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Daily Links: Fundamentals Edition
Tuesday, 27th May 2008 (by J.D.)This article is about Spare Change
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Things are slowly returning to normal after a long holiday weekend. I only plan to post once per day at Get Rich Slowly this week, but I’ll resume my normal schedule next Monday. In the meantime, here are some other personal finance stories from around the web.
Several people sent me a recent New York Times article spotlighting five basics for building a solid financial future. New columnist Ron Lieber lays out his philosophy:
- Investing is simple. Stick with low-cost index funds, and adjust your asset allocation annually.
- It still may be worth paying for help. There’s more to money than just investing, and sometimes a financial professional can help you make better choices.
- Peers may know more than professionals. Read financial forums and blogs to get down-to-earth advice from people like you. Keep a list of sites to search for answers when you have questions.
- Everything can (and should) be automated. Like me, Lieber is a fan of paperless personal finance.
- Have the talk. Communicate with your parents, and communicate with your children. Be open about your financial situation.
Sounds like good advice — I look forward to reading more from Lieber in the future.
At Punny Money, Nick suggests that you save money on replacing expensive household items by understanding the five stages of a product’s life-cycle. You should replace things because they’re obsolete or broken, not because a new model just came out.
Elsewhere, Lynnae at Being Frugal provided a brief crash course in frugal living for beginners. She says that by changing one small habit at a time, you can develop frugal habits.
Finally, NCN at No Credit Needed spent a lot of time digging out of debt. He’s spent years focusing on his finances. Lately, though, he’s been in a bit of a personal finance funk. He’s lost his way. This is something I worry about with myself, which is one of the reasons I’ve been so reluctant to begin spending again. I want to stay focused. I want to maintain control. I’m sure NCN will get back on track, and will have learned from the experience.
10 Responses to “Daily Links: Fundamentals Edition”
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May 27th, 2008 at 7:06 pm
I like #3. Personally I read everything - even the crappy advice on finance - cause I want to be well informed and make up my own mind. Chances are if you are reading this blog you have the interest to read most finance books on your library’s shelf.
I have a hard time with #4. I guess I’m too much of a control freak. I personally like to write the check to my Roth IRA in January (or whenever I get the full amount) and decide what amount I save each month. I suppose if I had trouble saving or couldn’t write one check for the amount, I’d have it automatically deducted throughout the year.
Unfortunately #5 doesn’t happen enough. I got lucky - my dad was executor of his uncle’s will and the whole estate was one huge mess that consumed 2 years of his life. It promted my mom and dad to get everything in order for my sister and me - power of attorney, living will, etc. Plus they are even cleaning out their house periodically so we won’t have so much crap to deal with. But if we hadn’t experienced problems with my great-uncle’s estate I don’t think my parents would have gotten around to this.
May 27th, 2008 at 7:06 pm
I did a review of the Lieber piece last week and opened it up for readers to list their top five. There were a few very insightful comments.
I’m not so sure that I agree with all of Lieber’s points (he seems to contradict himself a bit), but I do agree that it should be interesting to see what he comes up with next.
May 27th, 2008 at 7:29 pm
First, congrats on the new e-book - I saw that at Zen Habits and gave it a small plug.
As for investment philosophies, I agree that one can build a diversified portfolio with low-cost index funds, but these wouldn’t be enough for me. Overall I think Lieber’s advice might be a bit simplistic. I don’t much agree with #2 - but definitely with #3.
As for frugal habits, I’ve never had much income anyway so I’m not sure there’s much more I can do. I was denied a bursary once in undergrad because I actually didn’t spend enough money in the first place! How incomprehensible is that:)
May 27th, 2008 at 7:30 pm
Good point from Nick…We are bombarded with constant ads for all the latest gadgets…Tempting to upgrade frequently but does not make too much financial sense…
May 27th, 2008 at 7:32 pm
I’d love to point your attention to this NYT article as well,
ttp://www.nytimes.com/2008/05/25/nyregion/25scrimp.html?em&ex=1212033600&en=3a026e390ef12a77&ei=5087%0A
About young people in NYC scrimping their way through being able to live in the city by living modestly and general frugality… at least, that’s how I read it!
May 27th, 2008 at 7:38 pm
I can sure relate to NCN’s situation. I’ve been in a bit of a financial funk myself lately, but I’m getting recharged for a frugal June.
Thanks for the mention! And congrats on the e-book!
May 27th, 2008 at 10:41 pm
I have to admit I’ve been having a hard time focusing too — I’m having to prod myself to look at my accounts, whereas for a long time I’ve checked them all daily. I even overlooked that I had an automatic bill pay scheduled earlier than necessary, so it’s lucky I don’t have a problem with not having enough to cover the bills in the checking anymore.
Not sure why the funk, just know I’m in a danger zone lately.
May 28th, 2008 at 6:01 am
I can relate, I’m in a bit of a funk myself and I haven’t even completely dug myself out of debt, though. I’m an applicant for Adrian J Cartwood’s 7 million in 7 years and so far its really working to motivate me and push me in the right direction financially.
May 28th, 2008 at 6:47 am
I was almost completely out of debt several years back but fell into old habits and, wow, debt can zoom up so incredibly quickly. It takes years to get it back down but only moments to mess things up.
I heard a saying once related to income (but you could apply it in reverse to debt):
“Acquiring money is like digging with a needle, spending it is like pouring water on dry sand.”
May 29th, 2008 at 11:29 am
It’s interesting that NCN has been meaning to buy “Investing for Dummies.” I’ve had that book sitting on my shelf for at least a year and I can’t seem to make myself read it because it reads like an instruction manual. Besides, I have a tendency of marginalizing those “for Dummies” books because, for me, they have that same air of yellow-bound stigma that those Cliff Notes booklets have. Silly of me to feel that way, I know, but there you have it.