Disqus - Latest Comments for Mr. ToughMoneyLove

Re: Employee Stock Purchase Plan Dilemma

Mr. ToughMoneyLove — Thu, 27 Aug 2009 13:54:44 -0000

You can't expect an informed answer to this question without identifying the company. For some companies, I might advise you to sell and stop buying entirely.

Re: HUD Wants to Let First Time Home Buyers Use $8,000 Credit for Downpayment

Mr. ToughMoneyLove — Wed, 20 May 2009 13:59:38 -0000

This proposal from HUD just proves that our government has an endless supply of idiotic ideas. This is precisely the thinking that inflated the real estate bubble to begin with: I want it and I want it now and no silly thing such as SAVING for a down payment is going to get in my way. There must be an entire committee of government bureaucrats who are tasked with doing nothing except thinking up new ways to throw taxpayer money down the rat hole. This week, the committee is working at HUD.

And what happens when we learn that thousands of home buyers are "borrowing" a tax credit that they aren't actually entitled to? More fraud opportunities, with more government employees needed to investigate fraud. It never ends does it?

Re: Ask Any Question and Ramit and I Will Discuss the Answers

Mr. ToughMoneyLove — Fri, 13 Mar 2009 17:17:47 -0000

You use the term "rich", a word that carries many different connotations. How does one know when he or she is "rich"? Can it be measured objectively? If so, how? Or, if it is a subjective state of mind, how would you describe it?

Thanks.

Re: Is “Buy and Hold” Still a Good Investing Strategy?

Mr. ToughMoneyLove — Mon, 23 Feb 2009 23:48:36 -0000

Many of the comments are quick to dismiss the idea that "buy and hold" is no longer a good strategy. For a lot of folks who have been "holding" the evidence is in. If you entered the market in the mid to late '90's, buy and hold has been a terrible strategy for you. For you younger folks who assume that all of this will correct itself in the next 10-20 years, I think you are overlooking the confidence factor. Confident investors are who drive the markets up. Who are those confident investors now? I submit to you that for many investors (including this one), the damage done to our confidence is substantial and long-lasting. I will never again invest with the aggressiveness that I did for the last 20 years. There are millions like me. For that reason, I think it is a 50-50 proposition that we are in for a 7-10 year stagnant market. It will take that long for memories of 2008-2009 to fade.

Re: 2009 Stimulus Bill: Day One

Mr. ToughMoneyLove — Tue, 17 Feb 2009 12:20:54 -0000

Send a politician millions and tell him/her to hurry up and spend it? Don't get trampled by the lobbyists.

Re: Is Your Home an Asset or Liability?

Mr. ToughMoneyLove — Mon, 16 Feb 2009 15:23:31 -0000

Someone needs to stick a big sock in Kiyosocki. His only apparent talent is selling books and seminar tickets. He is very good at that indeed.

Re: Generation X Will Depend on Family and Government for Long-Term Care

Mr. ToughMoneyLove — Fri, 13 Feb 2009 18:34:43 -0000

I bought a LTC policy for my wife and for me last month. It includes compound inflation protection. If you don't get inflation protection, don't waste your money.

If you are counting on the government to take care of you, be prepared to have most of your assets drained away first.

If your state has a LTC partnership agreement, you can keep more of your assets before going on Medicaid, up to the amount of LTC benefits received. That helps. However, your LTC policy must have compound inflation protection to qualify.

Re: Is it Effective to Limit CEO Compensation?

Mr. ToughMoneyLove — Wed, 04 Feb 2009 12:27:25 -0000

My belief is that if a CEO needs to be told or forced to do what is right, he shouldn't be there at all. Substituting Obama's judgment doesn't suddenly elevate the status or wisdom of a CEO with bad judgment.

Re: Senate Amendment to 2009 Stimulus Bill: First-Time Home Buyer Credit

Mr. ToughMoneyLove — Mon, 02 Feb 2009 20:14:28 -0000

If they waive the repayment requirement (for sure), extend it to all home purchases (possible) and eliminate the income ceiling (unlikely), I will be buying a another home using this credit.

The more likely scenario is that my tax dollars will be used to fund this credit for others.

Re: Traditional and Roth IRA Contribution Limits for 2009

Mr. ToughMoneyLove — Thu, 01 Jan 2009 16:49:40 -0000

"If your MAGI is above $120,000 (single) or $176,000 (married filing jointly), you do not qualify for IRA contributions. "

This statement is not 100% correct. If you exceed the income limits you may still contribute to an IRA. The difference is that your contributions will be after tax contributions. However, you may want to make this contribution anyway because even if you are ineligible for a Roth IRA now (due to income limitations), that restriction disappears in 2010. Thus, if you have a conventional IRA now (even if funded with taxed contributions), you can convert that to a Roth IRA in 2010, making all of your withdrawals non-taxable. That is what I am doing.

