Most savvy consumers have learned that paying with credit cards can earn them hefty benefits such as points good for straight cash or other goodies like gift cards. While credit card companies do provide fraud protection, typically $0 liability but at worst $50 liability, there is something very protective and romantic about the old greenback. When you hand over a twenty dollar bill to the kid behind the register pay for something, your liability is limited to twenty dollars. That kid can run off with your portrait of Andrew Jackson and you never have to worry about him silently stealing more Jacksons (or Hamiltons or Benjamins) out of your wallet or purse. Moreover, you never have to call up the U.S. Mint and argue over how you never purchased that all inclusive vacation package to Antigua or the 9283049823″ television.

Now, there are a lot of good arguments for using credit cards, such as warranty protection, cash back, etc; but hardly anyone, except those fighting debt, argue the other side… the Devil’s Advocate side.

I drew the motivation for writing this article after reading another article elsewhere warning that you shouldn’t pay for a U-Haul rental with a credit card because they will charge you after the fact for add-ons and other “penalties.” (the website claimed this was a relatively standard U-Haul practice that I can neither confirm nor deny) While you can always challenge these fradulent charges, and you likely will, that takes time and will probably ruin your day. No one likes ruining their days.

Shady Businesses/Employees Can’t Screw You Over Later
This is the biggest reason why you may wish to consider using cash at some institutions. First, even if the business isn’t shady, a rogue employee can steal your credit card information and commit all types of fraud with it. Secondly, if the business wants to ding you for extra fees they have practically unfettered access to a pot of money with your name on it. Is that ethical? Perhaps not but that hasn’t stopped companies from doing it before.

Cash Is Very Real, Spending Is Very Real
Do you know why casinos use chips and not just cash? It’s because you don’t identify money with those chips just as you might not identify money with the credit cards when you spend it. It’s a very powerful concept that both industries have learned and it’s something many debt fighters out have been saying for years. It’s so much easier to spend on a credit card because you get immediate gratification but none of the “work” until the bill comes at the end of the billing cycle. If you use cash, you think twice before handing over real money (even though it itself is a symbol of purchasing power) because it’s real. You remember what you did to earn that dollar and you won’t let it go so quickly as you would with credit.

Liability Is Limited
As I mentioned earlier, your liability is limited to what you actively and knowingly hand over. Sure you give up that wonderful 1% in cashback benefits, but you also give up 100% of the possibility that someone can steal your card and buy all sorts of stuff with it without your knowledge. Even with $50 liability, that’s still a headache you can avoid if you just use cash.

Cash Is Faster
We’re not talking light years faster as studies have shown the difference between a credit card transaction and a cash transaction is only a few seconds (we’re talking retail sales) but when you add that up over your lifetime, that’s precious days added onto your life. You like extra days right?

Ultimately, the case against credit cards is tenuous because they truly are powerful vehicles if you are careful with them and use them responsibly (I sound like Yoda) but sometimes it may be safer just to use cash. You don’t have to swear off credit cards entirely but there may be situations where using cash is a safer option from a liability perspective. Thoughts?

Asset allocation, or the percentage of stocks and bonds in an investment portfolio, is one of the most important decisions an investor makes. Some financial experts believe that it is THE most important factor.

Many financial magazines/websites I’ve read have given increasingly aggressive advice to investors, due to the fact that most people are living longer (i.e., longer retirement) and stocks provide a better return over time. For a person my age (22), most magazines recommend 90%-100% stocks.

My current stock/bond allocation is 90% stocks/10% bonds.

For me, the most important factors in selecting an asset allocation is my need to take risk and my ability to take risk. Everyone’s risk tolerance is different – I’d rather choose an allocation that might be a little more conservative than what experts recommend (80% stocks, 20% bonds, for example) but that I know I can stick with for the long-run. Selling in panic during a market downturn is rarely a good strategy.

My need to take risks is high: I don’t have much investable assets and no inheritance or lottery winnings in sight. If I put my money in “safe” investments such as money market funds or all-bond funds, I won’t have enough after-inflation returns to support a comfortable retirement.

