The End of the Latte Era?

Every day it becomes increasingly clear that the Great Recession marks the beginning of a a New World Economic Order.  And with the new comes an end of many parts of the old.  Some will not be missed.  (E.g. no-doc mortgages, investment banks, Circuit City.) Others will be missed by the nostalgically inclined.  (Newspapers that actually print on paper, the Big Three Automakers, movie theatres.)

And last week Free Money Finance brought sad news of another part of our culture that is disappearing.  Maybe The Latte Factor is Now Less of a  Factor?  Apparently, caffeine vendors from Starbuck to McDonald’s are now cutting prices, meaning that doing without your morning fix just isn’t the compelling savings it once was.

Not that it was really ever that compelling.  Indeed, I am saddened by the news because The Latte Factor^® is such an excellent example of symbolic frugality that I will miss it.  Realizing that this may be my last chance to take it out for a spin, here goes.

Read more »

Carnival of Personal Finance

This week’s edition of the Carnival of Personal Finance is up at Wise Bread.

My post on Millionaires as Role Models is there, along with other interesting stuff, including Lies, Dammed Lies, and Personal Finance from The Dough Roller and Why I Increasingly Distrust Financial Reporting from Modern Gal.

The Famous Suze Orman

Some days I agonize over what to write about. Other days the decision is made for me.  Yesterday’s Sunday New York Times Magazine had a long story on Suze Orman, so this is one of those days without agony.

The genre of the article can probably best be described as celebrity profile.  It’s not quite a puff piece.  It mentions just enough minor flaws to give its subject some character and the author does her journalistic duty by mentioning that Orman once did advertising for GM and certainly does what she does for the money.

On the other hand, there is not much in the way of discussion of what Orman has to say, other than what is necessary to explain what it is that she does for a living to the few readers of the Times who have not yet heard of her.  Mostly, the article is about the fact that she is wildly popular right now, without much discussion of why.

Which might strike a person as a little odd if they thought of Orman as a writer or pundit.  It would be hard to imagine a story on a spike in popularity of, say, Malcolm Gladwell or Rush Limbaugh, without a few paragraphs on what made them particularly big just now and maybe even a hint of criticism from a responsible third party.

Read more »

Government at its Best

A little over two months ago I wrote a long and ponderous post on the administration’s scheme to help homeowners in trouble and cure the housing crisis.  I wasn’t very nice about it.  I cruelly suggested that it might not help the 1 in 9 homeowners that the Treasury suggested might be helped.  I feel bad about  that.  I even implied that the strong moral leadership provided by the Treasury’s guidelines would not be enough, that actual legislation would be required.

You must understand, this was in early March, back when things were really grim.  Unemployment was rising and house prices seemed to be falling every month.  I let my despair overcome my natural American optimism about all the good that government can do if we all chant “Yes, we can!”

Now that May has brought warmer weather and a buoyant stock market, let’s revisit the administration’s housing effort with all the optimism and cheerfulness that it deserves.  So two months into it, how is it going?  Great.  Well, pretty good. Not bad. To be honest, fair. A little less than expected, but it’s still early days.  Okay, really crappy, but we’re working on it.

Read more »

MIllionaires as Role Models

Free Money Finance had a post yesterday asking How Much of a Role Does Luck Play in Money Success?  This was in turn inspired by a Wall Street Journal blog post similarly titled What Role Does Luck Play in Getting Wealthy?

(I have trouble making heads or tails of that blog, The Wealth Report.  Sometimes it sounds like serious reporting on the world of the seriously loaded, e.g. Switzerland Ranks No. 1 as Home for the Rich, and sometimes sounds like The Colbert Report’s Colbert Platinum segment. e.g. Oprah: It’s Great to Have a Private Jet.  Alas, I digress.)

The degree to which financial success is correlated with talent and hard work, which is to say the degree to which money is distributed justly in our society, is a fundamental question of great importance that I don’t have the energy to tackle today.

What I do want to consider is a smaller and related question: are rich people necessarily good at personal finance?  It’s a basic premise of a large segment of the personal finance literature from The Millionaire Next Door to Secrets of the Millionaire Mind through Kiyosaki’s Rich Dad series.

Read more »