Advanced Personal Finance

Sometimes I get carried away on this blog.  I fall into the trap of living in a narrowly defined world.  I read lots of personal finance blogs and the Wall Street Journal.  I think about money too much and other topics not enough.  I sometimes fail to step away from things I’m comfortable with and look past alternative views and new areas of interest.  Of this I am guilty.

All the information about writing blogs tells you to stay on topic and write great content.  If you do that, people will read what you write. 

Stay on topic. 

The problem with that is you begin to focus too much on your topic.  You think too much about personal finance, or politics, or cats, or your kids - whatever it is you write about.

So I read personal finance blogs too much and other topics not enough.  And sometimes I come upon a post in a PF blog that really gets to me.  And when I say “gets to me,” I mean “drives me nuts.”  Today I read such a post.  It was a post on All Financial Matters written by a semi-regular contributor who has her own PF blog.  Almost invariably when I read something by this author, I disagree.  Sometimes I disagree vehemently.  This was such a time.

When writing elicits a strong emotional response, it is the definition of good writing.  I have to concede her that - she gets an emotional response from me most all the time.  Good for her.

The subject of this person’s post is how many people her age are “dumber” (her word, not mine) than previous generations.  Her proximate concern is financial, but she extrapolates how these “uneducated” and “ignorant masses” (again, her words not mine) signal the end of American greatness.

This, in a single word, is crap.

Maybe, just maybe, “every single one of [her] friends and peers” that are so ignorant of how to calculate compound interest place a higher priority on things other than getting rich.  Maybe, instead of teaching their kids the beauty of the all-important dollar, these people are more focused on teaching their kids to be good people.  Maybe, just maybe, these poor, stupid fools not maxing out their Roth IRAs are living presently.

In this blog, and in my conversations with friends and family, I have been guilty of being preachy.  There’s a fine line between educating and being a jerk and I’ve crossed it numerous times.  I apologize.  If you read the comments on the AFM post, Jeremy of Gen X Finance seems to get it right better than me.  He didn’t cross that line when he spoke to someone he came in contact with on the subject.

So here’s the news. 

America’s kids aren’t all going to turn out to be indulged dullards.  The US economy won’t turn into a flaming wreck.  Gold isn’t going to $10,000 per troy ounce.  Old people aren’t all geniuses who are brilliant with their money.  Lots of kids know how to read and can do advanced math, and some of them are even American kids.  And video games, iPods, and cell phones won’t bring down the Republic.

It’s not “The End of the World as We Know It.”  Get a grip.

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I just discovered a great plus side to the inflation we’re all experiencing (well, the inflation regular gas and grocery-buying people are experiencing) - easy weight loss!

I’m nothing if not predictable.  A couple of months ago, I was on a business trip for about a week.  I generally ate dinner at the same couple of places every night.  Moreover, I ate the same thing each time I visited each respective restaurant.  Like I said, painfully predictable.  (To the good, I didn’t ever have the same waiter or waitress.  That’s something, I guess.)

Flash forward a couple of months and I go on another trip to the same place.  I noticed something interesting when I went out to dinner.  The prices were the same, but the portion sizes had shrunk noticeably.  Not just at one restaurant - at all of them.

I guess it’s a nice side-effect of inflation.  Food costs are rising rapidly, which puts a double hurting on restaurants.  People are eating out less because they’re having trouble filling their own pantries and gas tanks.  Compounding the problem from the restaurant’s point of view is that they have their own food cost worries.

It’s an easy weight loss plan for the millions of Americans who don’t eat at home each week.

On a somewhat related note, I read that childhood obesity isn’t as bad as had been previously reported.  It turns out the rate of increase since 2003 has slowed.  Hey, great!  The US has plateaued at only 32% of little kids being overweight or obese.  That’s awesome news.  Kids still have it over adults in the US, though, since 66% of adults are overweight or obese.  Something to aspire to I suppose.

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With a mortgage loan bailout package making progress through Congress, I wanted to post a letter in response to an editorial from the Wall Street Journal:

“I purchased the small house in which I currently reside in October 2001.  I did my homework to figure out how much house I could afford and the sacrifices I would need to make to pay my mortgage and other expenses related to owning a home (oil, gas, etc).  I read my mortgage documents and knew exactly what I was getting into.  I didn’t treat the equity that I had in my home like an ATM and have never missed a mortgage payment.  Where do I go to have my mortgage balance adjusted by the federal government?

Matthew J. Meehan, Lake Grove, NY”

This guy nailed my thoughts exactly.  And he writes way better than I do.

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In the past two days, there have been two very important court rulings you should know about.  The first involves US currency and the second involves municipal bonds.

Yesterday, the US Court of Appeals DC circuit upheld a lower court ruling saying the US Treasury is violating the law by maintaining a currency that is not easily distinguishable to the blind.  If not overturned on appeal, this would mean America will have to redesign its currency, probably varying the size of the different bills.  While I don’t have a problem with that, I think many Americans would.  After all, despite the fact that it costs more to make a penny and nickel than they’re worth, a large majority of Americans still want to keep it.

The second important ruling came from the US Supreme Court.  By a 7 to 2 margin, the Justices struck down a lower court ruling that municipal bonds violate interstate commerce.  What that means is that muni markets can continue to function as before.  The lower ruling had threatened to shut down the widespread practice of states not taxing municipal bond income.  Even if you have no munis and no interest in them, this ruling is important because the lower court ruling would have significantly changed bond issuance in total.

That’s all for now on the law front.

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Here’s one from the ‘news you can’t use’ file.  Zimbabwe, home of 165,000% inflation, recently issued a $500M bank note.

It’s worth about $2 US dollars.  Oof.

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