By Amanda Morrall
1) Financial journos and money
At a party recently someone asked me whether I was "one of those" people who dispensed advice that I didn't take myself. I laughed. Two points: First, as I'm not an authorised financial advisor I don't dispense advice. Second: as a financial journalist, I'm entitled, just like everyone else is, to my opinions. My role, as I see it, is more as a messenger or perhaps a purveyor of information. My answer to this person's question was, in short, that I try to practise what I preach.
As evidence of that, I spent a manic weekend shifting six blocks down the street, a move that I have calculated will save me $5,000 a year in rent. The move itself cost $100 thanks to two benevolent souls who helped me out; $80 for a truck and $20 for kebabs. Diesel was another $10, which one of my helpers kindly picked up.
To satisfy your voyeuristic urges, Wall St Journal money correspondence Heidi N. Moore, in the following Q&A with thebillfold.com, reveals her common sense values and habits and discusses the aching dissimilarities between the worlds of corporate and personal finance.
I particularly enjoyed the last question when she was asked whether her job has given her any special insights.
LS: Has covering Wall Street influenced how you manage your own money?
HM: I generally keep work and myself separate. The money I write about is like Monopoly money—we’re talking about billions and trillions of dollars. But it’s good to know how a company’s balance sheet works, and that’s applicable. Really high finance has very little to do with personal finance. The things that companies do, we would all get arrested if we tried. So it’s not tremendously useful. But this isn’t the kind of thing where more knowledge will solve all your problems. We all know that to lose weight you need to exercise and eat less, but you have to get to a point where you apply that. I don’t think everyone just wakes up one day and figures it out. You have to relearn it everyday.
The idea of living within your means is something that our society has been missing for decades and decades. It should be a comfort to young and middle-aged people that people die never figuring this stuff out. It’s hard. But to know you need to figure things out is an awesome place to start, and that’s a form of wisdom that it takes people years to get to. I think it’s valuable to hit bottom. It teaches you that it really sucks to be in that position—it’s like aversion therapy.
2) Baby bumps
Children are a major set back to one's finances. Fortunately they enrich your life in other ways. As I've written many times before, the best way to cope with the financial pains is to prepare for them.
Here's a first person, on how one couple was affected by having a family and modifications they have made to adjust for it.
3) A man is not a financial plan
Geradline Sealey, writing for Time Money, outlines four financial barriers that hold women back from taking their financial affairs to a higher level beyond the domestic. In brief, they are: 1) Lack of confidence 2) Worrying too much about stuff that doesn't matter 3) Contracting the Cinderella syndrome; expecting a fairy godmother or a prince to solve their financial problems and 4) Focussing too much on goals instead of the numbers.
4) Mitt's punitive tax burden
Not that we need it but more proof the system is broke: Forbes Money reports on U.S. presidential candidate Mitt Romney's effective 14% tax rate. He and his wife paid US$1.9 million in federal tax on gross income of US$13.7 million. Apparently their tax bill would have been even smaller had they fully claimed all charitable donations. How long before the revolution begins I wonder?
5) Rich listers
So you can keep abreast with who comprises the 1%, here's the latest list of the top 400 wealthiest individuals in the U.S as published by Forbes. What's interesting (or maybe disturbing is a better adjective) is that when Forbes started this list making exercise back in 1982, the admission to the elite club was based on net worth of US$75 million or more.Over the three decades, it's risen to US$1.1 billion, a 10-fold increase. The combined net worth of America's 400 richest individuals is now US$1.7 trillion up from US$1.5 trillion one year ago. The average net worth of these mega richsters is US$4.2 billion. Insane.
To read other Take Fives by Amanda Morrall click here. You can also follow Amanda on Twitter @amandamorrall