The Inflation or Deflation Song... Literally...

I saw this first on the Finance Professor blog. Very funny. I am squarely in the inflation camp myself. I swear this guy sounds like Kermit the frog when sings. Not green though...

Enjoyed this post? Please consider subscribing to Money and Such by free RSS Feed or by email. You can also follow me on Twitter.

One Line Answers to Personal Finance Questions

Every once in a while I go through the search terms that people use to get to Money and Such. Most are typical personal finance terms such as 401K or investing in stocks, but some are really good questions while others are truly bizarre. When the mood strikes - and it just did - I like to take some of these search terms and give one line answers in response. Not all the answers below are what you would call serious. Hopefully you can figure out which ones are which...

Here goes:

"Do you pay money for old furniture?" - Some people pay LOTS of money, especially if the furniture is REALLY old. They call them "antiques"... go figure.

"How safe is the stock market?" - It's not, but it's probably your best shot at a decent return over the long term (as in DECADES).

"Why is money worst?" - Sprechen ze english?

"When is the best time to quit a job?" - Tuesdays after tea time are generally considered appropriate. Wednesdays between 2 AM and 4 AM are generally frowned upon.

"Should executive salaries be capped?" - No, executive salaries should not be capped. Only populist law makers consider this a smart move.

"Saving is bad" - Definitely. In Bizarro world! Oh, hold on, are we talking about endangered species here?

"My assistant is making more money than me. How can I make more?" - Seriously? I would say you have a good case for asking for a raise...

"Is this a good time to re-balance my 401k?" - There's no such thing as a good or bad time, just be sure you re-balance according to a predefined schedule and don't time the market.

"Is the iPhone worth the monthly bill?" - HELL YA! It's the best phone I ever had.

"How much should I waste in rent?" - As little as possible...

"Sentence to ask for raise" - "Could I have more money, please?"

"Can money buy happiness?" - Some people think so.

"Do I need an automatic re-balance in my 401K?" - you don't need it, you can re-balance manually, but automatic is nicer. It's the memory thing, you see.

"Working in a law firm sucks" - Oh, yes it does. From experience. I also find that working in a law firm tends to put you in contact with a lot of difficult people.

Enjoyed this post? Please consider subscribing to Money and Such by free RSS Feed or by email.

Car Trouble, Still Worth it

If you have been following my Twitter posts - and why on earth would you want to do that? - you may know that last Friday, on my rushed way to the Supermarket to get my lunch between two meetings, my good ol' Geo Prizm 1997 decided to die on me. Well, die is a little bit of an over statement, as you will see, but as I was standing at a light I felt a sudden "THUNK" (yes, it really was a "THUNK") and the check engine light came on.

Of course, I immediately thought the gal was finally dead, and pulled over to the side. I called one of my colleagues who knows about these things and he recommended I drive the car a few hundred yards to his mechanic. While I waited for him to come pick me up and show me the way, I called my wife and immediately threatened that if this was a big bill fix-up I was going to donate the thing to NPR (I have been meaning to pledge forever and one of these days I am sure to get a call from Ira Glass). Being the voice of reason that she is, she basically told me to shut up and see what the mechanic had to say.

Ten minutes later I was in the shop, and 20 minutes after that I had the diagnosis. Basically, I needed a big tune-up. One of the cylinders was misfiring. That and a few other fixes for a grand total of $400 (it's California) and by the end of the day the junker was running as good as old again. I have no complaints. I drive exactly 12 miles a day. Seems like a waste to buy a new car for that. That doesn't mean I am not going to complain about my jalopy every once in a while. As the owner of a crappy old car, I feel that this is my god given right!

Moolanomy recently wrote a post about preparing for and dealing with a car breakdown. For me, it's all about having a cell phone and the number for AAA. And if you car really sucks, the number for AA.

Enjoyed this post? Please consider subscribing to Money and Such by free RSS Feed or by email. You can also follow me on Twitter.

Economists vs. Real People

This is an old joke, but I find it both useful and amusing:

A normal person walks down the street. He sees a $100 bill laying in the street, he picks it up and continues on his merry way. An economist who sees a $100 bill laying in the street continues to walk knowing full well that the market is efficient and if it truly was a $100 bill someone would already have picked it up...

In other words: not all experts know what they are talking about; and sometimes things are really what they seem (except for when they aren't, of course...).