My ability to take risks is also high: I have six to seven decades in the market (assuming I live to 90, not an unlikely assumption for a healthy female in the U.S.). I can ride out the exhilarating highs and dismal lows that the market tosses my way. I believe that in the long run the market will provide real returns, and am committed to staying in the market through the peaks and valleys.

I have never had money in a bear market (think the late 1970s and 2000-2002), however, so my “stay the course” mentality haven’t been tested by a 50% drop in portfolio value.

So, for now, I went with 10% bonds in my portfolio. As I add money to my investment portfolio in the upcoming months, I may lower my bond allocation a bit.

“Well-heeled: twentysomething life & money” follows my journey as a soon-to-be college graduate with almost $20,000 in student loans. I started this blog last year after realizing that I can’t stay in the warm financial cocoon of college forever and need to get in touch with my inner money maker/manager. I’m learning about investing, insurance, tax planning, etc., as I go along – hopefully other twentysomethings will find interesting or useful information in my stories (non-twentysomething readers also welcome).

Hey everyone, I’m currently living it up in China and will be for another week or so, poking my head in from time to time to make sure things are okay when I have some free time. The trip has been great so far, we’ve been able to see a lot of the sights in the Shanghai, Huangshan and neighboring regions and now we’re in the midst of buying a lot of goodies to bring back to the states, many of which are wedding related. (yikes) There’s a tremendous amount of construction and growth in the city of Shanghai, much more so than one could picture without actually seeing pictures or coming here. The disparity in wealth is staggering, even within the city itself, you have people driving million dollars cars able to get out and eat dinner for 8 for under $25 USD (and it’s phenomenal food too). Want a tailored suit? $75. Tailored shirts? $12. Silk ties? $1.50. It’s stunning.

The city itself is amazing to look at as well, it’s like they took pictures out of what Asimov would’ve envisioned for the future and built it, lots of glass buildings with unique and quite imaginative designs. Perhaps pictures will be up in the future, until then, feast on these domestic treats:

• JLP discusses his disdain for both payday loans and the implication that borrowers are victims and not willing participants. I totally agree.
• MBH shares his local weekend yard sale loot haul.
• FMF writes about eight work perks you probably wished you had. A break on the mortgage sounds pretty darned good!
• Nickel has a great tip on how Vanguard will waive account minimum fees if you agree to accept electronic documents, a win for you, a win for Vanguard, and a win for planet Earth!
• Flexo writes about the fifth couple living on $47k.
• Did you know that if you have more than $25,000 saved for retirement you’re ahead of the curve? It’s seems remarkably low to me, remarkable and very disconcerting.
• Someone bought a Wii! Consume consume consume!
• Golbguru has a post about how much it costs to repair damage from low speed hits to the bumper (and the lights, etc. that the bumper is meant to protect), something that I think I’ve heard on NPR before but never saw in writing before. Low speed meant 3 mph for corner hits and 6 mph for head on… max damage was to the Maxima at over 9 grand. A good read.
• I’ve been trying to keep up on Jeremy’s series on 24 signs you could be in financial trouble and the second to last one, numero 23, is a good one – lack of a well-defined goal and a plan to reach them. Incidentally, you should read the other 22 he’s put up already because more than a few of those are gems as well.
• Do you have a Bank of America account and ATM card? You can get free admission into 85 museums during the month of May! Details.

If there is one universal fact in the world, it’s that human beings are by nature very curious creatures and in no other place is this more evident than in one of the most inaccurate means of productivity and usefulness analysis – the work interview. I’ve personally never been asked any particularly strange questions and I’ve had my fair share of interviews but I’ve certainly heard of some strange questions being asked (I’m not talking about those “how many gas stations are there in the United States” questions, I’m talking out there questions) and I wanted to know if you all had any particularly eyebrow raising queries.

The strangest “question” by far, and this is more of a request than a question, was when my friend went to interview with an engineering firm and they made him take a personality test. Now, I doubt the usefulness of a personality test but if they put one in front of me, I’m going to oblige… if it wasn’t going to take me three hours to finish! My friend took the test (not realizing it would take three hours, he just thought it was long) even though he wasn’t all that sold on the job. If a company every put an SAT test in front of me, I’d thank them for their time and politely excuse myself. That wasn’t really a question but that’s certainly the most unusual question/request I’ve ever heard of.

