Lazy Man and Money

Best posts on Lazy Man and Money from Nov 2008

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I can barely keep up with the blogs I read. Or perhaps you are as Lazy as I am and only come here ever so often. In that case, here’s a quick recap of the top posts from the last month:
  • Ask The Readers: Evaluating a Gym Membership
    Posted on Monday, November 17th, 2008 in Health – Views: (1638)
    A few years back, I had a gym membership. I always wanted a place where I can go and lift some weights do a little treadmiling… you know the stuff that I don’t nearly write often enough over at Lazy Man and Health. When my wife and I moved into my current apartment complex I noticed that they had a free gym. It’s not great, but it has 3 cardio machines and a couple of weight stations.
  • Matt Furey: 101 Ways To Magnetize Money
    Posted on Tuesday, November 18th, 2008 in Book Review – Views: (1120)
    Publishers send me books all the time. When I decide to read a book, I earn my Lazy Man moniker by choosing the thinnest book in my pile. Today that book is Matt Furey’s 101 Ways To Magnetize Money a book that you may be able to through in about 60-90 minutes.The first few tips are about putting your mind in the right frame of mind – the power of positive thinking. I think you take it a little too far by leaving reminders like index cards around the house as suggested, but who am I to say.
  • Save Money and the Enviroment at the Same Time?
    Posted on Tuesday, November 25th, 2008 in Health – Views: (875)
    As I write this, it’s Friday night and since I tend not to have a life, I just finished watching Nightline. One of the more interesting segments was about how a group of moms limit their waste to one canof garbage a year. Specifically they had the moms from Enviromom on the show. They admitted that one can of garbage a year is a little aggressive for a beginner, but that one can a month is possible.
  • Five Thoughts To My Future Children…
    Posted on Thursday, November 13th, 2008 in Deep Thoughts – Views: (796)
    I got the latest edition of Money Magazine yesterday, and Pat Regnier in his The Bottom Line column used the letter to his children as a literary device. It’s not unique (I’ve even written a letter to my high school self in the past), but nonetheless, I thought the idea was worth stealing flattering Mr. Regnier with my own letter to my own children. [Note: I probably wouldn’t use bullets and bolding in a real letter to my children, but I think you’ll find it easier to read.
  • Our Early Retirement Plan: Introduction (Part 0)
    Posted on Monday, November 3rd, 2008 in Retirement – Views: (785)
    I thought I’d switch things up this week and write about our retirement plan for the future. It’s going to be detailed, so I’ll have an article one day each week. I need to get a few things out of the way:Retirement planning at age 32 is a shot in the dark – Unless you really have tons of money it’s hard to plot a course for where you might be in 10 years. You think you have a plan and something could speed up the target date or slow it down right in a hurry.
  • Oils Well That Ends Well
    Posted on Friday, November 21st, 2008 in Investing – Views: (782)
    I’ve been really surprised that the Dow Jones industrial average continues to drop. The last time it dropped to 8,200 I thought it would be the last chance at those prices. As I write this, the mark is at 7,500 and some indications seem to say that it could go even lower. Despite that, we’ve been buying some index funds with our Zecco account. Specifically we’ve been picking up Vanguard Total Index (VTI) and Vanguard All-World Ex-US (VEU).
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Am I Wasting My Time?

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I got the September issue of Money magazine yesterday and, as always, there are a few eye-opening articles. Every time I feel like I know everything about personal finance, I find that there’s so much I have left to learn. One particular article, on page 24 is titled, “Why You Can’t Teach Money.”

The article is a Money magazine interview with a law associate professor from Loyola… not economics or finance that you’d ordinarily expect. She “specializes in financial product regulation” according to the article. With that background let’s get to the interview… I’m going to paraphrase it, for (a tiny bit of) humor and to avoid having to quote the magazine article in full. I suggest anyone interested buy the magazine and read the article in it’s exact form – rather than my interpretation of it.

Q: Why is financial education so bad?
A: It’s terrible in so many ways. The people who sell financial products pour in major Benjamins to get consumers to buy their horrible products. This marketing negates any education that others might give. Financial products change all the time and educators can’t keep up. “As far as I know, people get pregnant the same way the did when I was in high school.”

Lazy Man’s Take: I like to think that a good number of people get knowledge that supersedes marketing. I have read a lot of personal finance blogs and financial magazines that give me very sensible evidence on why low-expense, index investing works. It has prevented me from buying more expensive financial products. I’m just confused at the pregnancy parallel – I really don’t see the relevance.

Q: Isn’t Budgeting (and other basics) fundamental?
A: It’s a waste of time. Studies show that high school personal finance classes or adult retirement classes don’t help – it may hurt. Those classes give people false hopes that they can manage their own finances and “they end up making worse decisions.”

Lazy Man’s Take: I think this lawyer is biased towards looking at financial product regulation, her specialty, and not personal finance. There are a number of people who learn to make very solid financial decisions (which I realize is hard to define), by educating themselves – and getting education from other people. If you are reading this right now, there’s a good chance you fall into that group.

Q: How now, brown cow? (My mom’s way of saying, “Where do we go from here?”)
A: Give up on teaching people to plan their finances. Try to show people that there are charlatans out there trying to sell you financial products. Politicians need to regulate financial products and change them into things that help consumers rather than educate them.