Enjoyed this post? Please consider subscribing to Money and Such by free RSS Feed or by email.

Career Advice: 30 Rock Style!

In last week's season premier episode of 30 Rock (which you can watch here) Alec Baldwin's character, Jack Donaghy gives career advice to some low levels employees at GE. I am paraphrasing a bit, but bear with me:

Jack: "You should always dress for the job you want, not the job you have."

Low level employee: "Great advice! Starting tomorrow I am coming to work dressed as a Mexican wrestler!"

Hey, it's solid advice. I don't know about taking it to the extreme like that, but you get the picture.

Seriously, you gotta love that show. It is one of the best comedies on television today. Another fun bit (again, I am paraphrasing):

Jack: "Are you going to close down GE?"

Devon: "It's only G now, I sold the E to Samsung. They are now called Same Sung."

High Return Investments

A colleague sent me the following investing strategy yesterday, and I figured I would share is with the world. Seems reasonable to me:

"If you had purchased $1,000 of AIG stock  one year ago, you would have $42 left. With Lehman,  you would have $6.60 left. With Fannie or Freddie, you would  have less than $5 left.  

But if you had purchased $1,000 worth of  beer one year ago, drank all of  the beer, then turned in the  cans for the aluminum recycling REFUND, you would have had $214.  

Based on the above, the best current investment  advice is to drink heavily and recycle.

It's called the  401-Keg..... " 

If you needed an excuse, you got one now...

Personal Finance Questions: One Line Answers

The other day I was going through my Google Analytics page to see what kind of key words bring folks to Money and Such. Actually, there are some pretty interesting ones, so I thought I would put a whole bunch of them in one post and give a one line answer to each (OK, sometimes I may go a little longer than a line, but take it in the right spirit). Here goes:

"Is renting a waste of money?" - Absolutely not. Renting is often a more lucrative form of investment than owning a house.

"Does a hybrid [car] make sense?" - that depends. How much do you drive? You can use this calculator to figure it out for yourself.

"Wife makes more money" - good for you! Now you have more money to save, invest and spend. Enjoy!

"I make more money than my husband" - Are you the wife of the guy from the previous question?

"$10,000 and a year to invest, what to do?" - with a 12 month investment horizon, I would just go with a high yield money market account or CD.

"Am I going to make money in Fidelity mutual funds this year?" - let me gaze into the future for a sec... the spirits... they are saying... "MAYBE!"

"American express late payment, what to do?" - fight it, dude. Of course your chances of success depend on the exact circumstances of your case.

"Average cost to raise twins, calculator" - I don't have a calculator for you, but I do have twins, and all I can tell you is to get ready for some serious money drainage.

"Blowing off a headhunter" - why would you want to do that? Work with headhunters. If you don't want the job, suggest a different candidate. You never know when you would want to take advantage of their services.

"Can I leave a law firm job after one week and not cause damage to my career?" - Absolutely. In fact, if you just joined a new firm it is very much OK to leave, professionally, if you don't feel the position is working for you. In the long run, it will be good for you and will be good for your firm.

"Can I opt out of my company's 401k plan?" - yes you can. However, if you opt-out, make sure you have another plan for saving for retirement. If your employer matches 401k contributions, opting out is probably a very bad idea.

"Can you get a work out with Wii boxing?" - you better believe it!

"Cost to raise a child in the US" - I got data galore for you. Check it.

"Do we get taxed on work related expenses?" - no, we don't, thank god. In fact, if I am not mistaken you can deduct unreimbursed business expenses on your return.

"Does cashing in your 401k hurt your credit?" - nope, but it does hurt your chances of a decent retirement... don't cash in your 401k unless you absolutely have to or if you have actually retired. By the way, rolling over a 401k is not the same thing as cashing it.

"How can I put my IRA in a high yield CD?" - well, there are CD IRAs out there. They just happen to be the worst retirement vehicle ever invented, unless you are just about ready to retire - and even so, I seriously doubt this is a good strategy.

"How much do index funds overlap?" - that depends on what the underlying index is. If index funds track the same index they almost certainly overlap to a very large degree. Some index funds can be totally divergent since they track completely different indexes. Check each prospectus to be certain.

"How much should I pay my stay at home wife?" - dude, you have bigger problems than trying to figure out how much to "pay your wife". Your wife doesn't work for you.

