home to one of the least appreciated national parks in the system. Black Canyon of the Gunnison was made a national park in 1999, part of the new class of parks that inflated the country’s total to a bloated 58.

Most of the newer parks are garbage. That is, they don’t have the grandeur of their earlier counterparts. In 2003 the Department of the Interior drew a border around 41 square miles of South Carolina swamp and called it a park. Go to Yellowstone, Zion or Denali and there’s no question that you’re somewhere remarkable and spectacular. Go to Cuyahoga Valley National Park (founded 2000) and you’ll think, “How far away are we from that river that caught fire?” Cuyahoga Valley is the only national park to contain a toxic waste dump and a demolished NBA arena. That’s not a joke. Then again, in northeast Ohio’s defense it’s hard to find a plot of land there that doesn’t include something rusting, festering, or decaying.

But Black Canyon of the Gunnison, they got right. The park isn’t big, but it’s stunning. Its most salient feature is its namesake, which for much of its course is twice as deep as it is wide. 2700′ down, and a quarter-mile from north rim to south. Best of all, it takes some effort to get to.

As always, this is a collection of a week’s worth of personal finance blog posts from around the world. Enjoy:

We’ll make fun of the awful submissions later. Let’s start with somebody good. Paula Pant at Afford-Anything reminds us that you shouldn’t let either inflation or mankind’s fascination with the base-10 numerical system fool you into thinking that a $100,000 annual salary or $1 million net worth means what it used to.

W at Off Road Finance is on our short list of bloggers whose blogs we look forward to reading every week, and not for any unintentional comedic value. This time he asks why, if our national debt has quintupled, is inflation stable and gold’s surface tension starting to max out? Believe it or not, there’s a logical answer. It’s the same answer to “How can T-bills pay negative real returns, yet people still buy them?”

And we’ll assume that he added this out of pure sarcasm, which we appreciate:

If there’s one thing the financial blogsphere knows, it’s that debt is bad.

Sure it does.

Speaking of inflation, Cameron at DQYDJ.net says that inflation isn’t just a good thing, it’s a wonderful thing. In moderation, of course. Cameron’s co-writers disagree, but if there’s a hole in his argument, we couldn’t find it.

From Liana Arnold at CardHub comes another intriguing post, this one on the best prepaid cards for various instances (kid’s allowance, alternative check cashing, etc.) We’ll pretend that she didn’t recommend Suze Orman’s awful card.

Sweet Mary Mother of God, Joseph, and all the saints and angels. Jon Rhodes is back with another URL that has nothing to do with personal finance. Last week we emailed him, telling him that his submissions on bass fishing and home dressmaking were wasting everyone’s time. He acknowledged that in his response, then not 48 hours later sent us one from his new site, HypnoBusters.com. It’s about how to quit smoking. Tard.

Do we have any old people who read Control Your Cash? If you’re out there, set your font size to 36-point and get a load of John Kiernan’s latest at Wallet Blog. To summarize, with every marble you lose, you’re losing concomitant control of your finances, too. John thinks you should be forced to put less into your 401(k) and more into Social Security, because you’re too simple for hands-on management. We’re paraphrasing, but that’s the gist of it.

Dave at Financial Conflict Coach says that 90% of all conflict is caused by…we were going to guess “not reading the agreement correctly”, but that’s only a subset of the correct answer. Which is “expectations not being met”. Thinking about it, he’s right. The solution? Lower your standards! (We’re kidding. He has a different, more practical solution.)

(Thank you, InsuranceQuotes.org, for a post about 8 questions to ask your doctor [none of them even remotely related to finance.] Does anyone read the submission guidelines? Here they are, yet again.)

Last week we wrote the following:

Steve Zussino at Grocery Alerts is nothing if not quixotic. Week after week he sends us off-topic and pointless posts, which we tear up and down, and yet he keeps submitting. (And clearly doesn’t bother reading the CoW, nor even the weekly emails we send saying that we accepted his submission, so we might as well continue.) That chick from Newlyweds on a Budget holds the current CoW record, submitting 6 consecutive pieces of doggerel before finally pulling out, but her mark is in serious jeopardy after we received this submission about the supermarket items most often stolen.

Sure enough, he submitted again this week. No one ever said that being self-aware was a requisite for submitting.

