Parents, you know that ethereal feeling you get around this time of year? The lucky childless get to experience it all the time. You might not remember this, but you used to experience it, too. That is, until you decided to forgo freedom and adventure for captivity punctuated with toilet training, intermittent screaming, and conversations about who pulled whose hair and who spilled orange juice on the carpet. Enjoy your 15-mph drive through the school zone this morning. Now onto the good stuff. As always, these are actual blog posts from actual submitters: 

Most personal finance bloggers have a talent for focusing on the minuscule* picture. Rob Aeschbach has gone on record as threatening to induce grievous bodily harm on the next person who points out how much money you can save if you omit a daily Starbucks run. Yes, by all means, count your refusal to buy a $3 latte as a victory while spending far more than that on trivialities that will slowly deplete your wealth.

Matt Becker at Mom & Dad Money argues that the longer you stay invested in the stock market, i.e. the earlier you start, the greater your chance of having returns that are a greater distance from average. Of course that’s bounded by 0 on the lower end, unless your retirement plan consists of nothing but shorting stocks. Also, there’s this thing called rebalancing. You’re allowed to change your strategy in mid-stream.

Things women care about, according to millennia of empirical observation:

• shoes
• compliments
• doing as little math or geography as possible.

Things women care about, according to Free Credit Score™:

• financial responsibility
• dating a man with a good credit score
• (probably) finding Don Robert, CEO of Free Credit Score parent company Experian, to be the sexiest man alive.

Don Robert

Experian conducted one of the most ridiculous surveys in the history of public relations, and Evan at My Journey to Millions is calling them out on their nonsense.

Former employee and current gadabout Harry Campbell has a lot of time on his hands these days, some of which he’s put toward creating a new website. At The 4-Hour Workday, Harry is begging Tim Ferriss to sue him for copyright infringement has discovered that there’s a greater correlation between effort and reward in his current position than there was when he was putting in long hours for a boss.

Joshua Rodriguez at CNA Finance likes to write about himself, and likes to reel you in with a couple of exciting disclaimers. He also likes to write advertorials for Betterment, a company that sells exchange-traded funds to people with as little as $1000 on hand.

On the other hand, Mike St. Pierre at Annuity Rates HQ would have you spend all your money on annuities. Pretty sure our prose in Miss Bryan’s 1st grade class at St. Anthony’s was more nuanced than this:

With aging population (sic) come healthcare growing needs. (sic) Several retirees prefer to stay in their home and require the help of a nurse from time to time. This is a good way to postpone your entry in a retired (sic) home

Modern English originated sometime in the middle of the 16th century. It had a nice long run. Self-awareness has been around somewhat longer, and will be availing itself to Mike any day now.

If you’re new to this, it’s OK to think that dividend investing means “investing in dividends.” It doesn’t, and you can read Chapter VI for clarification. But first read this post from erstwhile bank employee Marie Engen, the boomer of Boomer & Echo. She explains how to get started, and gives the kind of direct, actionable advice that the CoW never seems to feature enough of.

If someone offered to sell you a non-condemned house for $600, you’d have to buy it, right? Even if the paint is peeling and there’s some mold damage, you couldn’t possibly lose, could you? Tell that to the guy who bought such a house in Detroit, and sold it a year and a half later for a $500 loss. Is $100 cheap enough for Pauline Paquin at Reach Financial Independence to jump in? We’ll let her tell the story.

Finally, Jason at Hull Financial Planning puts things in perspective. Unless you live in Equatorial Guinea, you have no justification for complaining about economic hardship in 2013. The poorest among us in the 1st World have riches (and just as importantly, opportunity) at their disposal that the wealthiest of just a few generations ago couldn’t imagine. This is one of Jason’s finest posts, even if it does employ an analogy using some soccer player.

And that’s it. We’re light this week because everyone appears to be taking off the pre-Labor Day week off. Well, that and our constant alienation of most personal finance bloggers. The ones featured today are almost all that remain. Until next time.

*Yes, that’s spelled correctly.

In the 1930s, this was a school. Never underestimate the importance of education.

Time for another edition of the Carnival of Wealth, our weekly roundup of personal finance blog posts both good and rotten. Let’s go:

Mother-and-son team Boomer & Echo return after a pronounced hiatus. They’ve given their site over to Sandi Martin of Spring Personal Finance, at least temporarily. We can think of many sites that would improve if they’d let her take over permanently. Ms. Martin reminds you how dumb you are if you turn your investment advisor into an investment oracle. You need to do your homework first and then ask questions, not throw yourself at the advisor’s mercy and say “Handle this for me.” Especially since investment advisors have an incentive to sell you packages that might not necessarily benefit you more than they benefit the advisors themselves.

