Micawber’s Favorites – December 9, 2017

Links to several of my favorite recent articles on money and life:   

Several people have asked me recently about investing in Bitcoin. I am probably not the right person to ask. I have at best a very basic understanding of how they work and, even before the recent price run-up I decided the risk was far too high for me. I have just been telling people that I wouldn’t recommend it, but that a lot of people have made a lot of money doing it. In fact, I read somewhere recently that Bitcoin had made about 10,000 people millionaires in the last few months. This is obviously a hot topic, and this week I ran across two great articles discussing it. Both of them offer far more expertise and far better advice than I can. Here are the links:

How Does Something Like Bitcoin Happen? by Ben Carlson at Wealth of Common Sense

“Anyone who tells you they know where this thing is heading, how to value it, where it ends, etc. is nuts. No one has a clue.”

How to Invest in Bitcoin Like Benjamin Graham by Lucas for jlcollinsnh

“This is the riskiest investment you will ever make. There are no rules. There are no regulations, There is no FDIC. There are no do-overs. There are no courts. There are no laws. Market manipulation is rampant. Malware on your computer steals your coins. Scams con thousands of people daily.” In spite of all that Lucas recently made his first Bitcoin purchase. In this article he explains both the risks and the potential rewards, and tells you how to invest if you decide it is right for you.

The Fiduciary Rule Was Supposed to Be Great For Investors – Oops by Megan Leonhardt at Money Magazine

Here is another timely article about a topic that is affecting a lot of people currently. The fiduciary rule – a rule requiring financial advisors to put the interests of their clients first – recently went into effect. This is probably a good thing long-term, but as with all government actions there are unintended consequences, winners and losers, and mistakes in its implementation. In the short-term it means increased fees for some investors unless they take action to move their money to a different type of account. This article does a great job of explaining what your options are.  (Note: The title I used is from the magazine.  I thought it reflected the article content better than the online title). 

9 Amazing Books to Teach Your Kids About Money by Chelsea at Mama Fish Saves

I made my share of mistakes as a parent but one of my successes was reading a lot to my children. I whole-heartedly agree with this quote by David Owen’s from his fantastic book The First National Bank of Dad:

“Thoughtful parents often fret about how best to invest for their children’s futures. Zero-coupon treasuries maturing the year they leave for college? Roth IRAs filled with tech stocks and junk bonds? Gold ingots stored in abandoned fallout shelters? Real estate investment trusts?

Here’s my best advice: Read to them even more than you already do.”

I also believe it is vital for parents to teach kids about money. That is why I was so excited to see this list from Chelsea at Mama Fish Saves on amazing books that teach kids about money. Now you can invest in your children’s future by reading to them while teaching them about money at the same time. What could be better than that? I will definitely be checking some of these books out from the library to read to my grandson, Ashton.

A Teachable Moment by Tony Isola

Staying on the topic of teaching kids about money, I really loved this article about how to lead a money discussion with children. Tony goes in to schools to teach kids about money and towards the end of the article he states, “Imagine if public school teachers facilitated discussions like this on a daily basis in classrooms around the country.”

My reaction was “Imagine if parents facilitated discussions like this on a daily basis in homes across the country?” I agree it would be great if schools did a better job of teaching kids about money, but parents are the most important teachers their children will ever have. You have the primary responsibility to teach your children about money and you have the power to do it right now. You can’t afford to wait for the schools.

A Budget Primer for the Weary by Washington Post Columnist Robert J. Samuelson

While I usually focus on personal budgets, this article is about the national budget. With congress trying to pass a budget, or at least a continuing resolution, to avoid a government shutdown, this short and non-technical article looks at some of the challenges they face. I really like this quote: “If people want big government, they should pay for it. If they dislike higher taxes, they should cut government.” Of course, the problem is that the country is divided and can’t come to a consensus on what they want. The result has generally been big government, insufficient tax revenue, and large deficits. That can’t continue forever.

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