Funny stuff by the folks over at Salon.com:

Well, funny if it weren't so true!

The other day I picked up a copy of Malcolm Gladwell’s newest book, Outliers: The Story of Success. I’m only a third of the way through the book, but here’s my take on what I have read so far.

Gladwell believes that success is more than just “pulling oneself up by their bootstraps.” He tells the story of Bill Gates and that the real reason for his success was that his private school (Gates came from a well-off family) purchased a computer before computers were widely-used and that Gates was naturally drawn to it. In other words, had Gates gone to a different school, I might not be typing this blog post because computer software might not exist as it does today. In other words, circumstances matter.

The problem I have with the book is that Gladwell seems to take the approach that success is simply too hard for the poor to achieve. Yes, I’ll admit that it would be harder for a poor person to achieve success in life but that doesn’t mean it’s impossible. I think half the battle in achieving anything is mindset. If a person or class of people is constantly told they CAN’T do something, they end up believing it.

How would I level the playing field? My solution:

1. Allow parents vouchers so that they can send their kids to any school they desire. Not all parents would take advantage but some would.

2. Reinforce education and the importance of reading. Enlist the help of ‘famous’ athletes and musicians to get the message out to kids and PARENTS that EDUCATION IS IMPORTANT! Promote libraries and reading clubs. Offer reading classes to parents.

3. Don’t pass kids if they don’t make the grade.

4. Stop glorifying trash and stop filling our kids’ heads with hatred. Show kids how to respect themselves and those around them.

5. Require kids to watch The Big Idea.

Like I said, I’m not through reading Gladwell’s book yet. I don’t agree with some of his thoughts but I do like his style. There aren’t a lot of non-fiction books out there that are enjoyable to read.

GIVEAWAY

If you’d like a chance to win a copy of the book from me, leave a comment below explaining your thoughts on success. I’m going to make this my FIRST EVER subjective giveaway in that I am going to pick my favorite comment (and the comment doesn’t have to agree with me!) and the winner will receive a copy of the book. The deadline for entry is Friday, December 12, 9am CST. Just remember my rule:

1. you must be a resident of the U.S. or Canada (I won’t mail internationally).

ShareThis

We’re nearly midway through December already. That means 2009 is just around the corner. In the spirit of the new year, I’d like to ask:

What are your 2009 Financial Goals?

Here are mine in order of importance:

1. MAX OUT my wife’s 401(k). We haven’t maxed out her 401(k) in years. The market’s down so it’s the PERFECT time to get back into the habit. The IRS raised the employee contribution limit to $16,500 for 2009. My wife gets paid twice a month so that means she will be contributing $687.50 per paycheck. Wowza!

On top of that, she’ll also get a generous employer-match of 75% of the first 6%, or 4.50%. The employer-match should easily put her over the $20,000 contribution mark for the year (and maybe even closer to $25,000 if we get profit-sharing).

2. Recommit to our budget. I know, I know,…we should already be doing this. However, I got kind of lazy and complacent and haven’t stuck to our budget. We make decent money so it’s really silly of us not to using our income wisely. We do save money each month but we could do a lot better with some discipline.

3. Continue building up our emergency fund. Our efund is nowhere near where I’d like it to be. So, the third goal for 2009 is to get it to $10,000.

Those are my financial goals. What are yours?

ShareThis

Frugality is quickly becoming a buzzword in America with people’s retirement dreams taking a bit of a detour into a ravine — and right before the holidays, too.  How very inconsiderate.

Here are a few tips and tricks for descroogifying what might be more modest holidays:

