Best of January and February 2008

Photo Credit: Wolfgang StaudtWelcome to the Best of January and February 2008. Here you’ll find the best articles, posts, tools, resources and news about money, finance and investing from the past two months.

News and Analysis

• Are payday loans actually good for us? An Experimental Analysis of the Demand for Payday Loans (45 page pdf file) written by a team of researchers from George Mason University takes an eye-opening perspective on the subject:

Abstract: The payday loan industry is one of the fastest growing segments of the consumer financial services market in the United States. The purpose of our study is to design an environment similar to the one that payday loan customers face. We then conduct a laboratory experiment to examine what effect, if any, the existence of payday loans has on individuals’ abilities to manage and to survive financial setbacks. Our primary objective is to examine whether access to payday loans improves or worsens the likelihood of financial survival in our experiment. We also test the degree to which people’s use of payday loans affects their ability to survive financially. We find that payday loans help the subjects to absorb expenditure shocks and, therefore, survive financially. However, subjects whose demand for payday loans exceeds a certain threshold level are at a greater risk than a corresponding subject in the treatment in which payday loans do not exist.

• Experian files lawsuit against LifeLock

Experian, one of the big three credit bureaus, sued LifeLock in the U.S. District Court for the Central District of California. LifeLock is a company that promises, for a fee, to guard you against identity theft. One of the things it does to accomplish this is to place a fraud alert on your credit files every 90 days. Experian claims this constitutes false and misleading advertising and fraud, presumably because fraud alerts were intended to protect consumers who believed their identity had been stolen, not to protect against future possible identity theft.

• Selected Major Indexes

This article lists the returns of some of the world’s major indexes.


• HomeSaver Advance

Fannie Mae recently announced a new program to assist at-risk borrowers with refinancing and loan workout assistance. “HomeSaver Advance is designed to help qualified borrowers bring delinquent mortgages current and keep their homes. With HomeSaver Advance, servicers can now offer an unsecured, personal loan that will enable a qualified borrower to cure the payment default on a mortgage loan that Fannie Mae owns or has securitized, with fewer up-front costs and generally in less time.” Loans are for 15 years a 5%, with a 6 month no interest/no payment period. You can download a pdf version of Fannie Mae’s HomeSaver Advance Fact Sheet

Smart Spending

• Little Steps: 100 Great Tips For Saving Money For Those Just Getting Started

A great list of ways to save money from The Simple Dollar.

• 50+ Frugal Tips, Ideas, and Resources

This is a list of lists from Moolanomy! Fifty-two links to articles with ideas on how spend your money wisely. Some of the great ways to save money include:

• 101 frugal Christmas present ideas;
• What is Frugality and Are We Frugal?;
• 30 Frugal Gift Ideas to Show You Appreciate Someone;
• Ultimate Frugality - The Best Free Software For Windows; and
• 75 Frugal Hacks for Your Home.
• 21 Money-Saving Sites from Around the Web

This article from Get Rich Slowly includes links to sites that can help you save money, such as Fat Wallet:



eBooks and Articles

• Census Atlas of the United States

If a picture is worth a thousand words, then the U.S. Census Bureau’s new Census Atlas of the United States speaks volumes about how the nation’s population and housing characteristics have changed over the years. The atlas, with more than 700 full-color maps, is the first general population and housing statistical atlas published by the Census Bureau since 1925.


• The 13 Most Overlooked Tax Deductions

“Years ago, the head of the IRS told Kiplinger’s Personal Finance magazine that he figured millions of taxpayers overpaid their taxes every year by overlooking just one of the money-savers listed [in the article]. Claim them if you deserve them … and cut your tax bill to the bone.”

• Taking the Mystery Out of Retirement

This publication by the U.S. Department of Labor is a step by step plan to retirement. It includes interactive worksheets that cover such topics as current assets and savings, projected asset and savings, and expenses in retirement. You can also download the fully illustrated 62-page Adobe PDF narrative.