Re: The Federal Reserve Cut is Irrelevant

Mr. ToughMoneyLove — Tue, 16 Dec 2008 13:52:29 -0000

The government "printing money" can mean a lot of different things but at the end of the day, it is actions that are taken by the Fed and government to increase the supply of money available for spending by either the public or the government. What is happening now that perhaps is the most direct form of "printing money" is that the Fed is monetizing government debt. Instead of Treasuries or other debt obligations being sold by the government to banks or the open market, the Fed is purchasing them. This leaves existing money in the open market plus provides additional money to the government to spend on its own projects. Voila - the money supply is increased and inflationary pressures develop. In my opinion, that is the kind of "printing money" that is the most damaging.

Re: I am Debt Free as of Today!

Mr. ToughMoneyLove — Mon, 15 Dec 2008 10:59:39 -0000

Congratulations Flexo. And absolutely that financial aid advisor was looking after his interest and those of the school, not you. There were probably financial incentives from the lender involved. The college student loan business is a racket through and through.

Re: Coworkers Excited About Investing

Mr. ToughMoneyLove — Thu, 11 Dec 2008 10:50:58 -0000

Unless the stock is heavily discounted or there is a significant match, investing in your employer's stock increases your financial risk as compared to alternatives. If the company does poorly, the stock could tank and you could lose your job. If the employer's stock is not publicly traded, the risk is even greater because management definitely will not be looking out for the interests of minority shareholders.

Re: 45% Less Credit in Americans’ Wallets

Mr. ToughMoneyLove — Tue, 02 Dec 2008 11:53:35 -0000

"The Death of Credit Cards" Gosh, wouldn't I love to see that epitath written in stone.

Re: The Mythical Demise of Social Security

Mr. ToughMoneyLove — Wed, 03 Dec 2008 18:06:06 -0000

Bill - Thanks for giving us credit for the dotcom era! And you are correct. Baby boomers are going to defend their well established economic turf. We do that by voting.

You are obviously a bright guy with strong opinions. I like that. It doesn't appear that you are going to move off your position about baby boomers and that's OK. So I think I will close my part of our dialog by sincerely inviting you to visit my blog now and then to share some more of your views there as well as here. Not only will I benefit but so will my other readers.

Thanks again.

Re: The Mythical Demise of Social Security

Mr. ToughMoneyLove — Wed, 03 Dec 2008 15:39:46 -0000

Bill: You are entering the realm of the irrational. I don't know and don't care what marginal rate Buffet pays but I pay the top rate and so do many others. When I entered the workforce in 1973, the 50% marginal rate started at $32k and went up to 70% from there. My marginal rate right out of college was 29%. So, before you start complaining about SS payroll taxes, start paying income taxes at 1973 rates. Reagan and then Clinton lowered them. Last I checked Clinton was a baby boomer and also lowered deficits.

BTW - I'm trying to remember which generation brought us the dotcom bubble. Do you recall?

Start blaming politicians, not generations. There is plenty of blame to go around.

Re: The Mythical Demise of Social Security

Mr. ToughMoneyLove — Wed, 03 Dec 2008 15:02:26 -0000

castocreacions - Agreed but my last comment was directed at those who seem to suggest that baby boomers have skated through the last 35-40 years without paying into SS to support those ahead of us.

Re: The Mythical Demise of Social Security

Mr. ToughMoneyLove — Wed, 03 Dec 2008 14:42:24 -0000

Ian - It seems that you and others have missed the essential point of the article, which is probably my fault as the author. The point is that Social Security is here and because of forces like the AARP, it is not going away. That is reality. Therefore, you should take it into account in your financial planning. Its existence offers both positives and negatives in that area.

You and others have referred to SS as a "redistribution of wealth" program. I don't agree with that assessment but even assuming its true, boomers have been redistributing their wealth to the "greatest generation" for many years now. It's not as if we have been immune to all of the problems you are concerned about.

Re: The Mythical Demise of Social Security

Mr. ToughMoneyLove — Wed, 03 Dec 2008 10:48:44 -0000

Bill: It seems you are all about generational warfare. Unfortunately for you, the war started a long time ago. According to your analysis (interesting but flawed) you've already lost. You can't rewrite history. (If you do, maybe you can go after the 50% and 70% marginal income tax rates from the 70's and 80's which your analysis conveniently overlooks.) So time for a Plan B. What is yours?

