Another Carnival of Wealth? Believe it! Personal finance blog posts from around the universe land here every Sunday. If you’re a reader, you don’t have to do anything except show up here Monday morning. If you’re a blogger, submit your gold here. Gold. No garbage. We’ve got readers to entertain and an Alexa ranking to preserve.
Carnival of Wealth, Nevada Day Edition
October 31, 2011
This sign doesn’t even crack the state’s top 5 for longest distance to gas
It’s time for another edition of the only personal finance blog carnival whose hosts actually put some effort into it, the Carnival of Wealth. A weekly roundup of the least average blog posts in existence. Sit back and read. If you want to contribute a post of your own, all you have to do is have an established blog and enter here. Deadline is midnight Saturday. You can submit again once Monday’s carnival goes live. Submit twice or more and we reject all your submissions. Send something recent, like written in the last couple of weeks. Keep it on topic. And for the love of God, spell properly.
Today is the 137th anniversary of CYC’s home state’s admission to the Union. If the only parts of Nevada you’ve seen are Vegas and/or Reno/Tahoe, you’re missing nothing, and we mean that in a good way. Outside the only two metropolitan areas, the remaining 99% of the state averages fewer than 5 people per square mile. The whole world should be that sparsely populated.
Aside from the stuff you already know about, Nevada has no state income tax and liberal interpretations of freedom. The legislature only meets every other year, giving legislators only half as many chances to screw things up. Also, Nevada is in a 44-way tie for ugliest state flag. The only good ones are Alaska, Texas, Arizona, New Mexico, Colorado and maybe Hawai’i. Okay, on with the carnival:
He’s totally blandishing us, but who cares? PKamp3 at DQYDJ.net (it stands for “Don’t Quit Your Day Job”) bats leadoff this week. He read our recent post about students who borrow money they’ll never have the capacity for paying back, and wonders whether lenders should charge higher rates to students who choose less lucrative fields of study.
We hate to be the ones to tell you this, but a savings account is not an investment. Sooner or later you’re going to have to put your money into something that grows. If you’re young and have no clue where to start, Corey at 20s Finances has some sensible ideas.
Q: How much can I contribute to my 401(k) each year?
A: As much as I want.
Wrong. Unless what you want is to be probed and keel-hauled by the IRS. There are limits to everything in this life, except Sprint’s data plan and Ryan Seacrest’s vapidity. Roger White at 401(k) Calculator explains how much you can contribute this year and next while simultaneously keeping the taxman satisfied.
Speaking of the IRS, about the only time they’ll take “Later” for an answer is if it involves you giving them money. Mark Roberts at Tax Brackets explains how to avoid fines and imprisonment if you were smart enough to wait until the last second to pay your taxes, but dumb enough not to have any money on hand to do so.
Practical advice from Mike Holman at Money Smarts Blog this week. He argues that when you’re traveling abroad, Skype won’t necessarily save you money over going with your mobile provider’s long-distance plan. Mike got bitten with data roaming charges that tore at his inherently thrifty Canadian soul.*
Nathan Richardson at Complex Search writes about credit scores. We get the feeling Nathan was the kind of kid who had Monday morning’s homework done on Friday night. Look at the colorful charts and graphics in this post. A+. Gold star.
From Joe Morgan at Simple Debt Free Finance, a call to ignore annual percentage rate in favor of annual percentage yield. Oh, stop whining. Yes, there’s math in his post but nothing more complicated than exponentiation.
Suba at Wealth Informatics went slightly crazy but nevertheless entertaining this week, co-opting a nursery rhyme and turning it into a haunting parable about investing. See what adventures await in “the charming little town of Pigglesworth.” (Which is not, as it turns out, where that corpulent little Dixie Chick lives.)
Plan on traveling to the Central African Republic or Bhutan armed with nothing but your passport and your Discover card? Good luck with that. Marjorie Rochon at Card Hub explains what plastic you need to have handy before traveling internationally.
Odysseas Papadimitriou returns after his quick rapier job on usury laws last week. This week, Wallet Blog‘s resident wag follows it up by arguing that penalty rates for delinquent credit card holders should be tied to prime rate by law. (Ed. note- Pay your bills by the due date.)
Alright, this next submission deserves so much editorial comment that we should probably just stop right here and make a full-on blog post about it, but what the hey.
Newcomer Ben Demeter at Credit Card Assist thinks that credit card rewards steal from the poor and give to the rich. No offense, but newcomer Ben Demeter is out of his mind. This meandering post argues that rich cardholders benefit more from rewards programs than poor people do, which barely counts as an observation. He even makes this exceedingly tenuous logical reacharound:
A. Most retailers charge the same whether you pay with cash or a card.
B. Card issuers charge retailers a percentage point or two for every card transaction.
Therefore, C. Cash customers should pay slightly less.