Do you have a question or request that can top a three hour personality test?

Devin Wanzor is a senior at Oklahoma State University majoring in Finance. The majority of his spare time is spent golfing, reading personal finance articles/books, and renovating his condo and getting it ready to sell.

Majoring in Finance in college has helped me learn a great deal about taking care of my personal finances, as well as other advanced topics. What about people who aren’t Finance or business majors in college, or what about people who never go to college at all? I think that, in general, most of the classes I took in high school kept me busy, but lacked any knowledge that will be useful to me in my lifetime. There is one big topic that I think will be useful to everyone most of his or her life: money. It makes sense to me to teach these topics in high school, instead of having kids memorize vocabulary words that they will forget next week. I remember very little that I learned in high school, except for math and English skills.

You might think that since I am a soon-to-be finance professional, I would like to have a financial illiterate public to drive my business, but I believe that as more people learn about more sophisticated products (IRA’s etc.) then actually there would be more people in the U.S. seeking out advice and trying to make responsible financial decisions. In my opinion, a more informed customer is usually better.

Here is my 4-year plan of what kids should be learning in high school about money and personal finance:

Freshman:

1. Checkbook Mechanics – Writing, balancing, statement reconciliation, etc.
2. Saving for Larger Purchases

I cannot remember exactly when I had my first checking account. I don’t think it was before I was a freshman though. I think this is a perfect time to teach this skill, perhaps before that first checking account is opened.

Sophomore:

1. Earning Power – Jobs for young adults
2. Automatic Monthly Savings and the Power of Compounding
3. What Happened to My Paycheck? (Meet Mr. Taxman)

I think it is important for young people to understand taxes and exactly why the government is taking them (or why the government SAYS they are taking the money). Also, since this is around the time I turned 16, it is a good time to learn about jobs since they would be able to drive themselves to said job. Lastly, if a steady income comes about, this would be the perfect time to see how saving a little money each month can turn into huge amounts over time when the money is earning interest.

Junior:

1. College: It Will Cost HOW much?
2. Introduction to the time value of money: Today is better than tomorrow
3. Budgeting: How to spend less then you earn. (How to break the trend of a Negative savings rate in America)

I think people should understand the costs associated with college and learn how to make a plan to get there. I think the budgeting thing pretty much speaks for itself.

Senior:

1. How will I ever own a house? Introduction to Mortgages
2. 401(k)’s, IRA’s and other retirement savings vehicles
3. Investments: Stocks, Bonds, CD’s, Mutual Funds and other investments
4. How to use credit cards wisely

All of these are topics that will be important to all Americans. This tops off the list of some of the personal finance topics that I believe are very important to the financial health of Americans.

Are there any other topics you believe are important, yet not so advanced that a high school aged person could understand? Are any of my suggested topics perhaps too advanced?

When you start the book, you might be tempted to think that You Call The Shots will be just one big lovefest about Cameron Johnson, how awesome he is, how enterprising he was, and how just gosh darn great it was that a young guy like him was able to do so much. In fact, the beginning of the book goes pretty heavy on the credentials, which is a fair way to start a book if you think that you’re going to learn all the great business ideas from someone in their early twenties, but I see the value of the book elsewhere.

You Call The Shots breaks down your traditional thinking about working, earning a living, and making money by taking you along a journey started by a kid who didn’t know he wasn’t supposed to be successful starting businesses online. Cameron Johnson isn’t some child prodigy who was given a head start either, he started as a kid not willing to fit what society thinks children should do, and he just did whatever he wanted – and it worked. He became a sales manager at his family Ford dealership through hard work, not nepotism (in fact, he said that being the son of the owner probably made his ascension much harder, which is probably right), and he started multiple businesses just because he had an idea and the moxie to execute.