"How to bail out financial institutions?" - boy, I hope that this question was not asked by Treasury Secretary Henry Paulson... well, actually, financial institutions fail (like other businesses) when their liquid assets are not sufficient to cover their immediate obligations. Bailing out a financial institution typically involves either giving it a nice cash infusion or taking control of some of its liabilities.

"How to find my 401k money?" - If you lost track of your old 401(k) money, a good place to start looking for it is to contact your old employer.

"How to make money as a pediatrician?" - hmmmm. Maybe you can take care of some sick kids and charge people for it?

"Labor unions - good or bad" - both, I guess. Good for protecting basic workers rights and ensuring people receive a decent wage for their work. Bad any time they do things that make life difficult for everyone else.

"Stupid advice" - I can see why you got to my blog. I am also mildly insulted.

"What not to waste money on?" - things you don't need. See the previous question.

You Mean I CAN'T Be a Pediatrician?

Madam X from My Open Wallet just shattered my dreams. In one fell swoop she basically told me that I can't be a pediatrician, airline pilot OR nurse anesthetist! Seriously, what's left?

Are you sure you don't want me to fly your plane on your next cross country flight? I have been practicing on my PC flight simulator. Honest!

Talk About Tightwad Bankers...

NPR featured a report earlier this week about a bank located in Tightwad, Missouri... Quite predictably, but funny nonetheless, the bank is called Tightwad Bank. Being the skeptic that I am, I had to go and look up the bank myself and it appears that Tightwad Bank is a reality (or an elaborate hoax).

A quote from the bank's website:

"Tightwad, Missouri is a village in Henry County, Missouri, United States. The population was 63 at the 2000 census. The town was so named a century ago, allegedly over an incident involving a postman, a grocer and a disputed watermelon."

Hmmm... a disputed watermelon. Really?! I would love to know the background to that one...

Actually, the quote is pretty much the entire website. It looks like those guys are so miserly that they haven't even bothered with setting up a proper site yet. However, the NPR story claimed that the bank was a real one and even featured an interview with the bank manager. Amusing.

In other news, this week's Carnival of Personal Finance was hosted by No Debt Plan and includes my post titled: Every Meeting is a Job Interview.

Safeway's Lucerne Yogurt Downsized But Price Unchanged

A few days ago I noticed that Safeway's Lucerne store brand of yogurt had a brand new package and look and sported the words "New smooth and creamy recipe". What I didn't notice until my father-in-law pointed it out this weekend is that the new yogurt container is also 2 oz. smaller than the old packaging. Of course, Safeway did not change the old price - effectively increasing the price per ounce by 33%... I was planning a large post about this, but JD of Get Rich Slowly beat me to the punch yesterday. Darn, I got scooped.

What Safeway did is not fraud, however, it clearly misled customers like me who have been buying the product for years and did not notice the change. Essentially, they pulled a fast one on us. There should be a law that requires manufacturers and retailers to clearly state in bold letters on the packaging if they decrease the product size from previous levels . The language should be simple and clear, something like: "warning: container now smaller". God knows they shout it out from the roof tops every time there is a slight increase in the size of the package. They should be required to do the same when package size is reduced. Specifying the new size of the package on its own is not sufficient, since consumers do not have a frame of reference unless they happen to remember the size of the old container (and who on earth does or can?). The only reason my father-in-law noticed the difference is that a new and old container were sitting next to each other in our fridge.

Anyway, I think that instead of its "new smooth and creamy recipe" tag line, Safeway could have chosen a more imaginative description, so I thought I would suggest a few ideas:

"Now more expensive!" - OK, unimaginative, but factually accurate.
"It's now richer, but you're not"
"There's one born every minute, and your number is up"

Let me know if you have any good new tag lines in mind. Maybe we can get Safeway to adopt one of them...

Fortune Cookie Finance

Yesterday a fortune cookie gave me financial advice. I went out to lunch with a customer at a Chinese restaurant. When the meal was done I claimed my fortune cookie and here is what it said:

“Perhaps you’ve been focusing too much on saving”

I also found out that my lucky numbers are 15, 10, 16, 28, 35 and 36. Hmmm.
I don’t know how I feel about getting financial advice from a baked good, but I think that good advice is something you want to use, no matter where you get it. Have I been focusing too much on saving? It’s possible. I am a personal finance blogger, after all, and if I were too focused on saving that probably would not come as a shock to many. But how can I tell if the criticism is true?