Lazy Man’s Take: It seems like the best way to get people to realize that there are charlatans out there is to teach people to personal finances. I hate to depend on politicians to do anything for me – especially when I can do them myself.

Q: So How Should Politicians Regulate?
A: People who sell financial products should be required to offer you a safe default product. If you apply for a 50 year, interest only mortgage, you would have to be offered a 30-year fixed option

Lazy Man’s Take: I’m not sure how that would help. It would be very easy for a mortgage lender to show how lower payments for the exotic mortgages are “better” than the higher payments for a 30-year fixed. If people were educated to know the difference… oh wait, you can’t teach people money.

Q: So I should stop teaching my child about money?
A: No, that would be crazy, especially with their daily spending. Children should be taught to resist buying things that are not good for them – happiness is not bought. Families can teach that better than the government can.

Lazy Man’s Take: Whoa… so it’s suddenly okay to teach budgeting again? Just three questions ago it was a waste of time to teach children. I believe that children can learn some things better than adults (language as one example), but I’m not convinced that money is one of them. If you can teach children to resist buying things that are not good for them (i.e. happiness can not be bought), then shouldn’t you be able to teach adults these things?

Is personal finance education a waste of time? I can’t believe that. I can’t believe that education is ever universally a waste of time.

Money Magazine July 2008 Highlights

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When I was going through my mail last week, I noticed something interesting. It seemed like I got a flier that was thicker than usual. Wait, it was this month’s Money Magazine. It feels like the slimmest edition of Money Magazine I’ve seen… yet, I happen to have the July 2007 copy handy and they are both the same 128-pages. So much for my conspiracy theory that advertisements were down and Money Magazine might be undergoing some financial issues of their own. Either July is just a light month in general or I’m just crazy thinking this copy was thin.

Anyway, here are some of the highlights from this months issue. If you have a copy, you can follow along with me. If you don’t, here are some of the things you might be missing.

– Save money on drug prescriptions with the advice on p. 19. The hint: go shopping at Wal-Mart.
– Women want to talk more about money (p. 20). True.com survey says that 33% of women want to talk more about money while only 21% of men do. This goes against almost every female I know who would rather have a root canal than talk about money. My wife fits in that group. What do men wish the talked more about… big suprise, but it’s sex.
– Frank Boucher, certified financial planner learned he could save money on baseball games by bringing his own food (p. 20). He could have learned this months earlier if he read my article on Saving Money at Baseball Games
– It’s only a good idea for a select minority to get the $100 unlimited cell phone plans that some providers are making available. (p. 26)
– Jean Chatzky says driving a little greener can save you money on gas (p. 28). Five Cent Nickel found out the same thing first hand.
– Interesting article about taking care of your finances for couples always on the run (p. 33). Maybe it’s just me because I’m experienced, but much of my finances take care of themselves most of the time. Online banking shifts money into almost all the right places. I pay credit card bills online, but I have a back-up set up with Chase so that they would get paid in full if I forget. About the only thing that I remember is to write the rent check.
– The Right Way to Take a Pension (p. 40). What’s a pension ;-).
– Are you paying your financial adviser 3% (p.44)? It seems that many are. This is one reason why I spent time to learn to invest myself. By limiting expense ratios and diversifying with exchange traded funds, I often pay closer to 0.5% in expenses. That adds up to a lot of money compounded over the years.
– Walter Updegrave says that your retirement number is a moving target. I came to this conclusion with my My Ever Expanding Retirement Goal.
– Inspiring entreprunal highlight (p. 53). I love reading about people starting their businesses and the troubles they have with them.
– How do you protect your idea from being stolen by a big company (p. 53). I’m surprised to see that it doesn’t mention anything about writing out your idea and sending it to yourself via certified mail. You’ll get a date stamp on the sealed envelope. If it has to go to court, handing the judge the envelope should be great evidence.
– Learn how artificial materials can be better than the real thing in your home (p. 62-64). If I was to redo my home, I would definitely heed all these suggestions. It looks like they’ll last longer and in some ways cost less to begin with.
– Invest globally with one fund (p. 69-70)? I say no, but I like reading about investments. You might not be like me.
– Invest in networking companies (p. 78)? Is it 1999 again?
– Six pages on Inflation (83-89), this is a major article in the issue. This is one my biggest financials fears. If I had to guess it’s probably yours as well.
– Pages 91-95 – Feature on People Living Without Plastic… This was the article that featured two personal finance bloggers I previously mentioned.
– Do you know your spouses finances? This a 5-page feature.
– College Loan article that I won’t read from pages 102-105
– Page 106 – OMG, full size, close-up picture of Suze Orman… If I had a mustache like the one she’s showing, I wouldn’t allow a close-up like that to be published.
– Page 107 – This Suze Orman article is the first one I’ve read of hers that was good. Check it out.
– A family looking for a simpler life quits their high paying jobs and moves out to the farm. What about their finances? Page 109-113
– Looking for a Home Security system? See the review on page 115-117.
– Getting a lightweight PC? Look for the round up on 118-119. They left out my Asus EEE.
– The last page is an article on carbon offsets. I didn’t find it that interesting.