• Check out the library and paw through some December family-oriented magazines. Ones like Redbook, Family Circle, and Ladies Home Journal regularly have articles with lists of frugal tips, especially around the holidays.  These magazines also have the advantage that the tips don’t get terribly outdated the way some other magazines might.
• Hit thrift stores for little kids’ toys. (And for big people’s toys, too.)  When giving a gift, consider whether “new” can be extended to include “new to them.”  Antibacterial soap and water for plastics, or a gentle wash for cloth, can do wonders.
• Resist the temptation to buy inflatable holiday lawn ornaments. I’ve long thought that big huge inflatable snow globes and the like are tacky, and if you don’t have them, consider yourself all the richer.  (As will I.)
• Put up a website with pictures instead of sending out Christmas cards. If you already have your own web space, most hosting providers will allow you to password-protect a directory.  Then you can e-mail the link, and the username/password, to your friends and family.  Well, you can e-mail it to most of your friends and family, but your 97-year-old great uncle might still appreciate the snail mail.  If you don’t have a website or if this is too much trouble, then DropShots.com lets you upload up to 500 pictures and 20 two-minute videos for free, without ads, and lets you decide who you want to see them.
• Try your hand at cinnamon-applesauce ornaments. My wife tried some of the recipes over at HandMadeCountry.com and found the second recipe to work pretty well.  You might be the only one in your circle of friends who does this, and they’re inexpensive (especially if you get the cinnamon at Costco).
• Speaking of cinnamon, it’s really good for you, and it adds flavor to a number of ordinary drinks.  Sprinkle a little bit of cinnamon on top of the coffee before brewing.  Or, warm some apple cider on the stove with a cinnamon stick.
• Attend a school holiday chorus/band concert. The music is better than you might think.  If the rehearsals are anything like when I was in high school, there’s probably at least 30 hours of solid preparation that goes into these concerts from the beginning of the year to December.  There’s at least a little bit of magic that happens during that time.  And you can’t beat the price.
• If you’re going to give money as a gift, you might be able to get by with giving a little less for the same “wow” factor if you give shiny Presidential dollar coins instead of regular bills. (One for each President issued so far only sets you back eight bucks right now!)  Or, if you’re a really big spender, a full assortment of state quarters is only $12.50!
• If you’re after one of those “hot, must-have” toys that you’ll fight tooth and nail for, stop. Take a deep breath, and step away from the shopping cart.  You might even consider not going on eBay, because there will be opportunities for you to pay way more than retail for it.  (I did this with Wii Fit but I felt I had a better excuse.)  Instead offer it to your kids after Christmas when there will probably be plenty of them around.  Maybe wrap a picture of it with a note.
• Through all of this, remember that the greatest gift of all is freely given for anyone who asks for it.

(Photo credit: shutter.chick)

I read somewhere over the weekend a letter to the editor of some newspaper (I can’t for the life of me remember where I read the comment) by a guy who was lamenting the fact that investors get screwed no matter who is president. His letter mentioned that some stocks do well when a Republican is in office and other stocks do well when a Democrat is in office—he just didn’t know which ones.

I have a suggestion:

Buy the index and don’t worry about it.

Yes, we can make more money IF we know which stocks are going to outperform the market. The problem is either WE DON’T KNOW or it’s hard to know. Therefore, buying the index is the prudent way to go because you don’t have to worry about picking stocks (unless that’s something you love doing).

ShareThis

Check out this letter to the editor that was in today’s Wall Street Journal:

In your Dec. 1 editorial “Messing With Malpractice Reform,” you urge the Illinois Supreme Court to “side with the patients and the rule of law” in considering a case that could overturn the state’s cap on damage awards. Yet the editorial never mentions the patient who is at the center of that case.

She is a three-year-old little girl named Abigaile LeBron, whose life has been forever changed by the severe brain damage she suffered as a result of medical negligence. It is likely that Abigaile will have to be fed through a tube for the rest of her life. She will never develop cognitively or physically as her peers do. And she will likely never live independently. It is inarguably a very painful tragedy for Abigaile and all who know and love her.

The insurance industry and its brethren in the tort reform world have argued that Abigaile’s compensation for lifelong disability, pain and suffering should be arbitrarily limited, despite what a jury of average citizens may decide. The question before the Illinois Supreme Court is whether the Illinois Constitution allows Abigaile’s rights to be limited in this fashion to the benefit of insurance company profits. Twice before, our state’s highest court has decided in favor of patients and against the insurance companies that would limit these rights to protect their own profits. No new arguments have been offered by the insurance industry.

You argue that a reduction in malpractice premiums and the return of doctors to the state have resulted from the law containing caps. Nothing could be further from the truth. Not one case has been litigated under the new cap in Illinois. The simple fact is that those positive developments have resulted from strong, long-suppressed insurance reforms in the legislation. That law has now forced malpractice insurance companies to provide greater transparency on rate-setting and payouts that has in turn spurred competition, motivated more companies to enter the marketplace, and lowered premiums for doctors. Important to the discussion for your readers is the additional fact that Illinois’ largest malpractice insurer has reported that payouts have remained flat for the past 13 years. By the way, it’s the same insurance carrier that admitted during the run-up to this legislation in 2005 that capping awards would not guarantee lower premiums for its doctors.

The Illinois Constitution was put in place to ensure individual rights and freedoms. While corporations and profit-hungry executives often stack the decks against individuals in the marketplace and the halls of government, the courtroom can still provide all parties with a level playing field. The Illinois Supreme Court will now decide whether that standard remains in place for patients like Abigaile LeBron. You should let it do its job.

Philip Harnett Corboy Jr.
President
Illinois Trial Lawyers Association
Chicago

Here’s the problem I have with juries being able to award money damages:

They have no concept of how much money they are awarding. It’s not their money so why not be a cheerful giver?

I’m not saying that what happened to the little girl in the editorial isn’t a tragedy. It is.

