Sorry. You have probably noticed that I’ve been failing to post on my usual schedule lately. Non-blog life is once again rearing its ugly head in a higher-priority way.
For the next few weeks, likely through the holidays, I will be engaged in another of my quixotic efforts at attaining actual employment. Everybody keep fingers crossed.
So, once again, I am officially declaring a Bad Money Advice hiatus. And, once again, let me take this opportunity to thank all the members of my ego-boosting cult-like following. Please try and notice that I am not around.
Normally, this is the time of year that money advisors and gurus trot out the old canned advice on end-of-year tax planning. Not this year. This year we are all just too confused.
Generally, we can do little things in November and December to slightly lower our tax bill because, generally, we can predict what the tax rates will be in January. Not this time. Congress managed to adjourn for the elections without doing anything at all about the expiring Bush tax cuts, and when they 
reconvene for the lamest of lame duck sessions today I do not foresee a sudden clarity of purpose.
Could there have been any larger indication that the Democrats were in very serious trouble than that they passed up an opportunity to enact tax cuts a few weeks before an election? Yes, there were (and are) differences of opinion on what bits of the Bush cuts should be extended, but those differences ought to have been bridgeable. Instead, the Democrats became frozen in fear and indecision, petrified (and not entirely without reason) that any legislation they passed, whatever the particulars, would cost votes.
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[This Thursday Re-Run first appeared November 18, 2009.]
Last week Moolanomy ran a long post on Forex Trading Basics and How It Works. Although reasonably factual, the post qualifies as bad money advice 
for strongly implying that there is a possibility that investing in forex might be a good idea. It also ends with a paid link to a forex broker-dealer.
Forex, if you don’t know, is trading in currencies, also known as foreign exchange. And if you didn’t know that, I’m sorry I told you. You could have probably lived happily ever after without knowing that this particular intersection of investing and gambling existed. Oh well. Too late now.
Superficially, currency markets are simple. A person might buy some Japanese Yen, for example, in the hopes that it would go up in price relative to the dollar. If it does, it can be sold for a profit, if it goes down, for a loss.
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SmartMoney had an attention grabbing headline yesterday. Why Cash Is the New Plastic exerted an irresistible gravitational pull on my mouse.
Could it be that cash, that archaic and germ-spreading form of money whose demise I have both lamented and encouraged, was making a comeback after all?
The first paragraph of the article reads:
Consumers are spending again, but gone are the days of swiping and signing for everything from lattes to lawn furniture. Shoppers are reaching for paper money, and as they do, stores and even credit card issuers are increasingly ready to reward them – with more cash.
So I guess slips of paper and metal disks are making a goal-line defense. Just when you thought that they would go the way of fax machines, the old school pulls it out in the end. Suddenly, consumers are coming to realize that swiping and signing is just a little too easy.
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As I have written a few times before, I consider the unpopularity of fixed annuities to be one of the larger personal finance conundrums.
Aside from the obvious problem of just not having enough money saved up, longevity risk is probably the number one challenge in planning a retirement. If you do not know how long you are going to live, how can you know how much of your kitty you can spend each year?
Annuities neatly solve this problem. You pay a lump sum to an insurance company and that company agrees to send you a check every month for as long as you are around to cash them. They even come in inflation-adjusting versions that will send you larger checks as the CPI goes up.
This sort of arrangement is practically identical to the defined benefit (a.k.a. pension) schemes that are often wistfully referred to as a part of the Good Old Days. And yet, as products, annuities are remarkably unpopular. They do exist, you can even get quotes for them online, but it is a comparatively tiny niche market. I have never seen firm numbers, but it seems safe to infer that something like only one or two retirees in a thousand buys one.
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admin | Frank Curmudgeon | 
November 17, 2010 2:59 pm | 
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