Re: The Mythical Demise of Social Security

Mr. ToughMoneyLove — Tue, 02 Dec 2008 14:07:17 -0000

Bill No I am not glad for tax shelters but a 401(k) is not a shelter but as you point out, a tax deferral. And yes I am glad for that because even though many marginal rates are going up, I will be paying taxes at a lower rate in retirement than I did during my peak earning years.

Tax advantaged plans do make it easier to save for retirement. A 401(k) plan essentially converts an income tax to a consumption tax. You do not pay anything on the income that goes in and then you pay tax only on what you take out, when you take it out, presumably to spend/consume. I am a proponent of consumption taxation as opposed to income taxation. What about you? Don't you think that debt driven consumer spending and saving habits would improve if we were taxed on what we spend instead of what we earn? Doesn't a 401(k) encourage that?

Re: The Mythical Demise of Social Security

Mr. ToughMoneyLove — Tue, 02 Dec 2008 11:20:28 -0000

Bill - Not a cop out at all. I am speaking for all boomers, not me. I started investing in the market in 1973, added some real estate, etc. but for many middle class boomers with little extra money to invest and kids to put through college, etc., pensions were the only realistic option other than reliance on SS. It is so much easier to invest for retirement now with various tax advantaged plans available.

Re: The Mythical Demise of Social Security

Mr. ToughMoneyLove — Tue, 02 Dec 2008 10:38:31 -0000

Bill - Your analysis is very good and I think a new plan needs to be started for our youngest adults. No I do not want them to transfer their wealth to me. I would be content to increase the Social Security earnings cap to fix the system.

For the boomers, keep in mind that a lot of us never had pension options where we worked and many of those that did (e.g., auto companies) are in terrible shape because of it. 401(k) plans were not even in the law until 1980. Contribution limits have also historically been low. This has handicapped a lot of us from doing everything that we can for ourselves.

BTW - 4.5% return over a 35 year retirement is problematic when you factor in inflation.

Re: The Mythical Demise of Social Security

Mr. ToughMoneyLove — Tue, 02 Dec 2008 07:35:58 -0000

Sarah - Thank you. I was feeling badly outnumbered! I must say that thanks to the huge hit my 401(k) has taken, I've feeling a much stronger affiliation to the middle class.

Re: The Mythical Demise of Social Security

Mr. ToughMoneyLove — Mon, 01 Dec 2008 17:59:33 -0000

@ Bill You are right in many ways. My original post was not really intended to be a defense of SS, only a matter of fact assessment that it is not going away.

I did my part - had three kids, two working and one still studying. I'm a small government guy but where is the plan to replace SS? There are workable plans to fix it but haven't seen a replacement yet, except privatizing it. AARP says "no" which in today's political environment usually means "no." Maybe we can all get in the government Thrift Savings Plan? Or how about letting us withdraw our 401(k) funds (now depleted 40%) tax free?

Re: The Mythical Demise of Social Security

Mr. ToughMoneyLove — Mon, 01 Dec 2008 14:04:06 -0000

@ castocreations I understand your frustration. I just think it is more productive to refer to SS as an actuarial nightmare rather than a Ponzi scheme.

Just remember that none of us who are contributing in my generation are at the "top" of anything when it comes to SS. We are not on the sidelines pulling strings and taking out money. Also remember that we were at the "bottom" once just like you. Only by aging and paying in over many years, not by siphoning money, have we moved closer to collecting anything.

I have enjoyed exchanging views with you.

Re: The Mythical Demise of Social Security

Mr. ToughMoneyLove — Mon, 01 Dec 2008 13:33:49 -0000

@castocreations FIrst, a true Ponzi scheme is an illegal pyramid plan set up by its creators to do nothing but attract investors into investing in little or nothing using promises of outlandish returns. SS is nothing like that and is certainly not illegal. SS does not require a pyramid structure to succeed. It helps but other actuarial adjustments can make it function. SS doesn't promise anything to retirees except a modest monthly payout based on earnings history. And, if you analyze the algorithm that SS uses to determine the retirement benefit, it strongly favors those with low incomes paying in. There is no meaningful return on investment for high earners who have paid in.

That is why calling SS a Ponzi scheme is over the top rhetoric,

Re: The Mythical Demise of Social Security

Mr. ToughMoneyLove — Mon, 01 Dec 2008 13:15:55 -0000

@ Matt I did not refer to any commenters here or to younger folks in general as whiners. I do concede a certain lack of respect for whiny Democrat leaders, e.g., Reid and Pelosi, who will oppose a plan based more on who proposes it and less on its merits. If Bush proposes something, they oppose it. Period.