Let’s start by examining the facts. My wife and I save about 17% of our gross income. We don’t go crazy spending huge amounts of money, but I don’t feel like we are depriving ourselves of anything. If I have a burning desire to buy something, I buy it. OK, there is one big ticket item that I have consciously decided to not purchase and have had some second thoughts about, but overall I feel good about our consumption to saving ratio.

Could the sage cookie be referring to the fact that I spend too much time thinking about money? That’s a good question. I read a lot of personal finance blogs, financial books, and investing articles, but does that mean that I am obsessive about the subject and may be missing out on some bigger things? I don’t know, but I enjoy personal finance. It’s sort of a hobby of mine. I don’t think that my hobby is taking away from my enjoyment and focus on the big things in life.

Could the all-knowing cookie be referring to the fact that I have been hoarding my frequent flyer miles and not spending them on an awesome vacation in Maui? Maybe that’s it. A cookie can’t be wrong can it? I think its time for a big vacation purchased free of charge by massive spending of hard earned United frequent flyer miles. Now, if I could only find someone to take care of the kids for a week while the wife and I head towards the sunset.

Late Breaking Addition: Little Miss Money Bags left a comment saying that English Major got the very same fortune cookie. Fortune cookie companies everywhere have decided to branch out into financial services, apparently. Financial advisers beware!

How Do I Make a Million Dollars in 12 Months?

One of the things I enjoy doing is looking at the search words people use to get to this website. Often I find interesting posts to write by looking at those key words. Well, a few days ago I noticed someone got to this blog by searching for the term in the headline: "How Do I Make a Million Dollars in 12 Months".

If I knew the answer to that question I wouldn't be writing a blog about personal finance, I would be too busy raking in the dough and choosing the color for the suede furniture on my yacht. Well, maybe not suede. I think leather might work better, but I digress.

Anyway, let me take a crack at that question. I have several answers, some serious, some not so much:

1. Win the California State Lottery - according to Wikipedia, your chances of winning are about 41,000,000 to 1, but somebody has got to win, right? Of course, I believe that lotteries and virtually all other forms of gambling are a form of tax on the financially challenged.

2. Have a Rich Uncle Die and Leave You a Bundle - unfortunately, unless you have a wealthy relative who is in poor health and that loves you like a son, banking on that is probably not a great strategy. There is also that tiny matter of homicide laws preventing you from helping nature along.

3. Go On American Idol - in which case you can build yourself a million dollar career by either doing very well or by being the weirdest guy around. If you are seriously searching the Internet for ways to make a million dollars in 12 months, you may actually have a shot at the latter.

OK, enough with the fun and games. Yes, there are some real world scenarios in which you could make a million dollars in 12 months. To do that, you have to either be extremely lucky, extremely knowledgeable, or more likely, a combination of both. If you are a professional at the top of your game, you might also be able to earn a cool million in one year. Some investment bankers, lawyers and doctors can make that much. Of course, if you are a member of the corporate elite, say the CEO of a Fortune 500, a million dollars is chump change for you. And if you are sitting on the next Apple iPod, YouTube or eBay, you might be able to pull off the $1M in 1 year trick.

There are many ways in which some individuals can make vast amounts of cash in a short amount of time. Those make for some excellent dinner party conversations. Sadly, for the vast majority of us middle class folks, riches are not easy to come by, and patience is the quickest road leading to financial security. If you were to ask me about saving a million dollars in 30 years, well that's a question worth discussing seriously.

If you are looking for quick ways to make a million bucks on the Internet, chances are you will run into something or someone that will offer you just what you are looking for. Chances are also that in the course of chasing down this imaginary pot of gold, you will lose much of your money to the scam artist which lured you into his trap.

Come to think of it, if you need to make a million dollars in 12 months, maybe your best bet is to become a online con man. It seems like there is a new client born every minute...

Wasting Money on Personal Care Products

Would you like to save $7.99 every three months? No big savings here, but I have discovered that buying shaving gel is a complete waste of money. I first figured this out a few months ago, when before boarding a flight on a business trip, the TSA deemed my can of shaving gel to be a danger to the flight and confiscated it (much to the relief of my fellow travelers and humanity at large). Since my flight arrived very late that night and my meetings started first thing the next morning, I had no choice but to shave using... wait for it... ordinary bath soap, instead of high-tech, top of the line, $7.99 per can Gillette shaving gel.

