Carnival of Personal Finance #210

Part of the deal when you participate in a carnival is that you link to it from your blog. My weekly Carnival of Personal Finance links have been getting less perfunctory lately, to the point where I thought I would try making a proper post of it. It’s an excuse to discuss a lot of personal finance advice from several blogs at once, which certainly fits into the theme of BMA.  So here goes.Fenway_park

The carnival is hosted by Suburban Dollar this week with a delightfully kooky theme, the beyond vintage video game Mike Tyson’s Punch Out.

One of four editors picks this week was Happy Rock’s post 16 Year Old Skips The Last Two Years Of High School To Play Proffesional Baseball.  The gist of the post is that this is a bad thing. It is about Bryce Harper, a 16 year-old from Nevada recently featured on the cover of Sports Illustrated, who dubbed him the "Chosen One". He plans to skip out on 11th and 12th grades in order to enter next year’s baseball draft. This is a maneuver that will probably net him a sum in the high seven figures.

How could this possibly be a bad idea? I know guys who would pay in the high seven figures to play professional baseball.  And some of them would pay extra if they could’ve avoided the second half of high school. Granted, Bryce’s education will suffer. He might, for example, not learn how to spell "professional" or the difference between "to" and "too" or (gulp) "beat" and "beet".

The blog Sound Money Matters shared Nine Signs It’s the Right House For You, and One Sign It Isn’t. Apparently being sound with money involves being as emotional as possible when shopping for a house. This is also the first of at least two posts in this carnival whose current title does not match what browsers think it is called. I believe this is an indication that the title was changed, but I am not technologically hip enough to be sure. IE thinks this post is called "Ten Ways to Know You Found the Right House for You".

Weakonomics had a good post explaining why everybody is talking about inflation and what it might mean.

Fiscal Geek had arguably the most practically useful post of the carnival on how to Revive your Cell Phone or Electronic Devices from Water Damage. The instructions are seriously non-obvious. I’m hoping never to have the opportunity to test them out, but if I do and it works I will feel very clever and talk about nothing else for several days. has an explanation of why The Transition to Dual-Income Families Has Not Increased the Wealth of the Nation, i.e. the material well-being of those families. It is sure to upset the earnest liberals who like to bemoan the plight of the middle class. Families are no better off today with two incomes than they were thirty years ago with one because of higher taxes. I don’t know if that is true, but I love how it upsets conventional wisdom.

Green Panda Treehouse had an evenhanded discussion of Suze Orman. (And what’s the fun in that?)

Don’t Quit Your Day Job posted on how investing in the company that employs you is not a bright idea. That ought to be an obvious point, but given how often people double down on their employer through stock options, ESPPs, etc., I guess it is a point worth repeating over and over again.

Taking Charge gave us some mildly amusing stories of recently caught identity thieves. My favorite is the 25-year-old who stole mom’s credit card and ran up a $300 phone sex bill. (People still do that?) Mom called cops. Son is looking at 10 years.

And finally, The Digerati Life shared the post Can Stock Trading Software Make You Money? The one and only correct answer to that question is "of course not". Stunningly, the author takes a stand I think can be described as cautiously optimistic, repeating some of the possibly illegal claims of the vendors of these things. I wonder if she’d be interested in a beautiful older bridge over the East River I have for sale.

Anybody who seriously entertains the idea that a software package that they can buy will beat the market should ask themselves the following question. If you wrote a piece of software that beat the market, would there be any circumstances under which you would sell it to others?

This is the other post that has another title under which it is known to browsers.  This one’s other name is "How Stock Trading Software Makes You Money". Unless you are the snake oil salesman pitching it, it doesn’t.


  • By My Journey, June 23, 2009 @ 10:25 am

    I have a buddy that literally does that – writes software for derivatives trading, and NO he doesn’t sell his software.

    In fact, he gets paid lots of money (more than I’ll EVER make) not to sell his software!

  • By Ron@TheWisdomJournal, June 23, 2009 @ 10:47 am

    Nope, I wouldn’t sell it (market beating software) unless there were three numbers in front of the first of two commas. :)

    And believe me, if I could have gone pro at 16, I would have taken that chance … and here, 27 years later, I actually know I wouldn’t have missed a thing!

    Love the link roundup — no, actually, I love your comments about the link roundup! Haha!

  • By Kosmo @ The Casual Observer, June 23, 2009 @ 11:13 am

    Harper’s a good student (3.5+ GPA), and the plan is that he’ll have his GED and be enrolled at a community college next year – it’s not as if he’ll be sitting on the couch eating chips and playing xBox for a year.

