I heard something on the radio this morning that got me fired up. It was a segment about tips on how to save more money. What came was a predictable list of “brew your own coffee,” “buy generic products,” and “bring your lunch to work!”
I can’t stand these lists. I think they’re dangerous, because the average American’s dismal financial state has little to do with coffee, name brands, or lunch. The people writing these articles mean well. But they’re the equivalent of telling a drowning man how to dry his clothes — advice that seems helpful but misses the bigger problem.
I like to believe I’m a smart man, but when my company started talking about its benefits packages, I think they just assumed I knew what all of these things were. I don’t even remember what I agreed to, cause I didn’t know what the hell I was talking about.
Although I’m not sure a 5-year old would understand this, you could do worse than reading through this reddit thread if you want to understand the difference between investment accounts.
Check out this TED Talk with Shlomo Benartzi titled “Saving for tomorrow, tomorrow.”
Although the video is about setting aside money, watch how he cites an example of changing from opt-ins to opt-outs in the name of a common good. Germany’s 12% organ donation rate is minuscule compared to Austria’s 99%. The difference is that in Germany citizens opt-in to the program. In Austria citizens opt-out.
Austria looks progressive here, but it didn’t sit well with me. I don’t want someone else making decisions for me. Germany’s 12% actually WANT to be organ donors. Austria’s 99% just didn’t look at the fine print.
The intentions are good, but with savings and organ donation I don’t want to opt-out. I want to opt-in. I want to explicitly make that decision for myself, not be the victim of someone else’s good intentions.
When marketers at companies do things similar to this people waste no time saying how unethical it is. How are opt-out retirement plans and organ donation wishes any different?
There are three people who are glad they didn’t read this.
That is a daunting task that I would say 80% of professional players never make. Their marriages dissolve. Drugs and alcohol problems. Many of the players I played with or against are destitute now. Sometimes the players are so bad the teams have to bury them when they die. Sports Illustrated did an article, I guess two or three years ago, about 80% of the guys, once they leave the game – professional players – seven, eight years after they leave the game they’re broke.
…You could imagine today how players – we should fly commercially, we stay at Holiday Inns. Today these guys stay at the Ritz Carlton, Four Seasons. They have their own private plane. They’re making millions of dollars. So how do you come down from that? How do you make the transition from that, after you’ve squandered your money?
I would think no, because it teaches kids that there’s no satisfaction in learning other than making money. I think that’s a good way to teach them to be miserable their whole lives.
I went to a gas station that charged 10-15¢ more per gallon if you used a credit card. Turns out that that’s the regular price and you get a discount for using cash…?
Adam Koos, a Certified Financial Planner (CFP) and president of Libertas Wealth Management, sees generational differences play out in his office every day. He falls into the Gen X age group, himself, and sees a big difference in where he started out and where Gen Y and later generations start out. Immediately following college, he had less than $20,000 in student debt, while he has successful Gen Y clients who have more than twice that amount. He calls the age group “Gen Why?” because “Why would we invest?” They’re young and too busy paying off college loans.
I’m glad I went to a state school.
Sometimes I wonder if one reason the country has an obesity problem is because the most budget friendly meals include lots of carbs.
Trent Hamm’s book, based off his website of the same name, isn’t so much about finance, investing, and saving for retirement, but about creating the proper mindset to get the most out of the things that financial independence will allow you to enjoy.
Includes what I believe to be good advice, like this:
Do not borrow money from family or friends to pay off high-interest debts. Borrowing money from people you love puts a completely new dynamic on the relationship, adding a lender-borrower relationship to the mix.
Experiences always trump things. Experiences do not require maintenance. They do not take up space in your home. They stay with you in your heart. Fill your life with experiences. Chase the things you’ve always dreamed of doing, and leave the things on the store shelves where they belong.
As of this date it’s $2.69 for Kindle.
If you’re interested in something with more meat in it, I’ve heard that I Will Teach You To Be Rich is pretty good.
When companies file for bankruptcy it’s a strategic move to get a handle on their finances. When people file for bankruptcy it’s an embarrassment.
If you use a debit card this makes an excellent case for why you should just use a credit card instead.
So, what are the downsides to debit cards? Well, first off, they’re a direct link to your checking account and your money. I don’t like anything that has such a direct connection, which is why I don’t carry a checkbook anywhere, ever. If the card is stolen, or otherwise compromised, then the money that’s at risk belongs to you, not a credit card issuer. That’s just the first reason, and there are many more…
Tom Service on the fine line between financial support and the creative arts.
…there’s a more dangerous side to this argument, too. The thing is: to lament in perpetuity a lack of funding is to assume a direct correlation between cash and creativity. It’s as if the index, the quantitative measure, of how vibrant the arts are in this country is to be found in how much money they receive from government, or from the Arts Council or equivalent. That’s balderdash.
This Forbes article provides 10 things you could do to provide a financial safety net for your kids.
I don’t have kids, but I bet that if you’re in your 20s you’ll find some of this advice helpful, particularly starting a Roth IRA and not spending so much on a college education.
My conspiracy theory is that finance and investing is intentionally complex to keep those who don’t understand it from participating and to help those who do participate profit off of those who don’t understand it. If there isn’t some kind of book for teens and 20-somethings about how to best save and spend money there really should be.
Mintlife on spring cleaning your retirement portfolios:
If you’re single, your investing life is that much simpler. But don’t you long for someone to practice asset allocation with in your twilight years? Don’t answer that.
For recommendations, I turned to certified financial planner Allan Roth, author of How a Second-Grader Beats Wall Street and writer of the Irrational Investor blog. You only need three funds, says Roth:
- A US stock index fund
- An international stock index fund
- A total bond market fund
I wish I was gooder at these kinds of things.