Yesterday I was searching for a personal finance blog to pick on when I came to Saving to Invest, which started the day’s entry thusly:
This is a somewhat controversial guest post by Tony Parker. I was debating whether to publish it given religion and finance are a dangerous mix.
Nothing gets my attention like the phrase “controversial guest post.” (Note to self: must google phrase regularly.) And the title promised good material to follow: Church, Religion and Questionable Financial Advice.
It seems that Parker’s family dragged him to church the other day. He hadn’t been in a while, so was surprised by how many people were there. Apparently, The Great Recession has been good for the church biz. I guess that old saying about there being no atheists in foxholes can be extended to economic hard times. (Although, having been there recently, I can assure you that there are atheists at the unemployment office.)
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This week’s Carnival of Personal Finance at Wide Open Wallet includes my post on owning vs. renting. There’s lots of other interesting stuff there, including a collection of photos of some really unlikely world records. Click and enjoy!
Until just a little while ago a fear of deflation was all the rage. In-the-know types nodded their heads gravely and showed erudition by expressing a fear of something that hasn’t been a problem in this country for 75 years. And they were right to fear it. Deflation is a really nasty thing. More than anything else, it is what made the Great Depression great. But as it happens, our guy at the monetary controls, Ben Bernanke, is a particular expert on deflation and the Great Depression. He may or may not succeed in steering our economic ship clear of the shoals, but deflation is one particular rock he is sure not to hit.
Prices did decline in the fourth quarter of 2008, down –3.3% as measured by the Consumer Price Index. Annualized out, that’s a very scary –12.4%. But, knock on wood, that was a brief episode that is now over. The Fed has been working furiously to pump as much money into the economy as possible, doing everything short of handing out bags of the stuff on street corners. Prices were up in both January and February, totaling +0.7%, which is a +4.3% annual rate.
So the Informed Consensus Fear has shifted from being focused on deflation to an uncertain fear of both deflation and inflation. Personally, I predict inflation. Maybe not in 2009, but in 2010 and beyond.
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I put a passing reference to The Millionaire Next Door in my post Wednesday on The Tragedy of Impulse Saving. A commenter asked about it and actually followed up to say that he would love to hear my opinion on the book. I can’t bring myself to write a proper review of a 13 year–old title, but on the flimsy pretense that one person who comments must represent thousands of silent readers who feel the same way, let me share why I don’t like it. (That’s the problem with leaving comments here, I just read what I want to.)
To start with, Millionaire Next Door is poorly written. Large sections just dump information on the reader without drawing any conclusions or giving any advice. And the authors’ choices of topics, and how much ink to use on them, is peculiar, as if they just threw together the book from notes they happened to have had lying around. So, for example, 70 pages (of 245 in my paperback copy) are spent on giving money to your children. 36 pages cover buying cars. There isn’t much of anything on buying houses. There’s a big section on selecting financial advisors, but little on investing as such.
The core advice in the 70 pages on giving money to your children is that you shouldn’t give money to your children. Not only will it make you poorer, but it is bad for the kids. They will amuse themselves by spending it and not learn to be frugal like you. The authors cite data that shows that adult children who get money from parents are in general poorer and argue that giving your kids money will have the opposite of the intended effect. Unremarkably, they do not consider the possibility that maybe those children got money from their parents because they were poorer, not the other way around.
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Two weeks ago Trent at The Simple Dollar had a post in which he quoted at length from a pretty hostile email attacking him for not having any particular qualification to give personal finance advice. Of course, to a blogger like Trent that’s a slow hanging curve, and he proceeded to yank it into the bleachers in post that got 225 mostly supportive comments.
His defense of his right to give advice was not “Hey, maybe I don’t have a lot of credentials, but I know what I’m talking about” nor “Look, I’ve been doing this for three years and more than 100,000 people read this blog every day, so my advice must be pretty good.” Instead, Trent essentially said what most bloggers say, that he is not a guru but an ordinary guy doing his best. “All I can do is share my experiences and what I’ve learned along the way.”
Similarly, in the Get Rich Slowly post that discussed this blog (and led many of you to discover it) my current hero j.d. wrote that he had been thinking of updating his disclaimer and had settled on borrowing the text from The Digerati Life:
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