As I pulled the razor across my skin I cringed, fully expecting horrible pain or at the very least bloody gashes on my face. To my amazement, shaving using soap felt exactly the same as shaving with my fancy shaving gel. No blood, no pain, no rash, no stubble. Since then I have stopped using shaving gel on business trips. For one thing I think I am making America's airliners that much safer by leaving my potentially explosive toiletries at home (my god, the TSA are complete morons). For another I decided that I don't need shaving gel on business trips. I am still using shaving gel at home. I am not exactly sure why. Inertia?

I wonder how many other products I am buying because I completely bought into a fictitious marketing pitch. Should I start brushing my teeth with $1 tooth brushes instead of my fancy electric one? Should we start using just any ol' washing liquid on our clothes, or is there something inherently better about Tide? How about a home made deodorant? Will that work? OK, I am kidding about the last one. Until a few months ago it wouldn't even cross my mind to shave without gel, I am guessing there are many other items that we are buying and that are probably superfluous. Finding out which could be a little tricky though.

Your Credit Card Debt is Too High If...

This is the second weekly(ish) installment in the Funny Money series of posts. Money should never be taken too seriously, and neither should this series.

Your Credit Card Debt is Too High If...

1. Your name repeatedly comes up as a potential beneficiary in a U.N. discussion titled "Debt Relief for Developing Nations".

2. Your credit score is lower than your IQ

3. You accidentally walk into a Capital One shareholders meeting where you are received with a standing ovation, following which the crowd spontaneously erupts into the song "for he's a jolly good fellow..."

4. You recently tried to board a South-West flight with your credit card statement, but the flight attendant made you pay for an extra seat (using your credit card, of course).

5. Last night you woke up to a voice yelling: "feed me Seymour", coming from your wallet. You swear it was a dream, but in the morning you look a little pale and have strange pin-prick marks on your thumb and middle finger.

6. On rainy days there is a homeless person named Eugene who uses your credit card statement as temporary shelter.

7. Small birds that stray too close to your credit card statement are silently sucked into what is described by modern physics as a hole in space-time.

8. You practice writing teeny-tiny numbers so that you can fit your minimum payment amount onto one check.

9. Yeah, you've heard of the national debt. It doesn't sound THAT big.

10. You carry a balance on your credit card. Seriously, some people actually do that.

11. Suggested by Silverbax of Hard Working Cash - "The amount of paper used to print your credit card statement causes Greenpeace to demonstrate outside of your home."

Have any other good ones? Post a comment. If you are a blogger, I will post a link to your blog if you leave a suggestion. How's that for a deal?

Liked this post? You might also enjoy this one: It's Time to Drop Your Financial Advisor When...

It's Time to Drop Your Financial Advisor When...

I am starting a new series of posts titled "Funny Money". The goal is to have a little fun with the often too serious topic of personal finance.

Here is the first post in the series.

It's Time to Dump Your Financial Advisor When...

1. You swear you can hear an evil theme song and the roll of thunder every time he speaks.
2. He bursts into hysterical laughter whenever the topic of expense ratios comes up in a conversation.
3. He recommends investing in past commodities, since the futures commodities market hasn't happened yet and no-one is quite sure when it is expected to occur.
4. He is not quite certain but he thinks that sub-prime loans have something to do with borrowing a rib sandwich offered by a national sandwich chain. He also suggests the same company should introduce a sub-wings sandwich with chips and a soda.
5. When you ask him whether to sell a losing stock, he excuses himself and briefly turns away to consult his magic eight-ball.
6. When you visit his office he excitedly tells you that his new computer now allows him check stock quotes almost in real time. He also swears that he will soon have enough saved to afford that new fax machine thingy.
7. You find out the name stated on his birth certificate was Alfred E. Newman.
8. When you ask him about hedging he explains that since he hired his new gardener, he no longer has to do any of that sort of stuff himself.
9. When you inquire about the best way to fund your account, he suggests small, unmarked, non-sequential bills, preferably delivered in a brown briefcase.
10. He suggests with a straight face that you should invest in actively managed stock funds. No, really.

If you can think of any other excellent reasons to drop your financial advisor like a hot potato, be sure to leave a comment with your suggestion.

Also be sure to check back here next week for the next installment in the Funny Money series, I think this will be fun.