PKamp3 at DQYDJ.net (here’s our quarterly reminder that it stands for “Don’t Quit Your Day Job”) eschewed numbers for prose in his objective look at the absurd custom that is obligatory tipping. How can it be “To Insure Promptness” if you’re doing it at the end of the meal? There’s at least one restaurant that has removed gratuities from the diners’ discretion, and likely more to follow.

For our American readers who think tipping is counterintuitive, here’s a tip of our own, in the sense of “unsolicited advice”. Eat in locales that are frequented by foreign tourists, and watch the wait staff drop what they’re doing to embrace you. An example is Moab, Utah, the gateway to Arches and Canyonlands National Parks. You’ll hear more German, French and Japanese being spoken on Main Street in Moab than you will American English. When a local waitress lucks out and finds an American party sitting in her section, she knows she’ll be in for something beyond her standard tip of 0.

New submitter, JW at All Things Finance who explains what bidding and asking are. Hey, everyone’s got to start somewhere. (Bonus: One of JW’s co-conspirators was our February Retard of the Month!)

In defense of Michael Lux at Student Loan Sherpa, he wrote his submission before seeing the piece we posted on Friday. Michael is an attorney who already had an engineering degree before entering law school. For some reason he chose the dark side, but the good news is it came with its own built-in punishment: “a medium sized fortune in student loans,” to quote Michael. His financial advice is curious and sometimes internally contradictory, such as telling students to “(not) be stupid” and then giving them alcohol consumption pointers in the very next sentence. Also, recommending that you use student loans to pay the interest on your student loans (sic) is yet another example of going for the small victory. If you instead enroll in a practical school that you can afford without subsidies, you can laugh at all the overeducated losers in the unemployment line while cashing your paychecks.

Daniel at Sweating the Big Stuff, who’s usually one of our most thoughtful contributors, decided to wind down his limited liability company because of the tax hit it brought on. Which seems rash, seeing as he’s now presumably going to be a sole proprietor and will start paying taxes at ordinary income rates. Make sure you read the comment from Leigh, who must have read Chapter X in The Greatest Personal Finance Book Ever Written and who understands that just because Daniel lives in the business-unfriendly state that is California, that doesn’t mean he has to incorporate there.

Michael at Financial Ramblings barely met the deadline last week, then overcompensated by being the first to submit this week. So we’re placing him firmly in the middle of today’s CoW, and the universe is in balance. Michael discusses when to rebalance a portfolio, and says you shouldn’t be a slave to the calendar. Only fix if fixing is warranted, and stay within 5% of your targets.

Kristen at My Dollar Plan spent 4 seconds cobbling together a 131-word post about how she and her boring husband are saving money for Christmas. You know, that holiday just 4 months down the road. Kristen dared us to run her cocktail napkin scratchings dressed up as a blog post, and we did. Next week, Kristen will share with us one of the notes she placed in her kid’s lunch box.

Mike St. Pierre at the aptly named Annuity Rates HQ is still clanging that annuity bell. Just read his introductory definition of an annuity, then buy one from him regardless of what kind of payments it promises and then we can all go home. This post includes a video that was still loading at press time.

Bryan Chau at Success Pen Pal sent us what we can only assume is his grade-school report on the color green. You read it and tell us otherwise. Bryan gets a C- (needs improvement), only because he spelled most of the words correctly and didn’t make it too obvious that he cribbed several excerpts from Wikipedia.

Something called Buck Inspire offers an audio submission, an interview with financial planner and Iraq War veteran Jeff Rose. SSgt Rose saw combat, came home in one piece, became a CFA and is now writing books. That makes him at least 4 times as impressive as us.

Zero, and you’re a uxorious sap if you argue otherwise. Todd at Fearless Men tells you how much you should spend on an engagement ring, a costly trinket with no value outside of its ceremonial, non-economic one. (Excluding its very real economic value to the jeweler.) Todd goes halfway, at least acknowledging that the prospective fiancée should understand that her betrothed will likely put himself (and by extension, her) into hock should he buy a pricey ring. Why you’d acknowledge that yet still sign off on the purchase, we have no idea. We also aren’t carrying a nickel of consumer debt, so understand that we don’t know what we’re talking about. You need to hear from a debt blogger for the proper perspective on this.

American “energy independence” is another of those meaningless stock phrases politicians love to bust out, like “affordable health care” and “common-sense gun laws.” They frame the terms of the debate before it even begins, and everyone who has a counterpoint to make must therefore be advocating expensive health care or nonsensical gun laws.

