Free Money Finance had a "Help A Reader" post the other day with an email from a woman asking if folks thought it was a good idea to take money out of her mutual funds to pay off $24K in credit card debt.
The broad consensus from commenters on the post was yes, cash out the mutual funds and pay off the cards, 
provided those funds are not inside an IRA or something similar. Okay, fine.
A few commenters obliquely approached the core craziness here by asking if the reader would have borrowed money on her credit cards to invest in the mutual funds. Of course that sounds like a really loopy idea, and of course that is what she (effectively) did.
Not paying off a credit card or other high-interest consumer debt so you can save or invest is, or at least should be, an intuitively bad move. The returns on the investments are unlikely even to approach the cost of borrowing the money.
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Back on the web now. My apologies to everybody who missed me. Living without broadband for two days was quite an experience. It would make a good reality show, maybe for PBS: 1980s House.
Speaking of being wired up and of decades past, when I sat down to catch 
up on what I had missed I came across a wonderful item. The U.S. Consumer Product Safety Commission announced the voluntary recall of nine books on home improvement. Printed in China with lead-based ink? Not exactly.
The books contain errors in the technical diagrams and wiring instructions that could lead consumers to incorrectly install or repair electrical wiring, posing an electrical shock or fire hazard to consumers.
Several aspects of this story amuse and/or fascinate me. And there are implications for that other great and dangerous DIY area, personal finance.
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I like television. I don’t love it. Outside of baseball season I’m not a daily watcher. But it’s a nice thing to have in the house. I even think of it as a relatively cheap form of entertainment.
Much cheaper, for example, than its closest analogue, going to the movies.
Apparently, I was wrong. Turns out, each hour of TV watched costs me $4 in increased spending. This from Juliet Schor, currently a Boston College sociologist:
"Television viewing results in an upscaling of desire. And that in turn leads people to buy." Her study found that every additional hour of TV viewing per week boosts spending by roughly $200 a year.
(This from Money Magazine at CNNMoney.com via Consciously Frugal via Fiscal Fizzle via ABDPBT. The opportunity to run a fourth generation link was not the only reason I picked this topic, BTW.)
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Trawling The Consumerist for something to write about I was excited to find a post entitled An Argument For 401(k) Minimizing. It turned out to be about a post at Punch Debt in the Face that, at most, argues against 401(k) maximizing. Still, that’s something.
I like Punch Debt in the Face. Although I am clearly at least a generation too old to fully relate, and the layout still reminds me of a ransom note, the Twitter graphic alone is worth the click. And the blog’s author, Debt Ninja, is endearingly hostile to conventional wisdom and insists on doing his own math. My kinda guy.
Debt Ninja’s post contains what ought to be a mundane discussion of reducing his 401(k) contribution from 8% to 5%. He also contributes to a Roth IRA and makes the argument that being a very rich 60 year-old in exchange for being an impoverished 25 to 59 year-old is not a good deal.
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Saturday night before last, Suze Orman issued yet another directive to her followers about credit cards. Readers may recall that back in March Suze told 
us that we should make only the minimum payments on our cards until we had an emergency fund equal to eight months’ expenses built up. That inspired one of my many unsuccessful business ideas.
Well, March was a long time ago. Stock and house prices are up, the recession has ended, and it even looks like the unemployment rate has crested. So I guess it is time for Suze to change strategies once again. This time the idea is to drop the cards. "Let’s go back to the times when you literally paid cash for everything. That’s right. Cash. Stop using your credit cards altogether.”
I don’t watch Orman’s show. I found out about this from a post at SmartSpending, as well as a post at Get Rich Slowly. That post, written by our friend Baker from ManvsDebt, has the virtue of an embedded video of Orman challenging us to spend only in cash. You can even sign up to join her Back to Cash Movement.
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provided those funds are not inside an IRA or something similar. Okay, fine.
Credit Cards, Gurus, PF Blogs | Frank Curmudgeon | 
January 13, 2010 12:59 pm | 
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