I just think it would be nice for lawyers to stop hiding behind the sad stories, be honest and say, “I don’t like tort reform because it severely limits how much money I can make!” It’s silly to talk about “greedy” insurance companies when the lawyer gets a nice percentage of the winnings.

ShareThis

(This is a guest post written by ABCs of Investing, a brand new site for novice investors which offers two short and simple investing posts per week.  Feel free to subscribe to the feed.)

The majority of investors use a financial advisor or broker to help with their investing planning.  There is nothing wrong with getting some help with investing since it is a fairly intimidating subject.  Most people just don’t have the time or the interest to read investment books and become knowledgeable enough to be able to handle all of their own investments.  Do-it-yourself investors forget how much time they have put into learning about finances and think that investing is easier than it really is.

The great thing about investing is you don’t have to choose between being an expert DIYer or a clueless investor who needs an advisor.  You can hire professional help AND know what you are doing at the same time!

A few years ago I bought a basic electrical book.  It showed how to do electrical repair jobs and even how to plan various circuits in a house.  One of the things that I found most interesting about the book was in the introduction; it said that learning the basics of your electrical system is useful whether you do the work yourself or hire someone else.  The point was that even if you end up hiring a contractor to complete your electrical work, any knowledge you have about the electrical system in your house and how it works will assist you greatly.  The same logic applies to investing: the more investment knowledge you have when dealing with an advisor, the better off you will be.  It is worthwhile to spend a bit of time learning about investing.

There are number of areas where some investing knowledge will help if you have an advisor:

• It won’t be as easy for the advisor to take advantage of you.  Let’s face it: some financial advisors, like real estate agents, make money on commission, and unscrupulous ones can rob you blind if you let them.  Knowledge about proper investments and for that matter knowledge about how advisors make their money will help you a lot.
• You’ll have more productive advisor/client meetings.  Usually when a client visits or talks with their advisor, the advisor is telling them what to buy.  If you can spend some time before meetings looking over your portfolio then you can drive the meeting agenda and make sure that your questions get answered.
• You’ll know better what you want from your advisor.  A lot of investors just hand over the financial reins to their advisor and just do whatever they are told.  If you have some investment knowledge then you will be in a lot better shape to determine what you want from the advisor, communicate your desires to them and make sure that they are the right advisor for you.

The single best way to learn about investing is to read.  Read, read and then read some more.  Books, blogs, websites, newspapers are all sources of information.  Talking with friends, relatives, co-workers can also be helpful.  But beware, all the “good” ways to learn about investing can unfortunately also be “bad” ways to learn about investing.  The best way to protect yourself is to read as much as you can and eventually you will be able to figure out where the good information sources are.

Knowledge is power!  Make sure you have as much as possible when dealing with your advisor.  Even a little bit of knowledge is a lot better than none at all.

(Photo credit: net efekt)

How you see yourself is likely how others will see you as well. Here’s a few examples of how you can implement this to your advantage.

- You’re unemployed. No you’re not. You’re advancing in your career, you’re an ambitious person looking to move up.

- You do freelance graphic design. No you don’t. You’re an artist.

Think of yourself as a product. You’re selling yourself to others. From your clothing to your way of speaking, you are a product to everyone you meet. Everyone from strangers to business owners subconsciously ask themselves if they want to buy you. So sell them your product. If you don’t market yourself or brand yourself in the way you want, others will most certainly do it for you.

- Edwin, CashTheChecks.com

First, a small disclaimer:  I’m not a big movie-watcher myself.  I’ll take in a movie maybe every two months, possibly less often than that.  This includes trips to the theater and rentals.  As such, I don’t spend a lot on movies, anyway.

Over the next few years, taking in a flick with friends and family will be an affordable substitute for a vacation.  It’s just plain cheaper.  The good news for people who really love movies is that it’s possible to get by pretty cheaply, and if you downsize other areas appropriately it won’t strain the budget that much at all.

So, here are some tips for you movie buffs on how to maximize your cinematic dollar:

• Really pick and choose which movies you see in the theater. One group of movies that might make the cut are ones that absolutely depend on special effects and the latest, greatest sound equipment.  Another group would be movies that might take a really long time to get onto video.  The main point is that going to the theater is the most expensive option for watching a movie, so choose wisely.  There’s the time and gas to get out there, as well as the fact that you only get to see it once for your money.
• Take in a matinee if you can. Some theaters offer off-peak showings at a discount to the price of nighttime showings.  The movie is the same.
• Stay away from the concessions if you can. The movie theater makes its money on the concessions.  Fountain drinks have a markup of a few thousand percent.  Same with popcorn.  A movie theater that lets you bring in your own concessions is a hidden gem; if you can, take advantage of that.
• Stay away from giving to causes before the movie. Movie theaters play off attendee’s emotions.  They have a movie screen at their disposal to play carefully-designed clips that encourage you (guilt you?) to give right there.  If you do, the movie theater writes off your donation, not you.  If you itemize, and give what you would have given directly to the charity, you can write it off (assuming you’re allowed to do so).
• Look into packs of tickets to see if there’s a price differential. Costco.com offers movie ticket packs for four different movie theater networks.  Check to see what network your favorite movie theater is in, and check the price of the tickets in the pack compared with your movie theater’s prices.  (Or, you can of course check for movie tickets on eBay!)
• See if you can get a group together. For example, our church got a bunch of people to see Fireproof this year, and I believe that they got a small discount.  Every little bit helps.

• For the movies that really don’t need to be seen immediately or ones where the big screen doesn’t matter, watch it at home! It’s way cheaper.  You can buy your soda and candy at the grocery store, and eat it during the movie without feeling like you have contraband.  Popcorn is way cheaper and healthier.  We use a Nordic Ware microwave popcorn popping bowl and it does a good job without needing any oil.  A bag of kernels costs a couple of bucks and could provide popcorn for a couple dozen people.
• Like to watch a lot of movies and want a lot to choose from? Netflix is probably your best choice.  They have over 100,000 titles to choose from.  They pay for shipping both ways, and you can cancel at any time.  There are instant downloads available each month as well.  My parents-in-law have a Netflix subscription and they absolutely love it.
• Are you looking to start or expand a collection? Well, good news!  Lots of people are looking to get rid of their collection or decrease the size of it.  There’s nothing wrong with pre-viewed DVDs (unless they’re absolutely trashed).  People routinely sell their personal DVD collections on eBay, and bidding on these is brisk.  More often than not they will list every single movie right in the auction, so you’ll know exactly what you’re going to get.  A fair price point for collections is less than half of what you can get them for in WalMart’s dig-through-the-box specials.
• What if you’re like me and don’t watch movies often at all? Like I mentioned above, I watch only a few movies a year.  A Netflix subscription would be overkill for me.  If you’re a casual viewer, then it’s easier to find good deals in low quantities because the urgency really isn’t there.
• Pawn shops, thrift stores, and garage sales are good places to pick up one or two cheap movies. Three bucks is a good price point.  If you run across something that looks interesting, pick it up.
• Redbox works well, too. I had a good experience with Redbox when I rented Expelled.  It was a very easy process, and the rental was a buck for one night for a movie that was released this year.
• Don’t forget free! There are options for free movies, of course.  Your local library might have a collection.  Your church might.  Hulu.com has a fairly decent free movie selection.  You could borrow one from a friend, or wait until it comes out on network television.

Below is an email interview with Brent Kessel, author of It’s Not About the Money: Unlock Your Money Type to Achieve Spiritual and Financial Abundance*, a book that I reviewed earlier this week.

Why did you decide to write a book?

Without wanting to sound cliché, I never really feel like a made the decision. I had observed so many people suffering around financial issues, and barking up the wrong tree, as it were, that I felt compelled to write it. It was one of the easiest things I?ve ever done professionally.

What do you think is the number one reason people fail financially?

They don?t understand what payoff their financial habits are giving them. If they?re chronic overspenders, there?s a need that their purchases are filling, an emotional need, and buying purses or cars or new furniture allows them to feel good about themselves for some time. In order to change the financial habit, they have to replace the payoff with some other payoff that fills the same need. But most people never question what?s motivating their financial habits.

You say in your book that the ideal person would be balanced among the eight financial archetypes. How do you recommend a person obtain that balance?

It?s very difficult work, but very rewarding. It?s very hard to answer this question in a generalized way, which is why there are about 60 highly customized exercises in the book, so that each archetype can create the balance that they need. One way to say it, is that we often need to cultivate the positive attributes of the archetype which is most dormant in us. So for me, that?s mostly been the Innocent. Being willing to have faith and trust that things will work out, without putting quite so much focus on the numbers, given that I?m a Guardian/Saver/Empire Builder predominantly.

Which of the eight archetypes do you think is most prevalent in today?s society?

Pleasure Seeker and Innocent were prevalent until Summer 2008, which is why we?re in this mess. Today, it?s much more Guardian and Saver. People seem to be returning to the values of the ?30?s ? 50?s, but we?ll see how long that lasts.

How do you explain the archetypes to your clients?

I usually don?t. This is part of why I wrote the book, so that they could read the complete story about each archetype in there. As an example, I?ll more intuitively give a client ?homework? to spend more money on things which bring sensory pleasure, in the case of an overly frugal Saver, or have an Innocent hire a bookkeeper or sign up for an internet-based service like mint.com which shows them where the money?s all going.