How much further can we take this? In the prior week’s post we made fun of his papoose. Should we start accusing him of crimes against children, just to see if he’ll still submit? Alright, we’ll save that for next week. In the meantime here’s more off-topic tripe, this piece about how to save money at some theme park in Toronto. Why Steve Zussino cares so little about the 99.4% of you who don’t live in southern Ontario is something only he can answer. And just for the record, that’s 5 consecutive swings-and-misses from him. One more ties the record.

Free Money Finance thinks you should use smart power strips and cancel your subscription to Redbook. (“5 Tasty Salads To Freshen Up Your Summertime Table!”)

As Dan at High Yield Edge points out, certificate of deposit rates are awful. Or at least the traditional ones offered by lending institutions are. But not the ones offered by other major corporations. They’re called floating rate demand notes, and they’re issued by companies such as General Electric, Caterpillar and Ford. If you’re wondering how these are better than corporate bonds, Dan has the details.

Here’s another piece of homespun sage advice that people take at face value, for some reason. “Beat the market.” Dave from 6400 Personal Finance explains that if your portfolio loses 19% while the market loses 20%, congratulations. You beat the market. Here at CYC we embrace the mantra “It is not enough that I succeed, others must fail”, but don’t ignore the first clause in that sentence. As Dave points out in his famously delicate fashion:

I could give a damn about how your investments did this week.

Indeed. Dave’s not an investment advisor, so why should he? But the point he’s making is that you’re supposed to do well in absolute terms, not relative ones. Rankings mean nothing, and wealth isn’t graded on a curve.

Greg Field at Nerd Wallet lists some of the best credit unions to stash your money in, and the requirements for joining each. They include the Detroit Metropolitan Credit Union, open to:

anyone employed by the City of Detroit, as well as anyone who lives, works, worships or attends school in Wayne, Oakland or Macomb counties.

If that’s you, you have our sympathies.

Guess what? You can’t build wealth without researching your investments. Well, you can, but that’s leaving an awful lot to chance. Dividend Growth Investor doesn’t screw around. He spends 15-20 hours researching each of the 30 securities that he owns at a given time. Yeah, this is comprehensive if not necessarily “hard” work. DGI’s prose can be dry, but this passage illustrates his point beautifully:

I would much rather spend the time I spend on my investments, than pay 0.5% annually of my net worth to an investment adviser, while I feel clueless about my financial situation.

(Post rejected because it used the word “needs” as a noun. We’ve rejected posts for way less than that.)

We all have our pet peeves – irrational hatreds of seemingly unimportant bugbears that other people don’t mind that much. For one of the CYC principals, it’s the music of Train. For the other, it’s hotel bedcovers (mustn’t touch them.) And for Darwin’s Money, it’s pharmaceutical sales representatives’ remuneration packages. A bunch of sales reps demanded overtime, for some reason the case went to the Supreme Court, and got shot down 5-4. Darwin sees it as comeuppance.

(Okay, here’s another pet peeve of ours, which has mutated into something larger. Post rejected because the author made the “cents/sense” pun yet again. His site’s logo proclaims that it’s “Making Cents of Personal Finance.” We’re done. Any more exploitation of the cents/sense homonym gets you disqualified, no matter how good your post is. We had to take a stand.)

Finally, JT of Money Mamba offers a great guest post at Boomer & Echo. He maintains that professional fund managers don’t have a monopoly on finding value. Quite the contrary, in fact. Many fund managers miss out on underpublicized, promising stocks because those managers’ primary objective isn’t to build wealth, it’s to keep their jobs. Too many unfamiliar stocks in a professionally managed portfolio means too much “risk”. Risk, in the sense of “none of my colleagues are doing this”. Homer Simpson: “I can’t wear a pink shirt to work. I’m not popular enough to be different.” JT argues that the bigger a company is, the more likely that it’s priced rationally. Outperformance can only come from greater risk.

Alright, one more. We were somewhat lean this week, what with the scaring submitters off every week with our candor and high expectations, so here’s one we know is good. From the CYC archives, our manifesto.

Thanks again. Catch us on ProBlogger, Investopedia, Yahoo! Finance, Forbes and more. New CoW Monday.