I will also concede that many Democrats opposed privitization of SS for the same reasons as the AARP. Nevertheless, I submit to you that the plan was DOA because the AARP opposed it, threatening Dems and Republicans alike. Whether you like the AARP or not, don't you agree that it has that kind of clout?

Re: The Mythical Demise of Social Security

Mr. ToughMoneyLove — Mon, 01 Dec 2008 12:50:01 -0000

@ Matt - Except for the "Ponzi scheme" remarks, I think all of the comments here are great and I respect the commenters for making them, regardless of their ages. Please don't mistake vigorous and uninhibited debate for lack of respect. None of us has time for massaging egos online now do we? Serious blogs about serious money issues are not places to get your emotional needs met, don't you agree?

I would be happy to respond to any unanswered questions if I can. Remember, I claim only to have opinions, not all of the answers. There has been a lot of stuff flying back and forth - what questions remain open for me?

Re: The Mythical Demise of Social Security

Mr. ToughMoneyLove — Mon, 01 Dec 2008 12:03:25 -0000

@Bill Then I don't understand your point. The baby boomers have paid billions into a SS system that we did not create. After paying into the system over 40 years, you want us to say "never mind - bad idea" and vote it out? That would be fine with me if the government would just go ahead and send me a check in the total amount of all of my SS contributions plus a lousy 6% annual rate of return. Call it a do over.

Re: The Mythical Demise of Social Security

Mr. ToughMoneyLove — Mon, 01 Dec 2008 11:31:51 -0000

Dustin: Your comment proves how important and yet random market entry and exit points are. The last few months were indeed the most significant in the last 10 years but they are part of those 10 years aren't they? Imagine if you decided to retire in November 2007 (at the market peak) then saw your nest egg lose 40% over the next 12 months. Now run the numbers as to what it would take to recoup that 40% loss plus gain 10-12% annually ON TOP OF THAT if that is your projection. Not gonna happen unless we hit another dot.com bubble.

Re: The Mythical Demise of Social Security

Mr. ToughMoneyLove — Mon, 01 Dec 2008 11:03:24 -0000

@castocreations - I agree with your sentiments. But what do we do with the baby boomers who have poured the most money into the SS system over the years? Cut them off cold turkey? Can't do it or you will have millions of starving old people wandering around (those boomers who did not plan and those who did but lost 40% of their "planning" in 2008). The system needs fixing but it must survive in some fashion. I don't want my kids going broke paying ridiculous taxes although some might get used to it. In that regard, you might want to study the economic system in Denmark. I wrote about it a few weeks ago. Very interesting.

Re: The Mythical Demise of Social Security

Mr. ToughMoneyLove — Mon, 01 Dec 2008 10:45:22 -0000

@Bill: Actually, SS was created by the "Greatest Generation", i.e., the parents of the Baby Boomers. We (the baby boomers) are the generation that has poured billions after billions into the so-called SS Trust Fund during our working years to support the "Greatest Generation." Those billions were loaned to the Federal government to spend on other stuff that I and a lot of other baby boomers oppose. Now we are expecting to get at least some of our contributions in return when we age. Is that so unreasonable?

Re: The Mythical Demise of Social Security

Mr. ToughMoneyLove — Sun, 30 Nov 2008 20:08:53 -0000

@Kevin I agree that Medicare is a more significant problem and if you will read my post and comment #10 carefully, that's what I said. However, keep in mind that our newly elected President intends to completely overhaul our healthcare system, meaning that Medicare (or its replacement) will be expanded, not shrunk.

The employee to beneficiary ratio is not going to improve because the country will continue to age. (Unless the immigration floodgates are opened wide, which is a possibility.) However, there are a number of relatively easy actuarial fixes that can be implemented. I think you will see those coming soon. Also, I believe that future benefits will be "means tested" so that those with high incomes from retirement assets will either receive lower benefits or they will be highly taxed. This will call for some very careful tax planning and asset planning so that a retiree with a high net worth can still maximize benefits with minimal taxes. That's what I am doing and you will be doing the same thing at my age. And when you retire and collect benefits, those behind you will complain. You will join the AARP.

Note that I am not complaining about having paid many thousands of dollars more into SS than I will ever collect in return as compared to having invested that money over what will be at least 45 year work history. As you say, that is one of the flaws of the system but what can we do when so many elderly have nothing else?

Re: The Mythical Demise of Social Security

Mr. ToughMoneyLove — Sat, 29 Nov 2008 17:42:51 -0000

Such skepticism and hostility from you younger folks. I am not surprised. I would probably have had a similar reaction in my younger years. Let me see if I can set things right for you.

