Micawber’s Favorites – May 13, 2017

Here are several of my favorite recent personal finance articles:

What If Everything in Life Depreciated Like New Cars by Millennial Money Man

As I have written about in the past, cars do more than anything else to destroy the wealth of middle-class Americans. The reason is that they depreciate so quickly. Spending so much of our money on something that loses value is not a wise financial move. This article drives that point home in a memorable fashion by imagining what life would be like if everything depreciated like cars. Interesting idea.

The Three Category Budget by C. Osvaldo Gomez at Beating Broke

Shane teaches a financial literacy class to 8^th graders so we he wanted to keep the topic of budgeting simple. In his research he found this 3-category (you can add subcategories) budget that I really like. Since I believe simple personal finance solutions work best for everyone – not just 8^th graders – I wanted to share it with you.        

She Won the Lottery at 17. Now She Blames Euromillions Officials for ‘Ruining Her Life’ by Peter Holley at the Washington Post

I am intrigued by what happens to people who get a lot of money all at once, especially when it is unexpected and unearned. While we think this would be a good thing it literally chances everything in an instant, and usually ends up causing more problems than it solves. This is an interesting story of someone who won a lottery in Scotland at the age of 17 – apparently you only have to be 16 to buy tickets in Scotland. She is now considering suing to have the legal age for participation raised to 18.

Determine Your T-Rex Score at The Wealth Game

“T-REX” stands for Total Return Efficiency Index. This is a tool, not an article, but I absolutely love it. One of the things I write about a lot is how investment fees that seem small can take a huge chunk of your returns over time. John Bogle calls this “the tyranny of compounding costs.” This easy to use tool visually illustrates this for any investment amount, fee, and time period you enter. To quote Bogle again, “costs matter,” and this tool drives that point home in a memorable way.