End of February Round Up

Continuing a long tradition that dates back four weeks, I’m using this last day of the week and month to round up a few things I’ve found lately on the interwebs that deserve comment but not whole posts.World Map Small

Kiyosaki in Canada

The Consumerist asked the other day Is Rich Dad Robert Kiyosaki Getting Rich Off Suckers? Excellent question. Let’s examine it logically.

1. Kiyosaki is rich.

2. What he does for a living is sell books and seminars.

3. Those books and seminars are basically worthless.

4. Purchasers of those books and seminars are therefore suckers.

5. Ergo, Kiyosaki has gotten rich off suckers.

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Plutus Awards

I’m breaking my usual Thursday vow of silence to pass along the news that Bad Money Advice has been nominated for a Plutus Award. I am particularly proud of the category: Most Controversial Personal Finance Blog. Fans of BMA might want to drop by the site and show their support. I’d appreciate it, and the other nominees may as well, as they likely achieved controversy less intentionally.

Roths for Teenagers?

1040 March is just around the corner, which means we are entering the heart of tax season. Time to gather those 1099s, fire up the old TurboTax, and wonder how we can possibly pay Uncle Sam less money next time.

So ’tis the season to think about, and write about, schemes and tricks to minimize your tax bill. For example, the AP ran an item the other day discussing the rather unlikely maneuver of teenagers opening Roth IRAs.

It’s an idea with some intuitive appeal. As readers of this blog know, Roths are attractive if you believe that the tax rate paid today is likely to be lower than what will be paid when the money is withdrawn from the IRA. A teenager with a tiny income, and thus a low marginal tax rate, certainly qualifies.

And there is the tremendous emotional appeal of "the magic of compounding" that miracle of mathematics that will drastically increase the IRA balance during the very long journey to retirement. Even with only 5% annual return, after 50 years $1 would grow to $11.46. Imagine how grateful your child will be when they retire and realize the foresight you had in making them save way back in 2010.

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More Millionaire Secrets Disclosed

If there is one theme that I cannot resist writing about, it is the sharing of the alleged secrets of millionaires. Smart Money recently gave us a typically insipid Mansion - William Helsen example with 10 Things Millionaires Won’t Tell You. (Credit where credit is due, I found it via Free Money Finance.)

I am not sure if I have said this unequivocally before, but I am a millionaire. So, using the level of scientific inquiry typical of Smart Money and its ilk, let’s validate their secrets using this sample of one.

1. “You may think I’m rich, but I don’t.”

The "I don’t" part is basically true, but I’m not so sure about the "you may think I’m rich" part. When you get down to it, a million dollars ain’t really that much money. Something like 1 in 16 US households has a net worth north of a million. Equating millionaire with rich made sense a hundred years ago, but today I think the lifestyle most would associate with rich would start at around $10 million in net worth.

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Is a Fake College Degree Worth Anything?

Earlier this month I asked Is a College Degree Worth Anything? It is a theme I’ve touched on a few times over the past year. (See other posts in the Grads Chris Moncus category "College" at right.) In my view college is financially a great deal for some people, and a good deal on average, but at the marginal extreme probably not worth it.

Two recent posts on WalletPop (here and here) raised an interesting follow-up question. Is a fake college degree worth anything?

I am talking about degrees from what are called diploma or degree mills. Deliciously, WalletPop makes a distinction between the terms based on how blatant the fraud is. Diploma mills sell official looking papers for a modest fee. Degree mills make a show of reviewing your "life experience" before selling you official looking papers for a slightly less modest fee, running from several hundred to several thousand dollars.

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