May 3 2007 Edition of the Carnival of Financial Planning

Carnival of Financial Planning - May 3, 2007 Edition

Welcome to the May 3, 2007 edition of the Carnival of Financial Planning.

The Carnival of Financial Planning takes a long-term view of personal financial planning for individuals and families. We focus on efficient and sustainable personal financial planning practices that can lead to lifetime financial security. This edition is arranged by subject heading, so that you can browse efficiently.

The Skilled Investor has made parenthetical comments beneath some listings. These comments are the opinion of The Skilled Investor and not of the blogger.

Blogroll Picks**
To increase the breadth of article links in each Carnival of Financial Planning, The Skilled Investor, proactively searches blogs to find articles that could be of interest to those interested in long-term financial planning. Each week, The Skilled Investor searches our blogroll in alphabetical order until we find at a half-dozen interesting posts. Next week, we will start again where we left off in the alphabetical rotation. Blogroll Picks are marked below by a double asterisk.

Enjoy!

Budgeting

**Beachgirl has presented a series of four articles thusfar on Living on $46K or Less (Part 4) posted at Beachgirl’s Budget Blog
(These articles summarize the budgetary constraints of different couples with annual incomes close to $46k. The bad news is that things are not easy. Debt and job loss have hurt some of these couples badly. The good news is that these couples at least have a budget and are trying to get / keep expenses and debts under control. Housing, healthcare, and debts can be substantial expenses for these couples, but some are still able to save. It is important to note that there is a big difference between consumption debt acquired because of excessive past consumption and investment debt acquired to control a valuable asset (e.g. mortgages for housing) or to improve earnings potential (e.g. student loans). Investment debt is a form of savings. Consumption debts just indicate that past living expenses exceeded past income. Also, note that borrowing to invest in the stock market is not “rational investment debt”, because margin interest rates significantly exceed historical market risk premiums that the equity markets have paid on average.)

College Savings

Kristine McKinley presents Juggling Retirement and College Savings posted at Paying for College.

Financial Planning

**JLP presented The Number of Millionaire Households is at a Record. Should This Surprise Anyone? posted at AllFinancialMatters
(With a bit of exponential math, JLP demonstrates that being a millionaire ain’t what it used to be. Simple inflation anoints many more middle-class millionaires every year. Many of these people don’t really feel like the millionaires whom they heard about when they were much younger. Inflationary dollars are illusionary dollars. Again, constant purchasing power dollars are the only way to plan.)

Michelle presents Financial Freedom’s Biggest Obstacle posted at Aridni, saying, “Thank you for hosting this carnival!”
(This article addresses the stress and effort of financial planning. The Skilled Investor also believes that personal financial planning efficiency need to be taken into account when choosing long-term financial strategies. See these articles on Personal Efficiency)

Investing

**John C. Bogle presented John Bogle responds to “Ask Jack” questions posted at The Bogle eBlog
(John Bogle thoughtfully answers a series of letters covering topics on ETFs, index mutual funds, his books, passive investing, active investing, Vanguard, TIAA-CREF, and Dimensional Fund Advisors.)

Bill presents Taking Away The PunchBowl–Why The Stock Market Could Go Down “Big Time” posted at Ask Uncle Bill.

Matthew Paulson presents Certificate of Deposit Ladders Explained posted at Getting Green.

Tushar Mathur presents US Treasury Savings Bonds posted at Life of a Resident Alien….

FIRE Getters presents Firstrade Launches Complex Options Trading Platform posted at FIRE Finance.

Tyler McKinna presents Start Buying Dividend Stocks Now! posted at Dividend Money, saying, “It’s time to start investing seriously in dividend paying stocks…here’s why!”

**BostonGal presented Do Your Homework (or Buy an Index Fund) posted at Boston Gal’s Open Wallet
(We included this article, because it makes the point that index funds are superior to actively managed mutual funds and a lot less work to own. BostonGal refers to a scientific finance study that showed that mutual fund flows adversely affect actively managed fund performance. In reality, there is no reliable way to identify superior actively managed investment funds beforehand, so doing homework about actively funds is a waste of your time. Passive strategies index strategies are superior, because they are cheaper and narrow the risk or range of performance outcomes. (See these articles: Pay less to get more (Parts 1 and 2) by The Skilled Investor. Also, see the Standard & Poors Versus Active (SPIVA) quarterly reports.

Mortgages

Colin Robertson presents How Do Foreclosures Affect Your Neighborhood? posted at Mortgage Tips and Credit Help.

Real Estate

Steve Leung presents Games Real Estate Agents Play With Home Buyers posted at 1SiliconValley.com, saying, “Educated consumers can look out for many of the common games real estate agents play with home buyers and ask pertinent questions when interviewing agents and keep from being “played.”"

Retirement Planning

**William Perez presented Saving for Retirement posted at About: Tax Planning: U.S.
(This article discusses retirement savings alternatives and provides further links to William’s more specific articles on IRAs and 401(k)s.)

Silicon Valley Blogger presents So Why Are’t You Opening A 401K? posted at The Digerati Life.

**Jim presented Sell Your 401(k) Company Stock Right Now! posted at Blueprint for Financial Prosperity
(This article tells you to dump your company stock in retirement plans right now. It talks about how the Pension Reform Act of 2006 enables employees of public companies to sell company matching stock. As The Skilled Investor has stated strongly before, this advice is great. Diversify. Never own concentrated positions in tradable financial assets that exceed a very few percent of your assets. Never keep any significant portion of your retirement assets in the same firm that issues your paycheck. Investing for retirement is about optimizing your long-term “risk-adjusted” portfolio returns. You cannot do this when your portfolio assets and paycheck are in the same breakable basket. [For more, see these Diversification Articles by The Skilled Investor.] )

ISPF presents 5 Financial Lessons I Wish My Dad Had Learnt posted at Grad Money Matters.

Steve Faber presents - Retirement Planning – Another Reason to Find Your Net Worth posted at DebtBlog.

Risk Management

Sam presents Life Insurance. Clear, Quick and Easy Info. $$$$$ posted at Surfer Sam and Friends.

Abdulla Yasir presents Is the US dollar still relevent? posted at Abdulla Yasir’s Blog.

Savings

Joseph presents 8 questions that will prevent impulse spending posted at penny pinching.

That concludes this edition. Submit your blog article to the next edition of the Carnival of Financial Planning using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

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