Micawber’s Favorites – May 20, 2017

Here are links to several of my favorite recent personal finance articles:

Warren Buffett Says Investors Should Stick With Index Funds by Trevor Hunnicutt at Fox Business

I have long been a fan of index funds, not only for their simplicity but also for their long-term performance. As Nobel Prize winning economist Paul Samuelson states, when it comes to investing “The prudent way is also the easy way.” Investor extraordinaire Warren Buffett has come to the same conclusion and stated so forcefully in his annual letter to Berkshire Hathaway shareholders.

Buffett’s Bet With the Hedge Funds: Year Nine by David Floyd at Investopedia

In a related note, Buffett made a million dollar bet with a hedge fund manager that an S&P 500 index fund would beat an investment in hedge funds chosen by the hedge fund manager over a period of 10 years. Year nine results are now in and Buffett and the index fund have what appears to be an insurmountable lead. This article describes the bet and updates the results to include 2016.

My Visit With Warren Buffett by Ms. Liz at mislizmoneymatters

Sticking with the Buffett theme, Ms. Liz at Money Matters invested in Berkshire Hathaway (BRK), Buffett’s company, last year. Historically this has been a great investment but Ms. Liz says she invested in the company mostly so she could attend the annual shareholder’s meeting in Omaha, Nebraska. BRK’s annual meeting has become quite the spectacle and Ms. Liz does a great job of describing her experience in this interesting article.

The Dilbert Principles of Personal Finance – An Infographic! by Fritz Gilbert at The Retirement Manifesto

I am a huge fan of both the Dilbert comic strip and its creator, Scott Adams. In addition to Dilbert, Adams writes actual books, without comic strips. In one of them Adams gives some simple but powerful personal finance advice. He titled this “Everything You Need to Know About Personal Investing,” and it is only one page long.

I first heard about Adams’ investing advice when I was reading a book by Vanguard founder John Bogle. In his book Bogle recommended Adams’ advice. It struck me as funny that investment giant John Bogle would endorse advice given by a cartoonist, but a recommendation from Bogle is high praise in my eyes, so I checked out Adams book at the library.

Anyway, my friend Fritz, at the Retirement Manifesto, has done a great job of turning Scott Adams’ advice into an infographic. I printed this out and hung it on my wall to remind me how simple personal finance should be. I suggest everyone else do the same. Simply right-click on the graphic and choose “print picture.” Thanks for this Fritz.

In an unrelated note, I once wrote an article comparing Scott Adams to Nassim Taleb, author of the Black Swan. Each of them has a similar philosophy on what it takes to be successful. Adams found my blog post and wrote me an email saying he enjoyed it. This was definitely one of my prouder moments as a blogger, and since then I have been telling everyone that my blog is endorsed by Dilbert.

Here’s the Average Tax Refund People Get In Every US State by Kathleen Elkins at CNBC

I lot of you received tax refunds recently. Have you ever wondered how your refund compares to what others get? According to this article the national average is just over $3,000. My state, Utah, is well below this, with an average refund of $2,640. What is the average in your state?

If you get a big refund every year you should lower your withholdings and place your increased take-home pay in a savings account throughout the year. Financially speaking, it doesn’t make any sense at all for the average US household to be giving our government an interest-free loan of $3,000 dollars per year.

Leave a Reply