Theoretically, there’s some truth in that. And in practice, some (but hardly all) retailers give cash discounts. It’d be an accounting nightmare for the rest. Having established his point, he continues:
D. Poor people who can’t get cards have to pay cash.
Therefore, E. The “rich” people who pay with cards are soaking the poor people who don’t.
The loaded and leading questions in this post are laughable:
Should we be rethinking our use of rewards cards? Is there a way to modify or improve rewards cards so that everyone benefits, including the poor? Or should we boycott rewards cards entirely because of their undue burden on the poor?
He phrased them as questions, so he must want answers. 1. No. 2. No, what would the point be? and 3. Yeah, good luck with that.
As we mention time and again in the book Control Your Cash: Making Money Make Sense, poor people are poor largely because they choose to be. If you think that’s an unfair and inaccurate generalization, ask the next person you see buying cigarettes and lottery tickets at the 7-Eleven to show you his bank statements.
Will from Former Banker is another newcomer this week; not just to the carnival, but to blogging itself. He’s shared with us his first-ever post (excluding his introductory one.) It’s a review of Gregory Zuckerman’s The Greatest Trade Ever, the story of John Paulson’s successful anticipation of the subprime housing collapse.
We hope Nerd Wallet buys Capital One something nice and shiny for its birthday this year. Or vice versa. This week the former’s mash note to the latter consists of Anisha talking about Capital One’s new Spark line of cards.
Another home run from Mike Piper. This week, The Oblivious Investor gives us Part II of his breakdown of index funds vs. exchange-traded funds.
Jeremy Vohwinkle at Generation X Finance says that if you have to ask if you can afford something, you can’t. We’re assuming he doesn’t mean that literally (your humble blogger bought an iPhone 4S only after running the numbers), but he does make a point: at the very least, do a little internal cost-benefit analysis before plunking down your credit card. Calculate, don’t justify.
There’s nothing like the obfuscating and capricious IRS rules to keep you focused. Madison at My Dollar Plan gives the lowdown on the new contribution limits for IRA holders, 401(k) holders, and even the very few of you who have SEP-IRAs and SIMPLE IRAs.
If you listen to Howard Stern, you’ve heard those suspicious commercials for Beezid in which an overworked voice actress says you can buy an iPad for 49¢. Is Beezid a scam? Uh…no! And neither is Social Security, for that matter. (Of course Beezid’s a scam. Well, unless you think you don’t mind paying for unsuccessful bids. Emily Guy Birken at PT Money explains how penny auction sites work.)
Okay, this is different. Kyle Taylor at The Penny Hoarder explains that you can purchase copyright shares of songs that someone else wrote. If someone who wrote a profitable song needs quick cash, he can sell his publishing rights (or part of the rights) to the highest bidder. He gets your lump sum, you get the royalties. So if Dolly Parton ever decides to unload her rights to “I Will Always Love You”, you could conceivably buy a piece of it and get royalties until the copyright expires (which, according to law, is 95 years after she does.) But Dolly didn’t become a mogul by selling her rights to people like you. So start off small and put in a bid for something like GG Allin’s “Live Fast Die Fast”.
Alright, we’re done. Leave a comment. See you next Monday.
*We don’t know about Mike, but as a rule they’re the worst non-European tippers on the planet.
Carnival of Wealth, Unkillable Edition
October 24, 2011
The most tanned people in Seattle
No, we’re not celebrating Halloween a week early. We’re just testifying to the resilience of this curious little carnival that we’ve chosen to foist upon the universe every Monday. If you run a personal finance blog, you can join in the carnage by submitting a recent post here. Submit more than once per carnival, and you’ll join the ranks of the undead. Same goes for submitting during the dark period (which starts at midnight Eastern Time Saturday, and stops when we go live Monday.) You ready? Here goes:
First out of the gate, the ubiquitous Neal Frankle at Wealth Pilgrim. If you’re about to call it a career, the last thing you want sent your way are retirement problems. You spent years socking away your hard-earned cash, so you’d better be sure it’s there for you when you need it. Besides employer fraud, there are several retirement program pitfalls you need to avoid. Neal gives his top 5.
If you have no clue what a mutual fund is, no worries. It’s not like we’re born with that knowledge; you have to have picked it up at some point. Consumer Boomer explains what they are in reasonable detail.
Infomercial masquerading as a blog post? Oh yes, we do. Jeri Ford at the ungrammatically titled Help Me Travel Cheap asks which credit card has the best 50,000-mile signup bonus.