Carnival of Wealth, Off-Day Edition

 

We’ve done this before, hosting our own Carnival and someone else’s back-to-back. Like any good helicopter parent, we don’t trust anyone else with our baby, so here’s what would normally have been Monday’s Carnival of Wealth, postponed 2 days to fit with our regular schedule.

Like the Best of Money Carnival we ran 2 days ago, this is a collection of personal finance blog posts from around the world. Unlike the BoMC, ours isn’t restricted to the 10 best posts we received. A truth that will manifest itself momentarily.

Aside, prelude and life lesson:

The CYC principals took their cat to a local bookstore the other day, part of pretty much the only national chain still in existence. The cat, who’s extremely docile and laid-back, loves to be held for hours on end and loves to be in public. Her favorite store is Home Depot, but a bookstore will do in a pinch. The principals are cognizant enough not to take her to restaurants and supermarkets, but will take her just about anywhere else, other conditions permitting.

Also, the cat’s been to other locations of this same bookstore chain and has never had a problem. Until running into the miserable crone who manages the West Charleston Boulevard, Las Vegas location.

We were immediately “greeted” with “We don’t allow cats. Because of the café.” (There’s a Starbucks in the bookstore. Our plan to sneak behind the counter and wipe the cat’s backside against the assorted pastries and sandwiches was thus foiled.) We didn’t plead our case, the woman’s mind was clearly made up and as we walked out she repeated her mantra about the café. The store has no sign prohibiting pets, by the way.

Did we mention she was unattractive? (This is relevant.) Maybe 60 but looked a good deal older, with the regulation sensible housewife haircut, unfashionable glasses, amorphous body and turkey neck. The cat wasn’t the only sour puss in this little melodrama. Free Money Finance wrote a post a few weeks ago in which he argued that being attractive is good for your finances. It’s good for the world at large, too.

A few weeks earlier, we went to the bank (we don’t do everything together, this is just coincidence) to get a document notarized. Simple, straightforward stuff. Between us we’ve probably had 50 documents notarized at this small, community bank. The document went for several reams, so we just brought in the final page; the one with a place for a signature.

The notary was probably 100% overweight (which you’d figure would make it more likely that she’d wear support garments, not less, but whatever) and had the kind of posterior that wasn’t merely fat, but misshapen. Like, one cheek was the size of a watermelon but the other was the size of an engine block. Our conversation went like this:

“Could you notarize this?”
“What is this? Where’s the rest of the document?”
“1, it’s a questionnaire from the Canadian Securities Institute, and 2, at home. Can you notarize this?”
“Not without seeing the rest of it.”
“Why not? All we’re asking for is for you to confirm that the signature indeed belongs to the person who’s about to sign it. Which you will then have a record of, in the unlikely event that the law ever needs to get involved. The content of the document shouldn’t matter.”

Then the inevitable staredown. Then the battle cry of the unthinking loser who’ll never advance in her chosen field: “I’ll ask my supervisor.” Why help a customer when you can inconvenience the customer instead?

She has no supervisor, at least not with regard to her duties as a notary public. What she meant was that she was going to go into the back for a couple of minutes and shove another cruller in her face, which we encouraged because we wanted to see if she could get out of the chair without using her arms (she couldn’t) and what her asymmetrical waddle looked like from behind (indescribable, you really needed to be there.)

On her return you could see the powdered sugar on the corners of her mouth. “My supervisor won’t let—“ Yes, whatever lie you need to save face. As if that’s a face worth saving.

We went across the street to The UPS Store, where Willow Palin’s 23-year-old doppelgänger smiled and said, “Sure. That’ll be $5.”

The moral? There’s a reason why “ugly” means both “physically unattractive” and “objectionable”. An ugly person watches the attractive people enjoying life – which makes sense, as they’re healthier, happier and more positive – and decides that instead of emulating them, it’s time to ratchet up the jealousy. The ugly people won’t admit as much, but it’s palpable.

It’s not like we’re dismissing these people based on the body God gave each. Everyone can do something. There’s no excuse for being fat. You don’t have a thyroid problem, you have a diet and (absence of) exercise problem. You can buy less dowdy clothes. You can do something with that hair. Or you can say, “Looks aren’t important, I don’t have to fit into your predetermined beauty standards” and keep on not only being miserable, but sharing that misery with the rest of us.