@Dustin My argument is that SS is here now, created in reaction to the Great Depression. In all of the proclamations I have read that "SS won't be around for me" and indeed in all of the comments here, I have not seen any argument, let alone a plausible argument, as to why Congress would shut it down now, after what has happened in 2008. Name one politician in office who is calling for the abolition of SS. I don't know of one. If there was, the AARP would be sure to go after him/her. Also, if you are counting on a 10-12% annual return on your investments going forward from today, I think you will be disappointed. Look what the returns have been over the past decade. Effectively zilch. If you assume that SS will be gone, you will probably take excessive risk to compensate. That may backfire on you.

@Matt Take a look at the AARP website to learn what it says and did about the privatization plan. Bush didn't even bring a bill to the floor because lots of Republicans were afraid to buck the AARP.

@Andrew You may or may not be succesful in saving for retirement completely independent of SS. Imagine if you were close to retirement or early in retirement and experienced what happened this year. I personally lost well into 6 figures in market value and I had a very conservative non-correlated asset allocation.

@Kyle The most recent data we have (over the last 10 years) is that an extended period of 10-12% annual returns is fantasy. Also, I agree that inflation is certainly in our future but most of the money for future entitlement programs will have to come from higher taxes. Medicare is a problem that is even worse than SS.

@vh - Amen

@ Nate I do care about the younger generations. I have three adult sons. I think that if you evaluate the ages of the Wall Street MBA geniuses who leveraged their employers and shareholders into oblivion, you will find a high percentage in your generation. Oh Oh.

@ Anca - You can come on my lawn as long as you keep paying your SS taxes and Medicare taxes.

@ castocreacion You don't seem to like older folks too much. I assume that if SS is eliminated as you prefer, you will take care of your elders who do not have the resources to take care of themselves. Or will you tell them to eat dog food?

@crapdetector I don't think you can annuitize $4600/month with $700k and have it inflation adjusted and have most of the annuity continue after the death of one of the annuitants. That's what SS provides with its annual COL adjustments and survivor benefit. Plus, why would I want to surrender $700k in principal to replace SS? So maybe you should do more fact checking of your own. I did not intend to be rude - only to provoke some thought on the part of the readers which seems to have occurred.

Anyway, I have enjoyed and appreciated your comments to my guest post.

Re: GM Wants You to Fear its Collapse

Mr. ToughMoneyLove — Mon, 17 Nov 2008 16:08:40 -0000

Flexo - The auto companies agreed to all kinds of awful union demands, thinking that the profits made on trucks and SUV's would pay for them. Now the truck/SUV party is over, so taxpayers are asked to step in. Of course GM and the UAW agree now because a bankruptcy would likely cause heads to roll at top GM management levels, with perhaps a Trustee calling the shots. They ought to resign now - it might cause some Republicans to change their mind on a bailout.

I voted for him but Bush has no idea what he is doing in matters of the economy and has completely abandoned any principles when it comes to spending taxpayer money. Now he is trying to salvage some sort of legacy by saying he saved the domestic auto business. I haven't purchased a domestic auto in years so I won't miss them a bit.

Re: GM Wants You to Fear its Collapse

Mr. ToughMoneyLove — Mon, 17 Nov 2008 15:35:28 -0000

Flexo - At its core, this would be a UAW bailout, not a car maker bailout. The unions are scared to death of a bankruptcy because they would be forced into major contract concessions. So, they want taxpayers to step in and save their precious (and excessive) union contracts. Did the PR release from GM say anything about the huge disparity in labor costs between GM and Toyota? As in $26/hour difference?

Re: News and Blogs: Thursday, November 13, 2008

Mr. ToughMoneyLove — Thu, 13 Nov 2008 11:41:38 -0000

Enjoyed the PC World article and thumbed it up. And was it written under a pseudodym or have you outed yourself?

Re: Take Control of Your Finances Part 1-A: Become Aware

Mr. ToughMoneyLove — Mon, 10 Nov 2008 10:16:02 -0000

Two traits that I am known for cynicism and skepticism. Although many people consider these to be negative characteristics, they sure do come in handy when confronting full-blown attacks by the marketing pros. If you constantly question the veracity and motivation of the people who are trying to sell you something, you will be a better consumer.

Re: President-Elect Obama’s Approach to the Economy

Mr. ToughMoneyLove — Wed, 05 Nov 2008 12:24:00 -0000

Unless Obama plans on vetoing any bills that don't conform to his ideas, the Democrat leadership of the House and Senate are going to set the tax and spend agenda, not Obama. The pent-up demand will be hard to control.

Re: Should the Bailout Money Be Used to Forgive Credit Card Debt?

