Linkfests Are Fun!
Nickel is putting a lot into his retirement funds - a SEP IRA, 403b, and a 457b. Whew! And when you have four children, a potential 9% increase in milk prices can be quite disconcerting. MBH hits up the yard sales this week.
Despite the misleading title, FMF does highlight a very important Smart Money article on how some brokerage firm employees are dispensing financial advice - a strict no-no. To say that it’s bad advice wouldn’t be fair, it’s more accurate to say it’s not professional advice (in the strictest sense) and that it’s illegal advice. Well, I suppose it is bad advice. 
Putting your tax refund into a Roth may be sound financial practice but it’s certainly not fun, Flexo outlines fun ways to spend your tax refund. Now, it’s one thing to spend your tax refund, it’s another to spend a tax refund you aren’t getting. Counting your chickens before they’ve hatched is always a bad idea.
JLP highlights a typical arbitraging tactic - buying popular items cheap and selling them once they run out in the stores on a site like eBay. One year in college I saw that Ashton Kutcher wore a green John Deere mesh hat on Punk’d so I snatched up a ridiculous amount (over a hundred) from various John Deere distributors for about $5 a piece and sold them on ebay for $25-$30 depending on the sucker buyer. It was pretty sweet.
Lastly, Gen X Finance has been doing a series called 24 Signs That You Could be in Financial Trouble and one that I found very poignant was #11: Consolidating Debt While Still Using Available Credit. You can’t get yourself out of a hole if you keep digging it deeper… that just doesn’t make sense.
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1 Comments - Share Your Thoughts
Good comments but I want to raise a big issue, where many articles, posts and comments are assuming that stock and bond funds never lose value. Much discussion of “savings” and “extra savings” by putting money, and more money, into various stock funds, maybe some bond funds, etc. There have been years and even multi-year periods when such investments have LOST value. Even 1 year of loss then requires extra gains just to get to even. A multi-year period of falling asset prices (yes, stocks and even bonds can drop in price, just like houses, condos, and electronics) would hit literally millions of “savers,” “retirees” and “pre-retirees” incredibly hard. Please consider this in personal planning and in helping educate others about their planning too.
At a very minimum, each person should have 6 months of monthly expenses in secure bank savings. Then, approximately $10,000 per person in a very safe investment such as secure bank certificates of deposit or short-term (very short-term) Treasury bills. Only after that, should actual “investments” like those available through 401(k), IRA, Roth IRA, annuity, ever be considered.
People don’t like to admit that investment losses are actually rather common. The financial industry wants you not to be very aware of that, and to buy, buy, buy. Just make sure that you do NOT “buy high and sell low” - it’s the surefire way to lose more than you can imagine is possible. If you must buy an investment, okay, but don’t let it become a loser. Loser investments are far more toxic for your future (and present) than a “mere” 4% return on a guaranteed-principal CD.