What is the typical response from your clients once they learn about the different archetypes?

?Wow, I had no idea you had me so pegged.?

Do you ever have clients who deny the findings?

?Not really. The most I?ve had is someone who felt they couldn?t find themselves in any of them, which is usually a sign of the Innocent. Some people feel that they?re a balance of many, or that it?s constantly changing. Both of these are good signs.?

Once you know a client?s financial archetype, how do you cater your financial advice to fit the archetype?

Again, this is very customized. The Appendix of the book has specific financial planning recommendations tailored to each archetype, and it?s many pages, so it?s hard to summarize. But one example might be to have a Pleasure Seeker sell their vacation home and art collection and deploy that money in more income-producing assets (which don?t produce sensory pleasure), like stocks, bonds, or income properties.

Since writing the book, do you find yourself trying to figure out the archetypes of the people you meet?

Sometimes. It?s mostly intuitive though. If you go to my first MSN story, there?s a video of me walking around Central Park interviewing people and guessing their archetypes. Kind of humorous. The other stories there may give you some good blogging ideas too.

Finally, is it natural for a person?s archetype to change over the years or do people tend to stay the same throughout their lifetimes?

The healthiest people I?ve met with money are able to express different ones at different times. But there?s a whole class of people who, especially when the going gets tough, go back to their tried and true archetypes. Financial habits are hard to break, because unless we very intentionally try to cultivate those which have been dormant, they?ll stay dormant.

Thanks, Brent!

Also, I want to go ahead and announce the winner of the “It’s Not About the Money” book giveaway. There were forty-nine entries and the randomly-selected winner was commenter #31, Walter. Congrats, Walter. I hope you enjoy your book!

I have another giveaway coming up soon. Stay tuned…

ShareThis

If you place a charge of $5,000 on your credit card and only make the minimum payment each month, the chart above shows you how long it will take you to finally pay it off and how much interest you’ll end up paying.

- Edwin, CashTheChecks.com

The “Big Three” automakers Ford, General Motors, and Chrysler, and the United Auto Workers union, traveled to Washington today to ask for a bailout.  They asked collectively for $34 billion, but some estimates suggest that they would actually need almost four times that.  Let’s just say that the banking committee wasn’t whipping out its checkbook.

Whether they actually get the bailout or not doesn’t change the fact that they shouldn’t be getting it in the first place.  Bailouts help the few at the expense of everyone else, and encourage the recipients of the bailouts to come back for more.

A bailout of the auto industry will save a few jobs for a little while.  OK, it will save a lot of jobs for a little while.  But in the long run, a bailout reduces everyone’s standard of living.  It’s interference in the free market, and causes a misallocation of resources.  It’s a misallocation because the market has already given the company the thumbs-down, in that the company has not been able to deliver a product profitably at a price that the market is willing to pay.  A bailout says to the market: “You’re wrong.  This company deserves to stay in business.”

In the absence of a bailout, here’s what would happen to a failing business under free market competition:

1. The common stock investors (if any) lose their investment.  Investors higher up the food chain get only part of their investment back.
2. The assets are sold at fire sale prices, usually to a stronger competitor seeking to increase its market share.  The bidding is competitive.
3. Some, or many, of the workers may not have jobs after the company is acquired.  The ones that do continue to do what they do, perhaps more cheaply.  Others don’t, but they can now enter another field and be productive.
4. The inefficient, inferior company goes away, and the efficient, superior company gets stronger.
5. We all win because the resources have been re-allocated efficiently, as a result of what we, the customers, have already said we want:  less of the failing business’s products, and more of the succeeding business’s products.

When the failing business appeals to the powers that be for a bailout, and it is granted, here’s what happens instead:

1. The failing business stays in business, despite the fact that it doesn’t deliver its product as efficiently as its competitors.
2. The workers keep their jobs, perhaps at above-market wages, despite the fact that this situation is not sustainable by the free market.
3. The people footing the bill (us, mainly) don’t have that money available to us to purchase the products we want.
4. We all lose because the resources have been re-allocated inefficiently by force, against what we, the customers, have already said we want.  We instead get more of the failing business’s products and less of the succeeding business’s products, and have to pay for this situation to boot.

Society functions most efficiently when its members are free to enjoy the fruits of their labor as they please.  From all I can see, society enjoys Toyotas and Hondas more than it enjoys GMs and Fords.  Why should we forced to pay for products we don’t enjoy?

The same is true of things like subsidies, unions, tariffs, import quotas, regulation, price control, and antitrust actions.  All of these things ultimately reduce our standard of living because they interfere with people choosing how to enjoy the fruits of their labors.  John Pugsley’s book The Alpha Strategy explains why these all hurt our standard or living in an exceptionally clear way.  It was written at the end of the Carter administration but the explanation of these phenomena still holds.