The U.S. doesn’t have “food independence” nor “clothing independence”. No one considers it a crisis that your bananas come from Costa Rica and your t-shirts from Bangladesh. So why is energy the one commodity that has to be produced within our borders? Is Alberta Tar Sands oil inherently flawed? This rant is a preface to Dividend Growth Investor’s latest, in which he questions the sanity of Warren Buffett’s right-hand man Charlie Munger. He sees importing oil as something a prosperous modern country does, while Dividend Growth Investor disagrees with Munger’s formulation of his argument.

Much in the same way that fat people don’t know they’re fat, stupid people don’t know they’re stupid. (Yes, there’s quite a bit of overlap.) Harry Campbell at Your PF Pro made the latter observation while explaining his latest discovery: companies will sometimes go to outrageous lengths to keep you happy these days, now that Twitter exists as a forum in which to publicly criticize companies. Calling the customer service complaint line wasn’t quite as fruitful back when the conversation was just between the company and a wronged patron.

Barbara Friedberg suggests 7 ways to make money fast, 6 of which we (and Barbara) know none of you are ever going to attempt. You might sell your junk on eBay, though.

Sandi Martin of Spring Personal Finance is so good she gets to make an encore before we’re even finished. Here’s the best line of this week’s Carnival:

I’ve seen a lot of debt consolidation train wrecks, and about five of them were due to circumstances beyond the borrower’s control. The other 7,256,219 were due to the window slamming shut, either because the borrower didn’t know or didn’t care

Don’t confuse consolidating debt with merely moving it around. But you’re probably going to do it anyway, assuming you were irresponsible enough to have required debt consolidation in the first place.

Finally, the prolific Jason at Hull Financial Planning. (Prolific in the John Creasey sense, not the Travis Henry sense.) Even someone as absurdly accomplished as Jason can think that he’s somehow wasting his time. Jason posts a list of 101 things he needs to remind himself of more often, and does so publicly to doubtless spur himself to even greater action. Years out of the army and he still does more before 9 a.m. than most of us do all day.

And we’re done. See us for a new Anti-Tip of the Day every day, and new posts Wednesdays and Fridays. New CoW next Monday, as always. ‘Til then.

Cue the one-upping New Yorkers telling us how much prettier the rock formations in Lower Manhattan are

CYC has decamped to Central Arizona for the week, and unwittingly witnessed a conversation that segues into our first submission. Laying by the hotel pool, eyes fixed on our Kindles, we overheard the kind of boisterous people that such a milieu seems to attract. A tattooed bro in his late 30s or so, and his fat wife. Conversing – or to be more accurate, interrogating – every person around them.

“So where are you from? We’re from Phoenix.”

“So where are you from? I used to live in Oregon for 6 years, but I was born in California. Then I met him (points to tattooed bro) and now we live in Phoenix.”

And then finally:

“So where are you from? What’s that? Rome? Like Rome in Italy? Oh, no way! Honey, they’re from Rome! I’d love to go to Rome. I’ve never been to Rome. What’s your name? ‘Angela’? That’s a girl’s name in America. Oh, you said ‘Angelo.’ I’m sorry. I thought you said ‘Angela.’ That’s a girl’s name in America. So what part of Rome are you from?* Is this your first time in America? It’s interesting meeting someone from Rome because I’ve never left the United States.”

And that tore it. Again, this was a woman in her late 30s. Not only that, but she had lived in a state that borders another nation and is currently living in a 2nd such state. She also has enough money that she could afford to spend a couple of days at a resort that’s almost as far from her home as another country is. The idea of international travel seemed out of reach for this woman, unlike the crullers and bear claws at the breakfast buffet.

Barbara Friedberg wasn’t there, but she would have shaken her head at this woman’s limited view. Barbara recently traveled to Machu Picchu – a place pool lady probably couldn’t have found on a map – and didn’t vaporize her life’s savings to do so.

Our generation is spoiled to the point that we don’t even realize how achievable international travel is. Your grandmother might have crossed an ocean once, to get here, then never left. But several of our regular CoW submitters have each visited dozens of countries, often paying less to travel to Kigala or Columbo than it would cost to visit Miami. Open your eyes, see how Barb does it, and follow her lead. Or stay insular, whatever.

One of those peripatetic few is Paula Pant at Afford-Anything, who has visited more places than you ever will despite not yet turning 30. Paula didn’t come from money, but she knows how to make it and how to refrain from unnecessarily spending it. (Also how to invest it, but that’s a topic for another time.) Paula forgoes profligacy in some parts of her life (owning an unremarkable car, having roommates) so that she can hop on a plane to Amsterdam or San Francisco without blinking. Largely because she doesn’t squander money. In that respect Paula’s like Trent Hamm, except with a purpose. Well, she also writes beautifully, isn’t obese, is comfortable on camera, doesn’t terrify small children, doesn’t obsess over role-playing games and doesn’t make her own soap, either.