• The Economic Mobility Project (1 MB pdf file)
  Download the key findings (200 KB pdf file)

The Economic Mobility report , “authored by a team of scholars at the Brookings Institution, is one in a series of major research products that aims to further enlighten the public dialogue on economic opportunity. While it offers reassuring findings in some areas, in many others there is room for concern. By arming the public and policy makers with facts about the status of opportunity in America today, this volume seeks to stimulate and frame the debate about which policies are likely to be most effective in ensuring that the American Dream endures for the next century.”

• Dave Ramsey’s Baby Steps

The M-Network did a series on Dave Ramsey’s 7 Baby Steps to Financial Freedom.

• The Real Cost of Homeownership

Here are a couple of additional costs that need to be considered when taking the leap from being a renter to being a homeowner.

• Are Traditional Indexes the Best Benchmarks?

This article looks at traditional indexes, including the S&P 500, and considers whether they remain a relevant benchmark against which to compare investment returns.

• The 5 Year Stock Market Rule

Don’t invest in the stock market unless you’re going in for 5 years.

• Will Divorce Sink the Retirement Ship?

Divorce is painful, emotional, financial and otherwise. I now that having lived through two divorces by the time I was 12. This article looks at some of the financial issues that arise during a divorce.

• To Roth or not to Roth 401(k)

“Let’s start with one basic but often misunderstood fact. Although they’re effectively mirror images of each other -with a regular 401(k) you invest pre-tax dollars and pay taxes at withdrawal, while with a Roth 401(k) you invest after-tax dollars and pay no tax at the end -in a pure economic sense there’s really no difference between the two.”

Cool Tools and Resources

• 
  Death and Taxes 2008 Online Poster

Do you want to know how your tax dollars are being spent? This massive online poster tells all.


• Voyant’s @Home financial planning tool

Voyant @Home helps people understand the big-picture impact of life-changing events and their long-term financial implications - from the birth of a child to the early retirement of a spouse.


• Does dollar cost averaging really work? Check out this online dollar cost averaging calculator and find out for yourself.
• The Investor Awareness Index

“The Investor Awareness Index is the only resource that rates the comprehensiveness & effectiveness of a company’s initiatives to generate awareness for its stock within the investment community. The 0-10 rating scale is designed to assist in the investment research process by providing investors with unique insight into a critical element for a successful investment: understanding if a company is doing the right things to generate broad awareness among investors, portfolio managers, and stock analysts.”

• Mortgage Marvel: A tool to help you compare mortgage rates
• Google Sites: “Google Sites is the easiest way to make information accessible to people who need quick, up-to-date access. People can work together on a Site to add file attachments, information from other Google applications (like Google Docs, Google Calendar, YouTube and Picasa), and new free-form content.”
• The Life Cycle of a Blog Post


It’s interactive, so make sure to click through if you want to check it out.

Source: Cool Infographics

• The cost of gasoline:


Source: The Price of Gasoline

• Boulevard R

An online financial planning tool. Here’s a Youtube video describing the tool

• The Finwikian: Your Two Cents on Personal Finance — a new personal finance wiki)

A community has grown up around personal finance blogs. As a librarian-type, I felt compelled to organize it into a useful resource. Obviously, no one site will ever capture the multiplicity of viewpoints and experiences found in the individual sites. However, I hope that this one will be valuable for bloggers and for those looking for information.

For example, each blog page links to tables of blogs—such as Personal Finance Bloggers, Tax Bloggers, or Frugality Bloggers. These tables allow you to discover other blogs with similar interests, to learn a little bit about them by visiting their Finwikian pages and then to visit the blogs themselves if you’re interested.

That makes it an excellent tool for writers and readers, you can share your blog with others, you can contribute to pages on other blogs you read, and hopefully you will discover new blogs in the process.

There will be a number of pages on various topics from Dave Ramsey and his Debt Snowball to Credit Card Arbitrage and Peer To Peer Lending. I can’t create them alone; I hope that the personal finance community will join together in making this not just one person’s site and idea, but our site full of our ideas.

I thought I’d end this Best of with a Lending Club commercial I found on YouTube. This goes back to the days when Lending Club was on Facebook only. Trust me, they’ve come a long way. . .

Tagged as: best of, debt, Investing, Loans, personal finance, saving