Last Friday I had the good fortune of winning tickets, through my company’s ticket giveaway program, to see Bill Cosby at Wolf Trap in Virginia. I, like many in my generation, am huge fan of the comedy icon that is Dr. Huxtable so seeing him live was a real treat. What was also nice was that because they were corporate tickets, we had access to the Encore Circle. The Encore Circle consisted of a few tents and a cabin beside the amphitheater and it was really nice to have a place to hang out an hour before and half an hour after the performance. They had complimentary coffee, tea, lemonade, soda, etc. and the tickets came with some free cocktails too. After the performance, they even had cookies!

Seeing Bill Cosby live was incredible and seeing him do stand-up (though he sat most of the time) for two and a half hours was unreal. The man is less than two weeks from his seventieth birthday and he was doing stand-up comedy for two and a half hours. At one point he was on his hands and knees giving some folks in the front row a nice grilling about parenting that had the crowd rolling.

His comedy is definitely for the older crowd, versus the just out of college crowd, but it was hilarious. If you ever have the opportunity to see him, snatch it up, he’s pretty good and the man is a legend!

I wanted to reach out to all of you again to see if you could spare it in your budget to send a few dollars to the Make A Wish Foundation. My buddy Scott is organizing the third Ghent Bar Tour benefiting the Make A Wish Foundation and FMF and I have agreed to match dollar for dollar donations up to $1000 for anyone who donated and let us know. Right now, to my knowledge, only one person has taken us up on that (much link love to No Credit Needed and his generosity!); so please, if you can spare it, any amount would help the cause!

You could always jump on the $250 American Express business card promotion and take a part of that and send it to MAW. I think you’ll want to act quickly because the $250 Chase Freedom card promotion was available and gone very quickly.

Now, onto this week’s roundup…

• As if you really needed it (if you do, then read this article), but here are five reasons you need to care about your FICO score.
• Use your turn signals in Virginia or suffer the wrath of a $1,050 fine! This law in Maryland, if enforced, would net the state billions.
• I guess a million doesn’t buy you much anymore these days, according to Jonathan Clements, it won’t set you up for a comfortable retirement either.
• Looking for ways to cut vacation costs? FMF lists five ways.
• Flexo answers a reader question about timing credit card payments.
• SVB looks at the Google Doodler and proclaims it the best job in the world!
• At Money Smart Life, read about the power of marketing and the power of Victoria’s Secret. “Fairly regularly, they send people a certificate for a free pair of underwear - no strings attached. When we use it, though, reciprocity tells us we should really probably buy something else.” So true, so true.
• Lazy Man is running a pretty juicy contest (his first!) where you can win a $200 high end leather briefcase.
• Do you have anything against Wal-Mart? I personally don’t but you’re welcome to share your thoughts with Golbguru.
• Sun talks about his mid-year adjustments, which is always a smart move. Personally I think that once a year is a bare minimum but when you only course-correct once a year, you might miss something or react too slowly; so give your stuff a once over.
• Jeremy points us to a free personal finance course at UC Irvine, sounds interesting!
• At my Home Insurance Guide, I outline the importance of comparison shopping for homeowner’s insurance, though it applies for everything. The difference is staggering.
• Do you have lots of free time? Check out these 30 free ebooks about personal finance over at Mint.
• At Roth IRA Explained, I discuss when Roth IRA contributions can be made.
• Curious about reverse mortgages?

I think there is still an overwhelming belief in American society, despite how far we’ve come in gender equality (19th amendment, women’s suffrage, is less than a hundred years old), that the male is the breadwinner and the female is the homemaker - which leads to some consternation when the female out-earns the male. Despite the gender neutral title, I think this question is more acute if you’re in a heterosexual relationship and you’re a guy who comes from a more fairly traditional family with a single breadwinner, your father. (I don’t know the dynamics of homosexual relationships, but it would be nice if someone from Queer Cents could share their two cents on this)

So, if you’re the guy and your girlfriend, fiancée, or wife made more money than you, would you be bothered by it? If you’re the girl and your boyfriend, fiancé or husband made less money than you, would you be bothered by it, insomuch that you’d be afraid of making him feel bad?

I’d say that in my situation, I’d be okay with it in part because I see it more like “us” and less like “me and her,” if that makes sense. One of my friends and his wife, I know that very soon one day the wife will out earn the husband. The husband is perfectly fine with that because he sees it as a team so there is never the consideration of “her” out earning “him,” it’s “they” out earning “old they.” I think that’s healthy but not necessarily the average reaction.

I also think it’s perfectly acceptable to be bothered by it for a variety of reasons. If you and your SO one day want to drop to one income and raise children, just so one of you can stay home with the kids, I do believe that the mother is better at raising children than the father (before you scream gender discrimination, just consider the biological advantages of mothers). If the mother out earns the father, it’s harder to replace the higher income and so there’s no doubt in my mind that the father feels pressure.

Thoughts?

You’re going to be poor forever, you suck at life, and you’re a terrible father/mother/brother/sister/husband/wife/whatever. Okay, now worship every single word I say because I just gave you a wake up call. You didn’t know that you were going to be poor forever, but since I have a microphone, you have to listen to me. You didn’t know you sucked at life either, but thankfully I was here to clue you in because I am the expert on people who suck at life, right? Worship me!

Who the hell is Dave Ramsey? When I read his quote on Money Musings about car payments:

Car payments are the mantra of the middle class. As long as you keep a car payment, you’re going to be mediocre in your finances. It’s just stupid. Avoid that. Pay cash. Save up and pay for whatever you do.

