Micawber’s Favorites – January 2017

A roundup of my favorite financial articles from January 2017:

“Salt Lake City’s 100 Women Who Care” by Hal Boyd at The Deseret News

I don’t have a ton of extra money in my giving budget right now but I am always looking for ways to make the giving I can do more effective.  Therefore, I was intrigued by this article I found in The Deseret News, one of Salt Lake’s daily papers.  It is about a group of Salt Lake Women who have come together to make their giving dollars more powerful.  I absolutely love this model for giving. 

Here is how it works.  Each of the women pledges to give $100 each quarter, so the group has $10,000 to give every three months.  The women then meet each quarter and have several pre-selected community groups in need of funds come and give presentations on how they would use the money.  A vote is taken and the winning organization gets the $10,000.  At the next meeting the winner from the previous meeting returns to report on how the money was spent and a new organization is selected to receive the next round of donations.

When I read this I thought that it sounded like an incredibly interesting, effective, and, quite frankly, fun way to give.  For an amount of money that is not beyond the reach of most of us you can join with others to magnify the good you can do.  You can become a philanthropist on a small budget.  I mentioned it to my wife, who does an incredible amount of giving, but I was somewhat jealous that I couldn’t join myself. 

Then I started doing some research.  The group falls under the “100 Who Care Alliance” and there are groups for women, men, people, and kids.  The group for women is the only one currently operating in Salt Lake but I am seriously considering starting a new group just so I can join.

“48 Tax Deductions You are Forgetting” by Chris Peach at the Money Peach

I hate to be the bearer of bad news but it is time to start thinking about taxes again.  The good news is that when you do your taxes, knowledge is money.  Whether you do your own taxes or have a professional do them for you, knowing what deductions you might be eligible for is vital.  This is a great list of some of the more common, and some not so common, deductions.  Reading it could very well pay off in the form of a bigger tax refund.  

“How Should You Manage Your Money?  And Keep it Short” by Ron Lieber at the New York Times

Many financial professionals make personal finance seem more difficult than it is as a way to magnify their importance and gain your business.  The reason I started my blog is to show that this is not true.  There is almost always a simple solution, and the simple solution is often far better and almost always cheaper than more complicated options.  There is currently a movement to condense the most important personal finance knowledge down so it fits on an index card.  This article talks about some of the more famous index cards and contains a slide show picturing a collection of them.

“Ten Ways You’re Making Your Life Harder Than It Has to Be” by Tim Hoch at Thought Catalog

Most of these aren’t about money, but there is some great advice here for everybody.  Number one would help a lot in healing the divide in our country.

“My Total Lifetime Earnings and The New Wealth Ratio” by J. Money at Budgets are Sexy

Every year the government prepares a Social Security Statement for you.  This used to be mailed every year but now it is only available online.  However, if you have not created an online account the government will still send a hard copy to you every 5th year around birthdays ending with a zero or a five.  I recommend everyone set up an online account at My Social Security so you can have access to this valuable information every year. 

These statements summarize what your expected Social Security benefits will be under a variety of scenarios.  In addition, they contain a summary of your lifetime earnings.  For every year of your life in which you made money subject to Social Security withholding you can see how much you made. 

This is useful information to have on its own but J. Money devised a way to make it even more useful by using it to compare your total lifetime earnings to your net worth.  The result is a score that tells you how effective you are at turning income into wealth.  This is an interesting idea and it doesn’t take long to calculate if you already know your net worth.  Now you have another reason to review your Social Security Statement each year.               

“My Money is Worth More Than Your Money” by Physician on Fire

This article is an entertaining reminder that not all of your money is worth as much as you think it is.  This is due to the future tax consequences you will face when it comes time to withdraw it and spend it.

“The World’s Worst Market Timer” by Ben Carlson at Wealth of Common Sense

Trying to time the market is a fool’s errand.  Much more important are how much you invest and patience once you enter the market.  As the old cliché goes, “Time in the market is more important than timing the market.”  This advice, which no less an authority on investing than Charles Schwab has called as “close to a rock solid principle” as he has found, is illustrated in an entertaining and memorable way in this article. 

“Risk vs Return – The Dirty Secret” by David Merkel at The Aleph Blog

Conventional investing wisdom is that greater risk leads to greater expected returns.  This is mostly true, but only to a point.  The best returns often come from moderate levels of risk with rewards decreasing as risk increases beyond this point.  This concept is illustrated from this great graph which I pulled from the article.

Risk vs Return

“The Online Shopping Hack You Must Try” by Jim Wang at Wallet Hacks

If you are buying something on line a little patience can help you get a better price.  Simply place the item in your shopping cart, log off without buying it, and watch for a better offer.  It is all explained in the article. 

“The Single Biggest Retirement Mistake” by Jeff Warnkin

This is an interesting, and rather conservative, variation on the “bucket” strategy for spending money during retirement.          

2 comments for “Micawber’s Favorites – January 2017

  1. Physician on FIRE
    February 4, 2017 at 4:56 pm

    Thank you, Brent, for including my work alongside all these great authors & posts!

    Cheers!
    -PoF

    • Brent Esplin
      February 4, 2017 at 5:13 pm

      Thanks for writing it. I really enjoyed your article.

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