    Also, baseball draftees get a free education at the team’s expense, if they so desire. Some take advantage of it, some don’t.

    I doubt that Harper will get high seven figures, though. He’ll most likely get eight figures :) He’s a slam dunk to be the #1 big next year, barring disaster – it’s not as if he’s a borderline first rounder.

  • By The Happy Rock, June 23, 2009 @ 12:45 pm

    I understand the purpose of the site, but you really can’t be serious about “How Could This Possibly Be A Bad Idea?”. Let’s talk to some child actors who have crashed and burned or maybe lotto winners who are regret ever winning.

    Ever talk to a child that was forced in sports and camps, so that their parents could live their lives through them or for financial benefit? It is not a pretty site.

    My article made no mention of missing out on ‘education’, but it did to the maturity/wisdom that can be gained by having a few more years to ‘grow’ up.

    Financially, you probably can’t come up with a better choice, but is money the only consideration in life?

    On a side note, the title for web browser is often purposely different than the article title. People attempt to use on for search engines and on for people. Don’t know if that is the case for that article, but is a common practice.

  • By gpr, June 23, 2009 @ 1:11 pm

    Happy Rock:
    I think you would also need to talk to some child actors who did well, and have happy well-adjusted lives. Or the ones who took the money, quit acting and went to Harvard. That girl on the Wonder Years is a famous mathematician now.

    I would guess that for every lotto winner who regrets ever having won, you can find bunches more who don’t regret it a bit. They’re just boring to write about (“man wins 20 million, invests well, is comfortable and happy” is a crappy story).

    As humans we love the story of total failure after spectacular success (shame on us, huh?).

    I think these stories mess up our calibration for the reality of the situation.

  • By Kosmo @ The Casual Observer, June 23, 2009 @ 3:15 pm

    Oddly, his life might be MORE normal by taking this route. Right now, Harper plays on a bunch of All-Star teams and spends a lot of time on the road, often with guys who are temporary teammates. The community college might offer more structure (since there is more regulation), especially since he’ll be on the same team with his older brother.

    Notice that I said “might” :)

    gpr – Shirley Temple Black (ambassador) and Ron Howard (director) are other good examples.

  • By The Happy Rock, June 23, 2009 @ 3:19 pm

    @gpr – From what I have read the lotto winnings group has disproportionately negative stories to positive ones, but that could be due to a wide range of reasons. The first of which is that the group is self selecting.

    Either way I am not sure that having some success stories changes the argument unless we are saying that things like maturity, instant wealth, and environment don’t have any bearing on the probability of success/failure. I am not of that opinion, which is partly why I was interested in the piece.

  • By Jim, June 23, 2009 @ 8:04 pm

    The Pennyjobs article is based on another article that compared a single income family in the 70′s to a dual income family in the 2000′s. The dual income family actually had 75% higher income in real dollars. So its not an apples to apples comparison as far as income, spending or tax rates. The income is significantly higher so the taxes are also higher.

    Effective tax rates are similar now or even less than they were 30 years ago for median income households.

  • By Four Pillars, June 23, 2009 @ 9:26 pm

    I think he should go pro if he’s that highly rated. It’s the “average” prospects who are more likely to lose out by following their dreams although even they might be able to put together a decent minor league career.

    As mentioned – the “meta” post title is the one that the search engine results page shows. The one on the blog is for the regular readers.

  • By Frank Curmudgeon, June 24, 2009 @ 7:22 am

    Jim: I’m disappointed but not surprised.

    Four Pillars: It seems very unlikely to me that the “meta titles” mentioned here were written to attract search engines. Maybe if it was “How Stock Trading Software Gets You Free Porn”.

  • By Four Pillars, June 24, 2009 @ 9:18 am

    Frank – I can guarantee you that the meta titles were written with search engines in mind. One reason is for keywords, the other is to make it more appealing for potential search engine visitors (who are the ones who click on your ads).

    For the house post the author simplified the title for the search engine results page and for the trading software she made it more positive and definite (ie how to make money vs can you make money).

    As for the “porn”? I guess they left that keyword out. :)

  • By Neil, June 28, 2009 @ 4:13 pm

    “If you wrote a piece of software that beat the market, would there be any circumstances under which you would sell it to others?”
    In answer to your rhetorical question, the answer is yes. If the amount of money that can be made through the sale exceeds the amount of money I can make through beating the market.

    (Though it does seem more likely that the seller of the software will simply have a “master” copy that knows what all his customers will be buying before they buy.)

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