I expect we’ll get more of the same, but it will cost us all.  Who’s next in line for a bailout?

Oil dropped another $3.12 to $43.67…the lowest level since January 2005.

If someone would have told me back in July that oil was going to be trading in the 40s by the end of the year, I wouldn’t have believed them. It’s simply amazing how quickly things can turn.

Of course the bad side to all this is that now there’s less incentive for finding alternative fuels. I guess all those plans will get put on the back burner until it makes financial sense to go for them.

ShareThis

I don’t usually write much about credit cards here but this is something kind of interesting.

Charles Schwab is offering an unlimited 2% cash back on their Invest First Visa Credit Card*. The 2% reward gets deposited directly into your Schwab One brokerage account. If you can charge most of what you spend on a monthly basis, this could add up to a decent chunk of change.

My wife and I currently use a Wells Fargo cash-back Visa but it is capped at $500 per year. At a 2% reward, that’s $25,000 per year in spending. If you spend more than that, the Schwab card may not be a bad idea. Just don’t carry a balance!

* NOT an affiliate link.

ShareThis

There is so much bad news floating around, so much to be worried or angry or upset about in the world. However there is a lot to be grateful for as well, so I thought I would take a moment and count a few blessings. This may be a bit late, considering Thanksgiving was a week ago, but I suppose it is never a bad time to be grateful.

A few quotes on the subject I have read recently:

“Life isn’t fair, but it’s still good.” - Unknown (to me)

“To be grateful is to recognize the love of God in everything He has given us-and He has given us everything.”-Thomas Merton

Now you may not be religious, but that last quote really struck me when I read it. It reminds me to take the bad with the good, and to appreciate it. It might seem wrong or even stupid to try to appreciate what seems unfair, bad, or even evil, but it is possible - and important. We can learn and grow and change for the better as a result of every experience - be it sickness, recession, job loss, or even death.

I once overheard my mother say that having cancer was a huge blessing. I recoiled, but she explained that it brought our family closer together and made her realize her inner strength. Remembering that comment has always kept me in check when I find myself whining or self-pitying.

Things for which I am grateful:

• Having a job and a regular paycheck; not everyone does right now.
• Not having to worry about where I’ll get my next meal or bath.
• Having the means and time to give to others who need support.
• A large family which supports and uplifts me.
• The freedom and ability to learn and pursue whatever I choose.

Many in our country are struggling, some for the first time, as our economy sags and companies lay people off and wages stagnate. Of course we are all still much better off than many in the world, but is still natural and easy to worry, to complain, to be angry and even scared.

But struggles can bring us together, and they can encourage us remember what’s really important - what matters a lot more than the 401k balance or the big bonus check. I hope as this volatile year comes to an end that we can all find some things to be truly grateful for.

More from Meg at The World of Wealth

ShareThis

I’ve been reading more and more about the threat of deflation. What’s deflation? I can’t find a better definition for it than what’s in the Barron’s Finance and Investment Handbook*:

DEFLATION decline in the prices of goods and services. Deflation is the reverse of inflation; it should not be confused with disinflation, which is a slowing down in the rate of price increases. Generally, the economic effects of deflation are the opposite of those produced by inflation, with two notable exceptions: (1) prices that increase with inflation do not necessarily decrease with deflation—union wage rates, for example; (2) while inflation may or may not stimulate output and employment, marked deflation has always affected both negatively.

In other words, deflation is not a good thing even though price declines sound wonderful to the shopper!

Here’s a great little deflation tutorial if you’re interested: What is Deflation and Why is it Worrisome?

Are we headed for deflation? I have no idea. I think we’ve already seen it in housing and oil prices. Will we see it in other areas? I don’t know. I think it depends on how high unemployment goes.

Nouriel Roubini is expecting stag-deflation (stagnation/recession + deflation)…that doesn’t sound so good.

ShareThis

A recent study found that having more money doesn’t necessarily make you happy. This may put to rest the question of whether money buys happiness.

- Edwin, CashTheChecks.com

I’ve always found it a challenge to find good books to read. What I usually do is go to Amazon and look at the best sellers in categories I’m interested in like finance or business. I spend countless hours reading the reviews before finally deciding on a book. Well there’s a better way of finding good books and that’s joining a book club.

Book clubs are a great way to save on your favorite books because you can sometimes get good deals on books if you buy from the book club. You can order books of any genre from book clubs, from mystery to romance to westerns to science fiction. Get the latest best-sellers or beloved classics for less than you’d pay in a bookstore. Anyone who enjoys reading can benefit from the savings and selection that come with book club membership.