Given the choice, always seek out the attractive person – whether in retail or at the bar. Which will increase the attractive person’s already healthy self-esteem, widening the gap between them and the unattractive people even further. This is how it should be. The uglies can’t impact us if we don’t let them.

Epilog: After being kicked out, we went to another location of the same bookstore a couple of miles away. At least half a dozen employees saw the cat, and none said boo.

 

Alright, on with the Carnival of Wealth. Personal finance blog posts from other people. Some great, some awful, few in-between. Let’s read:

Nothing says “originality” and “dedication” like a WordPress blog that uses the default theme. Marie at Family Money Values wants to know where people with $1 million – $5 million in assets go for investment advice. (Let’s just say we had plenty of chairs at the table this week.)

Steve Zussino at Grocery Alerts is nothing if not quixotic. Week after week he sends us off-topic and pointless posts, which we tear up and down, and yet he keeps submitting. (And clearly doesn’t bother reading the CoW, nor even the weekly emails we send saying that we accepted his submission, so we might as well continue.) That chick from Newlyweds on a Budget holds the current CoW record, submitting 6 consecutive pieces of doggerel before finally pulling out, but her mark is in serious jeopardy after we received this submission about the supermarket items most often stolen. Actually, he just summarized someone else’s article, but that counts as research these days.

Kevin at Christian PF thinks you should max out your 401(k) contribution and pay off your debt. Groundbreaking, yes.

Drew Custer at Nerd Wallet enjoys soccer, but don’t let that stand in the way of this post about why you shouldn’t use a credit card to pay your tax bill. Now if we can just get the active voice to be used by Drew.

Lance at Money Life & More got himself a Samsung Galaxy S II Skyrocket “free”. Obviously that doesn’t include the price of the contract, but paying 0 out of the gate is still good if other people are paying upwards of $150. Lance worked his way into a deal that he wouldn’t have gotten had he not asked for it. We’re willing to bet the sales rep he dealt with was physically attractive, too.

Are there really people who buy cars on Craig’s List? “David Singer” (no way that’s his real name) at Auto Insurance Quotes says yes, and a quick look at our local classifieds confirms it. Seems risky, which “David” seconds and which he shows us ways to minimize the risk of.

Are we just naïve? It seems that from a legitimate seller’s perspective, selling on eBay would make a lot more sense. Yes, it costs money to place the ad, but eBay’s auction format would seem to imply that you could get more money for your vehicle. And from a buyer’s perspective, you’d be less likely to get scammed.

Habeeb at Best Dividend-Paying-Mutual-Funds breaks down a different such fund every week. This week’s subject is the Yacktman Mutual Fund, named after 5-star mutual fund manager Don Yacktman.

Hey, here’s an idea: instead of looking at one facet of return, look at total return. Thus Dividend Growth Investor, who makes that very lament this week. Of course you should consider dividend yield to be merely one component of whatever you’re investing in.

It’d be like the Oklahoma City Thunder saying last Thursday, “Great news! Kevin Durant scored 32 points and pulled down 11 rebounds!” Yes, and you got blown out in a game that looked far worse than its 15-point difference, and your opponent won the championship. DGI continues with his helpful synopses of some of the world’s best-known companies:

The Coca-Cola Company (KO), a beverage company, engages in the manufacture, marketing, and sale of nonalcoholic beverages worldwide.

No one, at least no one we know, knows the Canadian energy markets like Mich at Beating the Index. He analyzes Shoreline Energy, which is a natural gas producer with operations in Alberta and which has been trading for barely a year. Shoreline paid awfully generous dividends, which they recently scaled back thanks to the vicissitudes of the natural gas market. See what Mich envisions for Shoreline’s future.

Finally, Liana Arnold at CardHub breaks down the positives and drawbacks of UPromise’s new MasterCard. You can use the card’s rewards to fund a student loan or 529 plan.

Wait. Can’t you do that with any card?

Yes, which Liana points out.

And that brings us to the end of another thrilling Carnival of Wealth. Thanks for joining. We’ll see you tomorrow with another Anti-Tip of the Day, Friday with another fresh post, and Monday (not Wednesday) with another edition of the CoW. Cheers.