Mr. ToughMoneyLove — Thu, 30 Oct 2008 12:14:15 -0000

The answer is no and it makes no difference that the credit card was used for "essential" expenses. If it is the latter case, there are most assuredly other non-essential expenses that were sucking cash away. Heck, if we are going to forgive credit card debt, let's just make filing bankruptcy as easy as getting a no-fault divorce. Sign a paper that says through no fault of your own you're broke and file it. Debt is gone.

Re: Ben Bernanke Agrees With Congress: Second Economic Stimulus Package Would Help

Mr. ToughMoneyLove — Mon, 20 Oct 2008 15:07:01 -0000

Absolutely the wrong plan. First, can someone explain to me what sustained benefit the economy received from the first stimulus package? Second, US consumers already know how to spend to excess. Giving them another stimulus is like giving a drink to a drunk. Third, what will they spend it on? More stuff they don't need. The plan will boost the stock of retailers in the short term, then right back to where we are now.

Re: Smithee Update: October 2008

Mr. ToughMoneyLove — Wed, 15 Oct 2008 11:11:55 -0000

Yep - you've been naughty and it sounds like your fixin' to be naughty again soon. You are definitely in full consumer mode. Nancy Pelosi wants to send you more stimulus money so that you can be even more patriotic by buying more stuff.

Re: Pay to Be a Financial Expert on Television

Mr. ToughMoneyLove — Mon, 13 Oct 2008 10:12:27 -0000

Flexo - They do this with lawyers as well.

The broadcast media have two problems with personal finance "experts." They let the locals pay their way on the air and they spend too much airtime featuring the Dave Ramsey and Suze Orman types, who haven't said anything new in ten years.

Re: My Recent Experiences With Buying the Market on Dips

Mr. ToughMoneyLove — Wed, 08 Oct 2008 10:35:57 -0000

Flexo - Thanks for being straight up with your failures as well as successes. It's a lot harder to do what you are doing with mutual funds - how about some ETF trading?

Re: Changing Your 401(k) in a Treacherous Market

Mr. ToughMoneyLove — Tue, 07 Oct 2008 10:49:31 -0000

I agree with staying invested but I think you are leaving some money on the table by not having some non-equity allocations. I would particularly look at some inflation protected securities.

Re: House Rejects Bailout Bill

Mr. ToughMoneyLove — Mon, 29 Sep 2008 17:04:06 -0000

This is so unrelated to the Patriot Act. How this is going to play out is that if nothing is passed by Congress soon, you will begin to see more business failures and layoffs for Christmas, followed by an extended recession or worse. The car companies will be among the first to shut down and perhaps fail. The folks that are now calling their Congress people demanding "no" votes will be among those without jobs or ways to pay off their credit cards. Then who will they call?

Re: Mark Cuban to Government: Show Us How the $700 Billion Will Be Spent

Mr. ToughMoneyLove — Tue, 23 Sep 2008 11:08:00 -0000

I am not a big fan of Mark Cuban and his antics but in this case he is spot on. Transparency is key, particularly now that we have the FAS 150 "mark to market" rule.

Re: Citi Raised My Credit Limit

Mr. ToughMoneyLove — Mon, 22 Sep 2008 17:50:15 -0000

"More money is available to use in case of emergency." Don't you mean more "credit" is available for use in case of emergency?

I know what you meant Flexo and I am not being critical of the points you are making. The point of my hypertechnicality is how easy it is for some folks (not you) to interchange "money" and "credit" in their conceptual thinking? I can't even count how many times I have read about someone taking out a home equity loan to "get money to pay off debt."

Re: Who Said Accounting Isn’t Poetic?

Mr. ToughMoneyLove — Mon, 15 Sep 2008 13:47:08 -0000

To give this poem more context, Robert Frost didn't have a Visa card, car payment, or HELOC.

Re: Comparing McCain and Obama’s Tax Plans

Mr. ToughMoneyLove — Mon, 08 Sep 2008 11:15:38 -0000

The guy you need to reading about is Charlie Rangel, not Obama or McCain because they do not introduce legislation. They can only veto it. Rangel, Chair of the House Ways and Means Committee (where tax bills start) has promised to introduce the "Mother of All Tax Bills" if a Dem is elected President OR if the Dems get a veto-proof majority in Congress. Be afraid - be very afraid - if you are upper middle class or above.

Re: How to Deal With Unpredictable Income

Mr. ToughMoneyLove — Thu, 04 Sep 2008 11:14:44 -0000

Another problem with fluctuating income is insuring against its loss, e.g., disability insurance or business interruption insurance. If a claim is made, teh carrier will tend to skeptical as to the level of income being claimed as a loss.

