Earlier today, Ramit Sethi, author of the book and blog I Will Teach You To Be Rich tweeted a link to his latest post. Ramit is an interesting character. His brash style is a refreshing change from the monotonous tone of most personal finance literature, and he strongly advocates important things like increasing and diversifying personal income. But he is also an unabashed advocate of a “big income / big spender” (BIBS) lifestyle, in which one saves a token amount for retirement and other goals and then spends the rest of one’s income “guilt free” on whatever one may fancy – a philosophy to which I do not subscribe, for reasons I will discuss in a moment.
Archive for the ‘personal finance’ Category
It’s hard to believe that the first month of 2012 has almost come and gone. Personally, the year’s been off to the busiest start that I can ever remember – normally, things ramp up slowly coming out of the holiday break, but for me it was an immediate dive back into the deep end. In fact, this afternoon is the first time all year I’ve had time to take a deep breath and think about things like blogging. I’m working on some interesting post ideas, including a multi-part series on how to manage board meetings that I hope to launch in the next week or two. I’m also hoping that I’ll have the chance to write some about travel (a growing interest) and perhaps include some photography on the blog. For now, though, here’s a sample of what I’ve been reading for the last several weeks:
The US economy is anything but rosy. Unemployment remains above 9%. Volatility has returned to the equity markets. And most famously, S&P recently downgraded US Treasury debt from the top-tier AAA rating to AA+.* Many are worried that another financial meltdown is in the works. And yet, to paraphrase an oft-maligned axiom, this time seems different. In 2008, consumers and corporations were both over-levered. Since then, much has been written about the recovery of corporate balance sheets – Apple alone now has enough cash on hand to buy Goldman Sachs outright with enough leftover to pick up NetFlix on the side – but the working assumption is that consumers remain overwhelmed with debt. Read the rest of this entry »
About a month ago, Forbes ran an article “busting” five financial myths. Generally, stories like these are simply an inversion of the “new, unique money tips” so despised by J.D. Roth of GetRichSlowly fame. However, the first busted myth from the Forbes article caught my eye:
“Dollar Cost Averaging will increase my return.” Sorry folks, dollar cost averaging can make you feel more comfortable about investing into the markets, however there is no evidence to justify the belief that it will increase your return. A primary reason is that the stock market rises more often than it falls so the sooner you have more into the market, generally the higher return you will have. This is particularly true when you are investing over long periods of time.
I can’t believe how much my blogging resolve sucks. After a week with a post every day, I’ve fallen off the wagon and not posted for 10 days. Hence I’ve titled today’s post “back from the brink” – hopefully it will inspire me to get some more real posts up (I’ve got several ideas to flesh out over the holiday weekend) and keep the blog alive. In the meantime, here’s what I’ve been reading: Read the rest of this entry »
I love to read. However, I rarely read books anymore; who has time to get 50 pages into a book and realize that it sucks? (This situation always creates an emotional dilemma for me: do I quit reading and waste the hours I’ve already put in – sunk cost fallacy! – or do I choose to gut it through for the sake of “finishing?”) As a result, most of my reading comes from blogs and other internet sources, a practice that the iPad has facilitated enormously. I use many of these readings as the inspirations for full-length posts; however, on occasion – like today – I’ll share articles that I enjoyed but that didn’t quite make the cut. Read the rest of this entry »
There was a fascinating article in the Wall Street Journal over the weekend about what is undoubtedly one of the stickiest issues in personal finance: how to manage combined financial assets in a marriage or long-term partnership. In the article, the writer describes her frustration with her husband of nine years, whose obsession with the details of their joint bank account leads her to feel that she lacks “privacy and autonomy.” Given that arguments over money are highly correlated to divorce, it’s important that couples find a solution to this issue early in their partnership, and implement it in such a way to make it stick. Read the rest of this entry »