Sure, the book offers 19 secrets to entrepreneurship (and they are excellent secrets framed with even better anecdotal recounts) and it follows the wild ride that was and is Cameron Johnson’s life, but the value is really in that it shows what happens when you’re willing to ignore what other people think you should be doing and doing that which you love.

I really enjoyed reading this book and it’s one of the few books that I’ve reviewed where I’ve read it from cover to cover, in part because I identify with him and his personality and also because I’m a sucker for these anecdotal books. If you are the enterprising, entrepreneurial type, I strongly recommend picking this book up and reading it (and to date, I don’t think I’ve given as strong a recommendation for any book I’ve reviewed).

As a part of my new job, I’ve had the chance to review a few resumes to try to find good software engineering candidates (let me know if you’re looking for a job, can develop software well, are in the Baltimore region, and you aren’t Rob ) and I’ve seen more than a few interesting resume bullets in my time. The top candidate, and I argue that you probably aren’t going to find anything to rival this, has to be when someone put on their resume that they were the leader of a 6,000 member clan (guild?) on World of Warcraft. That isn’t, by any means, a negative at all (it shows leadership skills, interpersonal skills, and a whole host of other attributes that are very positive in a candidate) but it was surprising to see it on a resume because, at least I think, World of Warcraft is a means of entertainment.

At first I thought this was a peculiar item to put on your resume but then I thought about how we have a double standard here. If you saw someone was the captain of a mainstream varsity team sport, like basketball or football, would you react the same way? Definitely not. You’d think the candidate was a good leader, had good interpersonal skills, hard working, etc. I’d argue that being the leader of a clan in World of Warcraft (granted I’ve never played but I can imagine the hierarchal structure there isn’t that much different than any other game) is probably much harder than being the captain of any sport. If he joined after the clan started, he had to ascend past the other 5,999 members. If he started it, he had to, in some way, shape, or form, recruit 5,999 other players to join his clan. I don’t know how many players there are on a high school and college football team (though it’s under a hundred, probably under seventy) and there are only 12 players on a basketball team (again, not sure the limits at the high school and college level), so 6,000 trumps that by several orders of magnitude.

Anyway, what’s the most remarkable resume bullet you’ve ever seen?

The internet really has only been a place of commerce for about a decade now, and still people are searching to find their gold mine on the internet. A lot of people want to strike it rich, yet a lot of digital miners end up finding nothing but fool’s E-Gold. There are a lot scams for businesses on the internet, and you need to avoid them like the plague. But how does one know that a business is a scam? There are some big red flags that you will notice about a company to determine whether or not it is a scam. If a company has any of these red flags, you should be very wary about dealing with them.

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I really do enjoy seeing the annual numbers for new hire pay because it gives me some blogging fodder and since I’ve been doing it for a little while now I can really look back at historic number to see how this year compared to last year and this year is especially juicy. According to the National Association of Colleges & Employers (NACE), practically every field saw a jump led by marketing majors who saw starting offers increase a whopping 10.3%. Now, sometimes this is a result of languishing salaries and this may be the case here as the average salary was $41,285, which ranked second to last on the chart displayed. Computer science grads saw a mere 2.5% while the Mechanical engineers can expect a 5.7% increase and Chemical engineers saw a healthy 5.6% increase.

Last November, we saw Information sciences and systems major salaries increase by 7.5%, the highest increase, and marketing major degrees didn’t even make the list. Accounting saw a 4.6% in 2005 compared to 2.7% this year. Chemical engineers saw another “higher than inflation” increase with 4.9% – I’m sure oil prices with the continued prosperity of chemical engineers. Here’s another salary comparison list too if you want more data points.

Source: CNN Money

Have you ever known anyone that has found themselves with piles of debt, and yelled “WooHoo! Hey Honey, We’re doing great! We have huge piles of debt!” Of course not. No one is excited about being in debt. If you asked every American if they would like to be in debt or like to be debt free, 99 out of 100 would easily tell you that they would like to be out of debt. Generally a person’s home is their largest payment, and their largest debt item. Wouldn’t it be great to own a home free and clear? Your grass will feel different, trust me! So why not buy the mortgage that will enable you to have your home paid for the quickest?

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