Re: under pressure

Mr. ToughMoneyLove — Mon, 08 Sep 2008 10:54:44 -0000

You will decompress much faster if you do more fishing and spend less time on the Internet so just shut down that WiFi connection.

Re: have MBAs been devalued by the crisis?

Mr. ToughMoneyLove — Wed, 01 Oct 2008 09:00:33 -0000

I agree. MBA programs have sprouted like weeds in colleges around the country and on the Internet. They are first and foremost cash cows for their sponsors. The education provided has been watered down with concentrations like "leadership." Save your money and start a business.

Re: how to enjoy life, or not

Mr. ToughMoneyLove — Mon, 13 Oct 2008 09:05:29 -0000

Excellent thoughts but I have to disagree somewhat with the concluding paragraph. Part of loving someone is focusing on their happiness and giving of yourself to that end. In turn, happiness and contentment are brought back to you. You are influencing those you love in that way, if you are loved in return.

Re: losing it

Mr. ToughMoneyLove — Wed, 15 Oct 2008 11:06:21 -0000

I'm sure you know that some thumb drives (SanDisk being one) include software on the drive that will encrypt and password protect the entire drive - no need to password protect or encrypt individual files.

Re: the math hurts

Mr. ToughMoneyLove — Mon, 27 Oct 2008 11:52:44 -0000

If you are down 65% you need to revisit your asset allocation. As for the 10% rule of thumb for long term geometric mean returns, that went out the window before the current crisis.

Re: what’s the dealio with retirement accounts?

Mr. ToughMoneyLove — Tue, 28 Oct 2008 10:57:23 -0000

The deal with all of your investments is having a plan with proper asset allocation. Just sitting on the sidelines with cash without a plan for that cash is not smart. For example, if you are bullish on real estate, put it into a REIT fund. If you need a cash allocation, ladder some CD's or buy TIPS, etc.

If you can buy into a ROTH IRA, I would do it. Tax rates are heading way up so pay your taxes now.

Re: what desperation looks like

Mr. ToughMoneyLove — Wed, 12 Nov 2008 10:42:39 -0000

This sounds like a good opportunity for you to add another income stream by offering financial counseling to your desperate co-workers. It must be a very surreal environment to be in right now.

Re: thankful not to be

Mr. ToughMoneyLove — Thu, 27 Nov 2008 23:32:47 -0000

Congrats on recalibrating your career. Makes me think of the Gavreau quote I used on my 11/25 post. Thanks for the mention and link as well. Happy Thanksgiving and good luck with the laptop.

Re: why you’ll be richer without kids

Mr. ToughMoneyLove — Tue, 02 Dec 2008 11:50:38 -0000

It's too late for me. We put three kids through private school. Not sure why you are opposed (except for maybe the cost) but there are benefits if you can afford it. (My adult sons thank us regularly.)

And yes, I feel "richer" for having kids. But they are not for everyone, as we read daily in the news.

Re: rebuilding the idea of elitism in America

Mr. ToughMoneyLove — Thu, 04 Dec 2008 12:39:20 -0000

I like the concept. Can we start with making sure those who vote have some minimal level of knowledge of American institutions and language?

Re: what motivates you more: frugality or decluttering?

Mr. ToughMoneyLove — Tue, 09 Dec 2008 15:38:47 -0000

As your post suggests, de-cluttering (actually, avoiding the clutter to begin with) is a form of frugality because it limits your possessions to those things that really bring you function or pleasure. I often tell my spouse that I don't care so much about the money being spent, but on the fact that stuff is coming into our lives that serve no purpose other than to take up space. As baby boomer, that is high up on my list of irritants.

Re: quis custodiet ipsos custodes?

Mr. ToughMoneyLove — Tue, 23 Dec 2008 02:07:11 -0000

Wall street bankers, accountants, lawyers, and the politicians who need their money form a circle of incestuous relationships. Consciously or subconsciously they strive to do what the others need to have done. I don't think it will ever change until the entire Wall Street culture is destroyed. Unfortunately, Paulson is trying hard to prevent that.

Re: how to pay less income tax

Mr. ToughMoneyLove — Wed, 15 Apr 2009 08:30:37 -0000

You have hit upon one of the biggest reasons to pay-off a mortgage. A home that you own (and not the bank) can provide you shelter services month after month, i.e., imputed income, but it's all tax-free. As tax rates go up and investment returns remain uncertain, this benefit becomes even more valuable.