Car payments are stupid! Don’t get a car that will get you to your job, just walk there or ride the bus until you’ve saved enough money to pay for the whole thing on cash. Ignore the 0% financing for 5 year offers because taking on debt is stupid. This is the same guy who said pay off the smaller debts first because that will give you a psychological boost in your fight against debt. Ignore the numbers you moron, just pay off the smaller one so you can feel better about your miserable self!

Everytime, I see Suze Orman on TV when I flip through channels and her bleached blond hair (so she could fit in with the younger crowd?) chastising someone for being irresponsible, it irks me (because I don’t want to use stronger language). People don’t need to be talked to like children, they don’t need to be scolded by someone who looks down upon debt but then stars in Buick (I think) commercials and 0% financing just to make a buck. Her popularity is akin to Judge Judy’s popularity, but at least the people Judge Judy scolds like children actually broke a law (or were unfortunately both the defendant and male).

That’s probably why I’ll never be on TV, I’m not incendiary enough or downright disrespectful enough to convince people addicted to schadenfreude to watch me flip out on people.

I posted a recap after the first six Devil’s Advocate posts so it only seems appropriate I post a recap now that we’ve added eight more to the set, in case you missed any. In this set we’ve spanned almost the entire personal finance spectrum hitting on investing, budgeting, debt, and even marriage. The Don’t Get Married post led to some fun in the house for me.

Also, I’d be interested to hear what you all thought of the whole Devil’s Advocate series in general - stupid? interesting? gimmicky? fun? Any and all comments, critiques, questions, potential topics, whatever… please let me know!

• Invest In Your Company - You know your company right? You probably know it better than company XYZ, which you may have considered investing in, so why not put a few dollars towards something you at least know?
• Don’t Budget to the Penny - Mostly because it will drive you nuts, make it harder for you to stick with it, and totally unnecessary.
• Pay Cash for Everything - It’s absolutely safer than using a credit card, no one can argue that (no one can steal your dollar and spend $29308423 on it), and your liability is limited to the dollar amount you hand over.
• Adjustable Rate Mortgages Are Awesome! - This was a guest Devil’s Advocate post and it advocates that ARMs are awesome because you pay less and you probably will move out of your house soon anyway.
• Buy That Home Warranty - This one advised that you get a home warranty because right after buying your house, that’s when you’re probably the most cash strapped… so it’s important to have insurance to weather the problems now, when you’re low on funds.
• Don’t Get Married -
• Four Reasons You Should Get A PayDay Loan - PayDay loans, by their very nature, are not evil; it’s when you fall behind that they get you badly.
• You Don’t Need College to Succeed - Oh yeah, I said it; college guarantees debt but does not guarantee success.

One of the classes I’ve been taking involves investing, discounting cash flows, blah blah; and so one of the things we’ve touched upon is retirement savings. One of our recent problems is calculating how much you need to save in during pre-retirement in order to guarantee (based on assumptions) a future cash flow. So, rather than study the textbook and answer problems with very little payoff (yeah yeah, I have a test), I figured I’d create my own problem and submit it to you all to see if I did it correctly.

Q. How much do I have to save each month for the next forty years in order to ensure that I can withdraw $5,000 a month, in 2007 dollars, for the next twenty years?

Assumption #1: No taxes.
Assumption #2: Inflation will be 3% a year for the next 40 years.

Given that assumption, $5,000 in purchasing power in 2007 will be $16,310 in 2047, so you’ll need to have enough retirement assets such that you can withdraw $16,310 each month ($195,720 a year) for the next 25 years. In order to calculate that amount, you’ll need to know the rate of return on your assets during those 25 years, as you draw it down.

Assumption #3: Your post-retirement assets will appreciate at 5% a year.

At 5% a year and drawing out $288,060 a year, you’ll need assets in the amount of $3,848,183 in Year 40. That means between now and year 40, you’ll need to save and appreciate nearly four million dollars in order to retire on $5,000 a month (2007 dollars) for the next 25 years. (if that seems a little high, it’s because you have to discount your rate of return by inflation each year) Scary huh?

So, how much do you need to save? Let’s hit up assumption 4…

Assumption #4: Your pre-retirement investments will appreciate at 10%.

Now, in order to have $3,848,183 in retirement assets in 40 years, how much will you need to save each month if your savings appreciate at 10% each year? (This time we don’t discount for inflation because it’s already taken into account by the payout each month) It’s actually quite reasonable, a mere $8,694.54 a year… or $724.55 a month.

(Someone please check my math!)

There’s an article over at Yahoo Finance, in their retirement section (if you aren’t looking at it today, June 27th, you probably won’t see it on the front page anymore), titled “The High-Stakes Battle Over Automatic 401(k) Picks.” The little blurb underneath reads:

Legislation stalled over what investments should be included in automatic-enrollment plans is causing millions to lose out on retirement savings. What forces are driving the dispute?

If you read that strictly as its written, it sounds like Congress is causing innocent Americans to lose millions of dollars because of their deadlock on what should be the automatic pick in auto-enrollment 401ks. It says that because that’s eye-catching and it’ll lead to a click from the reader, but ultimately it’s not Congress’ fault, it’s the employee who is losing out on retirement savings’ fault. If everyone was clued in enough to enroll in their employer sponsored 401k plan, Congress wouldn’t have to waste time on the issue, there are plenty of other issues to waste time on.

You are responsible for everything that happens to you, including your retirement savings, whether you like it or not. The moment you think that you aren’t responsible for your own life you can just pack it up and call it a day.

Enroll in your 401k, put it in something intelligent (warning: you might have to read something), and ask your legislative representative to do something useful like clean up the environment.