At the book club books website, there’s several different clubs to join including ethnic book clubs or the self-help section which is my favorite.

Could the failure of the “Big 3″ cause a depression?

That’s what a Chrysler executive claims:

“We’re on the brink with the U.S. auto manufacturing industry,” Press told The Associated Press in an interview. “If we have a catastrophic failure of one of these car companies, in this tender environment for the economy, it’s a huge blow. It could trigger a depression.”

I’m not sure about that but I am sure that it’s in this executive’s best interest to paint as bleak of a picture as possible in order to get his bailout. What do you think?

I’m sure failure would not be good. But, as we’ve talked about before, we can’t just give money to the automakers and allow them to carry on business as usual. Big changes need to be made and now is as good a time as any to make those changes. These changes have needed to be made for years but the current crisis really brought them to light.

Please weigh in with your opinion.

ShareThis

Welcome to the Carnival of Personal Finance!  It’s officially Cyber Monday 2008, the online doppelgaenger to Black Friday.  This term was coined by the American Retail Federation three years ago after a majority of online retailers saw their sales go up the Monday after Thanksgiving.  Snopes found that the busiest online shopping day is not Cyber Monday but a couple of weeks after.  Regardless of whether online shoppers are only lukewarm about today, one thing’s for sure: there’s way less danger of getting injured by an online shopping cart.

So enjoy the Carnival, and head over to Amazon or eBay with full assurance that the Internet will completely protect you from e-bruising by other online shoppers!

Posts on Budgeting

• Mighty Bargain Hunter gives ways to save on food, clothing, and shelter.
• Canadian Dream: Free at 45 reveals his spending weakness.
• Studenomics asks if you’re cash-strapped this holiday season.
• M is for Money talks about zero-based budgeting.
• Green Panda Treehouse asks a hard question: “Do you pay your mortgage or your medical bills?”
• Penny Jobs asks a good question for tough times: “What can I cut back on?“

Posts on Career

• Economic Crunch runs through a checklist for taking advantage of benefits on a new job.  (These things can be a nice supplement to your salary.)
• Monagomoney offers parallel advice with five things to do if you get laid off.  (Hopefully you’re not needing both this advice and the previous advice in the same day.)
• Dog Ate My Finances (ha!) will take Common Sense for $200, Alex.  (Note:  Careful punctuation is crucial in this blog’s tagline.  Imagine, if you will, a misplaced colon: “Mid twenties.  Big salary.  Paying for some mistakes:  a wedding, and life.”  The name would then have to be changed to Alimony Ate My Finances.)
• Beating Broke asks: “What is freedom worth?“

Posts on Credit and Debt

• Free From Broke chats about medical treatment and how it can affect your credit.  (Especially if the costs are big.)
• Credit Toolbox discusses some aspects of refinancing consumer debt.
• Blueprint for Financial Prosperity has a list of 0% balance transfer offers.  (Fifty different offers.  You should be able to do a 0% transfer of the national debt with this volume of plastic.)
• Ask Mr. Credit Card: “Should teenagers have credit cards?”
• Discover Debt Freedom has some advice for someone trying to get out of debt for the first time.
• Single Guy Money has a credit score checkup.
• My Family’s Money talks about two states’ propositions on payday loans.
• Destroy Debt discusses debt settlement and some factors to consider before doing it.
• Think Your Way To Wealth gives a closer look at the Baby Steps plan.
• Debt Goal tells how to say “no” to your children this holiday season correctly.

Posts on The Economy

• Wide Open Wallet has some ideas as to what the government should be doing during the recession.  (I have my own thoughts but I like to keep this blog clean.)
• Everyday Finance – the Blog of a Thousand Tabs — has some choice words to say about repricing employee stock options.  (Ahh, stock options.  What a cool dream.)
• Amateur Asset Allocator postulates on what a privatized social security system would look like.
• Funny about Money observes that the Dow is up, in spite of it all.  (Yeah, I don’t buy it either.  The market’s always right, but remember, it’s still down over 5,000 points from its high.)
• Frugal in the Fruitlands reviews The Two-Income Trap.
• The Sun’s Financial Diary reports on the extent of the malaise in the banking industry.
• Earn What You Spend discusses some of the relevant financial news as the incoming administration gears up.
• No Credit Needed questions whether spending patterns are in line with the direction the economy is heading.
• Brip Blap gives a superb answer to the question: “Do you need a bailout?“

Posts on Finance

• The Strump wonders why we don’t like to talk about money.  (It’s dangerous, especially if you were wise enough to sell your stocks a while back.)
• InsureBlog discusses discounts and medical plans.
• Accumulating Money talks about Social Security insurance.
• Harvesting Dollars suggests making this year’s bonus season different.  (Assuming you get a bonus, of course.)