Re: enjoy earth day, then forget about it

Mr. ToughMoneyLove — Wed, 22 Apr 2009 21:53:16 -0000

I would take it one step further: Just ignore Earth Day altogether. It's pointless and a waste of resources unto itself.

Re: making money with a credit card

Mr. ToughMoneyLove — Fri, 15 May 2009 17:00:31 -0000

The rewards card "I never carry a balance" advocates and defenders also overlook the repeated studies that show that people who buy with plastic spend more (including on the same goods and services) than do people who use cash. (I wrote about the most recent of these studies not long ago.) Everyone says "not me" but those studies don't lie. The card companies know about them so if you think you are the winners and the card companies are the losers, you are fooling yourself.

Let's be honest - lots of bloggers make lots of money pimping credit cards. As long as readers understand that, they can make their own decisions. It just so happens that most of those decisions are lousy ones.

Re: making money with a credit card

Mr. ToughMoneyLove — Sat, 16 May 2009 09:21:28 -0000

Steve - I was not pointing fingers at you or any blogger in particular but you can tell who they are when you see non-stop credit card reviews with affiliate links on their sites. Nor do I say that every cardholder is an overspender. But as a general rule people who use plastic - even if they do not carry a balance - spend more than people who don't. The studies have shown this repeatedly. Thus, if someone gets $640 cashback in a year but exceeded that amount by overpaying or impulse shopping (you know they are out there), then that person has not made money on that card. That's OK as long as you understand it and can afford it. So the argument that credit cards are a money-making tool for their users is an argument that has limited application to a very small group of people, probably including you and some of these other commenters who are now upset with me. BTW - my "pimp" comment was perhaps over the top but I like to throw words like that in now and then to keep the conversation going. No offense intended to you or any of your readers.

Re: making money with a credit card

Mr. ToughMoneyLove — Mon, 18 May 2009 01:21:46 -0000

Four Pillars: If you read the studies (as I have done) you will learn why many people spend more with plastic than they do with cash. I commented on the Rewards cards because so many people claim to make money using the rewards without considering that they might actually be better off not using a card at all. If you sell a payday loan in your footer, that's a choice you make. If you write a post promoting payday loans, that is a different choice. I choose not to do either but I understand that others make different choices. But that difference gives us something to talk about, does it not?

Re: My Thoughts on FaceBook’s TOS Changes

Mr. ToughMoneyLove — Wed, 18 Feb 2009 00:54:19 -0000

I think you are missing the point of some of the concern. It's not all about privacy or indexing and storage that never goes away. It's also about Facebook's claim to your content for purposes of re-publishing and sub-licensing for profit. If you are a blogger who imports your feed to your Facebook page, FB now has the right to anything it wants with it as a re-publisher, without your permission and without compensating you. That's why today I stopped importing my feed.

Re: Free Emergency Radio | Hey, It's Free!

Mr. ToughMoneyLove — Tue, 16 Sep 2008 16:52:53 -0000

Radios all gone

Re: Avoid these 5 Financial Mistakes Regardless of intelligence

Mr. ToughMoneyLove — Sun, 26 Oct 2008 18:48:41 -0000

Thanks for the mention. I look at my credit reports annualy (for free) to check for identity theft but I never look at my credit score. People are obsessed with credit scores which is exactly what FICO, TransUnion, and the rest want to happen. Don't let them do it to you.

Re: Goals for 2009 - Not Resolutions

Mr. ToughMoneyLove — Thu, 01 Jan 2009 22:55:59 -0000

Thanks for the mention and for joining the non-resolution club with us.

<abbr>Mr. ToughMoneyLove’s last blog post..Consumers, Lenders, and New Year’s Resolutions</abbr>

Re: Life Insurance and Annuities may be Right for Retirement Despite Money Magazine

Mr. ToughMoneyLove — Thu, 19 Feb 2009 10:18:56 -0000

Great analysis here. As you say, there are exceptions to most every rule of personal finance. I actually have some cash value life insurance that I have had for years and intend to use in retirement when I need some tax free income (e.g. return of premium). I'm not a fan of equity indexed products but a fixed annuity is on my agenda to consider. Keep this good stuff coming.

And thanks for the mention.

<abbr>Mr. ToughMoneyLove’s last blog post..My Life as a Volunteer Tax Preparer - Week 3</abbr>

Re: Your Credit Score Matters

Mr. ToughMoneyLove — Tue, 09 Jun 2009 08:21:54 -0000

Thanks for referencing my contrarian views about the credit score. Your advice to sister in law about checking up on boyfriend's financial history is sound. I don't consider knowing or even occasionally checking your credit score to be unwise. On the other hand, so many consumers become obsessed with their score that they allow it to control their behavior beyond reason.