Weekend Personal Finance Review

It’s time for another weekend of round-ups. I’m taking the next two weekends of round-ups off to get married. Because of this I wanted to give you additional commentary for each article that I’ve chosen.

• Ben from Money Smart Life says what he wants for Father’s Day. I found this article probably the most inspirational article that I’ve read in probably two months. Over the few months that I’ve been writing Lazy Man and Money, I’ve been focusing on day to day personal finance things rather than aiming for the original goal of Lazy Man and Money. That goal was to explore ways to escape the rat race – something that hadn’t occurred to me until I read Rich Dad, Poor Dad. I’ve been making progress along that front. However, even though I’ve made more progress than I thought I would by this time, the road is also longer than I believed it to be.
• The Sun’s Financial Diary is moving his money from Sharebuilder to Zecco. Besides a few customer service issues that I’ve read out, Zecco seems to be a great way to save on investing commissions. It would seem to make ETFs a lot more useful for investing now. I would give a try, but I’m more involved with Prosper.com and paying off a home equity line of credit. Oh and that “getting married” isn’t cheap in our social circle either.
• The Digerati Life asks how small of a home you would want to live in. I couldn’t live in the homes of that size forever, but I wouldn’t mind vacationing in one. I would require functional bathrooms and kitchens though.
• Money Matters and More Musing answers a reader’s question about whether it makes sense to quit your job and run a website for income. He gives all the standard pitfalls. I’ve been writing for over a year now and let’s just at this current pace, I’m going to need at least 4-5 more years of this growth before it begins to approach my day job income. And it’s hard to predict that I could continue to grow as much as I have. When you sit down and think about it though, 4-5 years isn’t a long, long time and as long as keep my day job while I build this, there’s some hope. If my projections are off and it takes 10 or even 20 years, that’s still not a bad deal. You have to go into it with a passion though. Perhaps I never get a point where I can simply blog for a living. That’s fine with me too.
• Generation X Finance tells you how you can turn an ugly couch into a new couch. This is the way the Lazy Man would do it. Unfortunately, it’s going to take a lot of luck and not everyone can get a new couch.
• Free Money Finance has an article about retirement income diversification. The possibility of taxing Roth IRA’s in the future is brought up. I don’t think the government would do that without invoking a major coup. They’ve effectively made the promise not to, and in return for following this promise, we (as citizens) have agreed to leave earnings untouched until retirement or face a 10% penalty. If they take the tax break away from us, then why wouldn’t have put the money in a regular after tax brokerage account? Someone brought up the idea that the government changed their stance with Social Security. I think it’s apples and oranges since the government dictates the paying of social security as mandatory, while a Roth IRA is optional. If it changes the rules on social security, everyone takes the same penalty. If it changes the rules on Roth IRA, the responsible savers take a hit? Trust me, heads would roll.
• Even though it is a guest article, I enjoyed this article on real estate agents at Five Cent Nickel.
• Jim at Blueprint for Financial Prosperity talks about the age-old Time vs. Money argument. The slider that he talks about has started to move for me. 5-10 years ago I didn’t take a single vacation, but with my fiancée getting 6 weeks of vacation a year, I find that I value that immensely. However, I do have my price. If someone is willing to pay enough, I’m willing to give more of my time. My theory is simply that if I get enough in a short span of time, I could transfer to part-time job sooner and spend more time then. So yes, if I were required to move away for a year of my hypothetical son’s 7th birthday and it meant that I could likely retire after that, I’d do it. I’d be spending the next few years taking summers completely off so that we could go to a baseball game in every park. Or perhaps we’d go to Europe and do something there. In short, I’ll put myself in a “jail” for a short time to have the freedom in the future.
• Mighty Bargain Hunter says that a mortgage is still a debt that needs to be repaid. He puts up 5 bullet points about why people don’t pay off their mortgage sooner. I agree with most of the reasons. One thing that struck me was this reason “They can do better with their money elsewhere. For some this is true, but for a lot it isn’t.” I don’t really see how this isn’t the case for most everyone – not just some. Investments in a Vanguard S&P 500 over the last 30 years have been 12%. In fact you can go back a lot further than that and get similar numbers – I’ve shown it in too many previous posts to hatch that. I don’t know what the next 30 years is going to be like, and the S&P 500 isn’t very diversified, but I still think it can do a lot better than some mortgages. With the tax brakes that I was getting when lived there, I was paying about 4.11% the mortgage. That’s quite a big difference from 12%, leading to a lot of room for error. Now that I’ve moved away and I’m renting it out, I’m paying more interest, but I still think that the markets are better long term bet. So I’ll slay the mortgage debt monster, but my sword is going to be the gains of the market over a long time.
• Get Rich Slowly was kind enough to include me in the a group of the best personal finance articles ever written. I can’t really write up anymore than that to make you click through. Why stick around and read an average article by me, when you read the greatest from many minds?