Posts on Frugality

• Just Thrive explains three rules for giving the perfect gift without necessarily spending a lot of money.  (Money is tight, so make the most out of your gift-giving.)
• Debt Free Saver has a very simple suggestion for holiday gift-giving.  (It gets back to the basic of gift-giving!)
• Money Ning asks whether we always think that saving money is worth it.
• Monroe on a Budget rattles off some practical Christmas gift ideas.
• The Smarter Wallet has some tips for the early-bird traveler.
• Online Saving Blog tells how to avoid the Black Friday hype.
• Uncommon Cents discusses personal opportunity cost.

Posts on Investing

• Investing School explains the important aspects of bond funds.  (I love how he reminds us that even US Treasuries can default. I happen to agree, but rates will go way up before they do that.)
• Crash Market Stocks goes through the basics of buying and selling options contracts.
• The Financial Blogger wonders if the Dogs of the Dow have had their day.
• Intelligent Speculator questions whether corporate bonds are really safer investments.  (Than, say, Forever Stamps.)
• Dividends4Life discusses how to manage your dividend portfolio in a downturn.
• Four Pillars discusses whether we’ve reached the death of index investing.
• ABCs of Investing gives a quick tutorial on index funds.
• Dividend Growth Investor discusses why companies should pay dividends.
• Greener Pastures talks about the Standard & Poor’s Aristocrat Indexes.
• Monevator shows how to get rich by playing a video game.  (Nice spin on things.)
• Cash Money Life recommends making some year-end retirement account moves.
• The Dividend Guy sold some dividend cut stocks.
• The Dough Roller asks if you follow the 50-50 rule of mutual fund investing.  (Click to see what the fifties are.)
• No Debt Plan continues the “No Debt Plan” series with a post on investing for retirement.  (Very nice post.)

Posts on Money Management

• Crackerjack Greenback questions whether you can really trust your financial adviser.  (It makes good sense to follow the money.)
• Smart Money Daily takes a look at whether winning the lottery is all it’s cracked up to be.  (After reading the post, I’ll probably never buy a lottery ticket.)
• About.com Financial Software lists eight good iGoogle financial gadgets.
• Wisdom Journal lays out ten economic truths we cannot ignore.
• Christian Personal Finance advocates letting your finances see the light of day.
• Sound Money Matters asks: “To gift card, or not to gift card.“  (That is the question.)
• American Consumer News doesn’t buy the two months’ salary thing.  (I don’t either.  But if I were a high-powered CEO with a yearly salary of $1, well … “Here’s your Secret Decoder Ring.  Will you marry me?”)
• My Wealth Builder lists a few personal finance strategies that have helped during times of economic crisis.

Posts on Real Estate

• Living After Foreclosure has some suggestions if you’re facing foreclosure.
• Insurance Toolbox comes through with seven practical tips for reducing your homeowner’s insurance expense.  (Some of these tips have other good side-effects in addition to lowering your insurance bill.)
• Growing Money Blog posts a rental property update.

Posts on Saving and Taxes

• Stumble Forward gives five tips to creating a stellar emergency fund.  (Covers the basics well.)
• Blogging Banks posts the best CD rates around.
• Dollar Frugal is sounding the charge and telling people to continue hypermiling.  (Great advice.  Gas prices are low because of the recession.  They’re still going to go way up as supply crunches hit.)
• The Happy Rock pits Black Friday against Buy Nothing Day.
• Deposit Accounts talks about flexible spending accounts.
• Money Smart Life compares a couple of online bank accounts.
• Saving To Invest has some end-of-year tax tips, among other things.  (Gee, I can’t imagine anyone would have capital losses this year to deduct, as kind as the market’s been to people, but just in case you do …)
• Online Banking Blog shows how to choose the best bank account.

Other Posts

• Happiness is Better lists three keys to banana-free living.  (Sounds a-peeling.)
• Curious Cat discusses a financial Thanksgiving.
• Free Money Finance asks if you’re using your dollar coins.  (All the time, man!)
• Chief Family Officer has an emergency preparedness checklist for personal finance matters.
• Digerati Life wonders if there’s any good time to start a business.
• Budgets Are Sexy is uber-tempted by sales e-mails.
• Living Almost Large asks if one should feel guilty for success.  (Absolutely not!)
• Prime Time Money gives six ways to argue less about money.

1. Factor in S&H. A $10 memory card is a good deal until you have to pay $7 for shipping, then it’s not much of a deal at all.

2. Slow down. You have time, buying online can mean impulse purchases made on a credit card. You might regret it once the Cyber Monday hangover is over.

3. Shop by product, not by store. If you know what you want to buy, use Google to find it at the lowest price, instead of just finding the product at your favorite store.

- Edwin, CashTheChecks.com