Continuing in the spirit of the tax season, this week saw at least two blogs, Weakonomics and Wallet Pop, asking if allowing taxpayers to deduct 
mortgage interest is really, after all, a good idea. Both wasted little time before concluding of course not.
In as much as this policy has any sincere defenders, the argument in favor is that it encourages home ownership. But why home ownership, of all things, is a worthwhile goal is generally left unexplored. I suppose a person might imagine some sort of Jeffersonian argument about how a nation of property owners makes for a more stable democracy. Alas, our leaders in Washington are rarely so philosophical.
When a politician says that he favors mortgage deductibility because it encourages home ownership it is a wink and/or nod in the direction of those who already own homes. It is an important bit of government largess for these voters because they get a nice tax break and, possibly more significantly, anybody they sell their house to will also get a nice tax break.
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I like Wallet Pop. Just thought I’d throw that out at the start before I got into today’s topic.
The other week Wallet Pop ran one of those lists-with-stock-photos features that are popular on sites with a lot more production value than this one. The subject was 10 Bad Habits and What They Cost You. It is a list of minor vices and what they will set you back over the course of the year. The feature does not actually say that if you didn’t do these things you’d be rich, but we know that’s what they mean.
This is, of course, the latte thing again. The idea is that your budget is leaking cash on a daily basis to pay for little luxuries and conveniences. Plug those holes and all will be well. And Wallet Pop gets a total annual cost for its collection of indulgences of $12,289, which is real money for many people. The difference between saving and spending that amount over many years could translate into a significant difference in retirement lifestyle.
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I have just discovered that Consumer Reports, the go-to place for the lowdown on vacuum cleaner reliability, also gives personal finance advice. Who knew? Today I stumbled across their Money Blog, which carries a post on how 
you should pay off your mortgage before you retire. It is enough to make me worry about their vacuum cleaner wisdom.
Permit me to quote the first two paragraphs:
Back when the stock market seemed to go in only one direction—up— you could make a decent case for keeping a mortgage as long as possible. Why rush to pay off a debt at, say, 6 percent, when the same money, invested in the stock market, was all but guaranteed to return 10 percent?
That kind of thinking may help explain this startling finding in a just-released Society of Actuaries report: Only 48 percent of retirees surveyed in 2009 had completely paid off their mortgages, compared with 76 percent in the group’s 2007 study.
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A search of this site shows that in what is fast approaching 300 posts I have never discussed collectibles. Although it is true that there is relatively little bad money advice out there on this topic, just about everybody who mentions it, 
even in passing, says it is a poor place to invest, it is an area in which people often make money mistakes. So not writing at least one post on it is an oversight that needs correcting.
In particular, I want to talk about a scheme to make money that has, at the very least, occurred to all of us at one time or another. It is the buying, or merely not disposing of, the near-valueless non-collectible in the hope that it will one day become a valuable collectible.
The reason this has occurred to us all at some point is that the collecting world is full of examples of easy-money-in-hindsight. Just spend time on eBay. A quick scan this morning tells me that the first issue of Cigar Aficionado magazine (Autumn 1992) goes for $250. It was $3.95 on the newsstand. That’s an annualized gain of nearly 26% for 18 years. If only I’d thought to buy a thousand copies.
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Right on schedule, March went out like a lamb. The daffodils in my front yard are swaying in the breeze and that special occasion that marks the
cultural start of spring for many of us comes this Sunday. (It’s the start of the baseball season. What did you think I meant?)
In the frugalosphere, March was a time for both revisiting old ideas and exploring new ones. We had a follow-up from Provident Planning on Bambi the male “cow” being raised in a back yard for beef. It has an embedded 61 second video of the beast eating grass.
And one of my favorite frugal tips from last year made a sudden resurgence. It took a while, but apparently fonts chosen, and in some cases designed, to save printer ink are finally getting some traction. Not much mention of my suggestion to favor words that contain ink-saving letters, such as i and l, over such ink-hogs as e and w, but I am sure that the frugal world will get to that soon enough.
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mortgage interest is really, after all, a good idea. Both wasted little time before concluding of course not.
Government, Housing | Frank Curmudgeon | 
April 9, 2010 11:59 am | 
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