Here, we’ll continue with something cerebral and provocative, keep the dullwits from reading too far. The last baby boomers were born in 1964, meaning that sometime around 2080 they’ll finally, mercifully have gone the way of the Tasmanian tiger.  PKamp3 at DQYDJ.net says it’s inaccurate to credit (or blame) them for every demographic phenomenon, not the least of which is lower participation in the workforce.

For every dozen simpletons whose only understanding of debt is in the form of their monthly credit card balance, there’s one sharp cookie like Pauline Paquin at Reach Financial Independence who understands that borrowing money is almost a necessary condition for building wealth. She borrowed to finance investments and then, trapped in a corner by her conscience and her indebtedness, fought interminably to honor her commitments and keep her investments intact. Pauline says that the debt helped her in an indirect psychological way, too. Knowing that she had to pay back the money she used to finance her investments forced her to drive in a gear that she didn’t know she had.

Our most consistently mysterious contributor is Dividend Growth Investor, a model of efficiency who shares with us every week his** mechanism for building wealth via dividend-paying stocks. Even a company that pays an ever-increasing dividend has some amount of risk in its stock, so how does Dividend Growth Investor go about measuring that risk and working within it? You have to read his piece, but the gist of it is that a $1 drop in the stock price is often less important than a 10¢ drop in the dividend.

New submitter? A college kid who has $15,000 in student loans, is saving up for a $4000 engagement ring and a $5000 “wedding fund”, and who has an emergency fund? Oh, this is going to go splendidly. Jeremy Berretta at My Financial Road has a self-styled “savings problem.” This post is more of that 1st-person singular pronoun confessional stuff we’ve grown accustomed to, the kudzu that stains an otherwise pristine lawn, but Jeremy does have a sense of humor and apparently, some assets. We’ll call him a work in progress. Why he’s going to blow $9000 he can ill afford on a woman who excites his pants is too deep a problem for us to comprehend, however.

Advertising copywriter. Which, for effort rendered, was also the best paying. Harry at Your PF Pro asks his readers, including us, what the easiest job we ever had is.

Evan at My Journey to Millions is a personal finance anarchist, or at least he’d have us believe so from his latest post:

Most people discuss personal finance rules in absolute terms.  I hate it! I truly believe there are almost NO SET PERSONAL FINANCE RULES.  Rather, personal finances are well just that…personal

There are plenty of set personal finance rules, which are basically the antonyms of all the Anti-Tips of the Day we run in the right column. No matter what the endeavor, you need some structure. Beethoven’s worst symphony is objectively better than Train’s asexual caterwauling. Professional football is an institution, while professional dodgeball doesn’t exist. Organization even carries over to crime: Mafia dons lead better lives than street punks do.

Michael at Kitces.com discusses Monte Carlo retirement projections, the response to a previous generation’s less sophisticated insistence that the path to retirement follow a well-defined line. Instead, offering a range of possibilities with corresponding likelihoods makes far more sense.

Finally, Man of the World and chronic overachiever Jason at Hull Financial Planning reminds us that we’ve hardly touched on annuities in the too-long history of CYC. Yearly fixed sums for life? To paraphrase Jason’s synopsis of his own work, Dr. Wade Pfau, CFA recently published research showing that it’s possible to mathematically replicate or improve upon overall net worth performance of annuitization through increasing stock holdings a few years after retirement. But, as [Jason and CYC] have discussed, personal finance isn’t all about math. Research from RAND and from a longitudinal study of retirees in the UK shows that retirees who have annuities and pensions, all other variables held equal, are happier than those who don’t. So what’s the psychology behind why it’s better to make a slightly mathematically suboptimal decision in purchasing annuities (SPIAs or single premium deferred annuities only…don’t want to line salesmen’s pockets) than to take a crack at leaving behind a little more money the Pfau way?

Hold everything: one more. Apparently Wade Pfau’s been a common topic among our more enlightened submitters. Michael at Financial Ramblings shows the calculations behind Professor Plau’s work that suggests the optimal savings rate for a worker who wants to neither defer too much spending (thus being overly frugal in the present) nor have too little saved for retirement (i.e. too much life at the end of the money.) Not only that, but that optimal savings rate is calculated to 2 decimal places.

Thanks again. We’ll be back tomorrow.

*Which hill, you mean? Who cares?
**That he’s male is about the only thing we know about him.