You see, we’re so dumb that we’d never notice that Jeri Ford and Craig Ford submit minutes apart every week. And that they happen to write on similar topics. And that Jeri’s above submission has Craig’s byline on it. From the masculine half of Papua New Guinea’s favorite missionary couple comes Money Help For Christians, in which Craig demonstrates how much free and seriously discounted travel he enjoyed in the last year, just by taking advantage of credit card promotions.
He’s right. When credit card companies offer gigantic rewards – loss leaders, if you will – the issuers understand that most people who take the bait will incur enough debt to pay for the travel many times over. So if you’re one of the conscientious few who know how to pay their freaking bills on time, you’ll be a free rider. In this case, literally.
The folks at Nerd Wallet are diligent about submitting every week. This week, Laura Edgar pits the Chase Freedom card vs. the Capital One Cash card in a plastic-on-plastic battle to the death. Which card is better? We’ll spoil it for you. The Chase Freedom. Capital One Cash’s biggest selling point is its low interest rates, which we’ve explained time and again are the least important criteria for getting a card.
(An aside, and a new requirement for submitters: stop getting your Indian virtual assistants to write your stuff for you. They’re supposed to help only with time-consuming, menial tasks that no one has yet programmed a robot to perform. If you consider writing blog posts to be in that category, then you’re insulting Control Your Cash’s readers. Don’t pull that crap around here.)
Odysseas Papadimitriou at Wallet Blog is one of the very few guest bloggers whom we allowed to contribute to Control Your Cash. You need to subscribe to his feed, and read what he says this week about usury laws. Odysseas seems to believe, as we do, that there’s no such thing as gouging. No one’s obligated to sell you a service or product at a price that you like, and in the event of a shortage, high prices serve to put a good in the hands of the people whom that good is most important to.
Personal finance bloggers are finally starting to reexamine and get off that ridiculous frugality kick, realizing that pennies and nickels aren’t saved instantaneously. And in the end, they’re still just pennies and nickels. Suba at Wealth Informatics explains how if you value your time, it’s cheaper to eat at P.F. Chang’s than attempt to cook their signature dishes yourself. Furthermore, those people waiting at Costco to save 11¢ a gallon on gas would be better off paying a little more at the empty gas station across the street. Also, Suba claims that there are people who wash and reuse Ziploc bags. We hope to God she’s joking.
There are people who actually refer to themselves as being members of “Generation Y”? Apparently there are, and Teacher Man at My University Money is one of them. You’ll be happy to know that he’s not only bought into marketers’ jargon, but that he thinks young employees should give their bosses uncompensated labor. Nothing makes a boss happier than hearing that. (“You’ll work for me, and I get additional bang for each buck without even asking for it? Count me in.”) This post contains a comment from a Brit who includes the phrase “dog’s bollocks”, which it turns out is complimentary.
The above post represents the lower threshold for crimes against the English language that we’ll accept in a submission. TM didn’t hire an editor, so we’ll help out in our capacity as carnival masters:
- It’s “shy”, not “shed”.
- A person is “who”, not “that”.
- By “different from”, you mean “different than”.
- A left parenthesis needs a right parenthesis.
- Every time you use an adverb unnecessarily, an imp gets his horns and tail. You’re welcome.
We finally figured out why Dave Ramsey calls his debt reduction strategy a “snowball”. It’s because it’s a deadly combination of cocaine, heroin, and other opioids that people can easily develop an addiction to. The latest victim is Tim at Christian Personal Finance, who cites this mathematically confounding strategy as a way to pay down multiple student loans. It remains a mystery why you’d take out multiple loans in the first place with no guarantee (or even likelihood) of a job that’ll not only cover the loans, but provide a better income than you’d have had if you’d just gone to trade school in the first place.
Drat. We hate it when Free Money Finance counters the point we’d made one second earlier. He swears that the debt snowball works with people who are clueless about money. He noticed this while working as a debt counselor, so we’ll take his word for it.
Phil at PT Money is thinking entrepreneurially. Why sell your old house while buying a new one, when you can rent out the former and increase your cash flow passively? He ran the numbers, and more to the point, isn’t looking to get rich by exchanging his time for a flat sum of money. Phil’s decided to hire a property manager because he’s a rookie. (Pro tip: the more experienced you get at this landlord thing, the more call you’ll have for a property manager.)
Finally, there it is again. The eternal quandary of time vs. money. Ben Franklin equated the two quantities, but Barb Friedberg knows that there’s more to it than that.
And we’re done. Same time next week. You comment now.
