“1st floor; sports logo gear, Lee Brand jeans, and soon, our husky Hispanics section.”

So this is what it’s come to.

Kohl’s, the amazingly outdated department store chain with its radiant white perfume counter and its Semiannual Men’s Suit Events, is on the defendant end of a new lawsuit. The basis for this suit is so stupid that it’s hard to recite for you here without seething, but we’ll attempt.

Some shoppers feel they were defrauded. They don’t question the quality of the merchandise, nor do they claim that they were charged a different price than that which appeared on the label.

The plaintiffs’ argument is that Kohl’s smacked them in the face with a big old rusty anchor. The lead plaintiff is a sensitive California gentleman named Antonio S. Hinojos, who bought $150 worth of Samsonite bags at his neighborhood Kohl’s. So far so good, right?

Oh no. The problem is that Kohl’s claimed to have, or Hinojos claimed that Kohl’s claimed to have, marked the price down from $300. Hinojos asserts that the luggage was never available at $300. Let’s rephrase that as a logically equivalent statement:

A retail consumer is complaining that the store he chose to patronize sold its goods at too low a price.

He also bought some polo shirts at $36 apiece. Is that a fair price? According to the U.S. 9^th Circuit Court of Appeals, it doesn’t matter. It’s how much they were discounted off their original price that’s the sole determinant of whether the shirts were worth buying or not. Kohl’s claims the shirts in question were reduced 39%, implying a regular price of $59. Hinojos claims that the regular price was lower, and that he was somehow harmed by Kohl’s never having charged the higher price.

Again, because this lawsuit is so ridiculous that it’s easy to think you must have misunderstood some point, or that we failed to explain it clearly enough: Hinojos isn’t claiming that he tried to buy a $300 item that was listed on sale for $150, and was then denied the discount. He paid $150, just like everyone else who bought Samsonite baggage that day. Neither Hinojos nor Kohl’s dispute the prices of what he bought. Hinojos’s argument is that by offering its wares at as much as 50% off, when in truth they were discounted by some smaller percentage, Kohl’s enticed him to buy things he otherwise wouldn’t have.

Here’s Judge Stephen Reinhardt of the 9^th Circuit, offering educated blather no layman could hope to spew:

When a consumer purchases merchandise on the basis of false price information and when the consumer alleges that he would not have made the purchase but for the misrepresentation, he has standing to sue.

Hinojos is the philosophical descendant of every idiot housewife who came home with an overpriced and/or unnecessary handful of shopping bags.

“How much did that cost?”
“I got it on sale!”

That’s not an answer. Things cost what they cost, not the reduction by which they were discounted. That sounds so utterly obvious, so tautological, so A-is-A, that it seems insulting to have to point it out. But what do we know? Less than at least one judge on the 9^th Circuit, evidently. Who carries on for 21 pages, including this passage:

[T]he bargain hunter’s expectations about the product he just purchased is precisely that it has a higher perceived value and therefore has a higher resale value

Hinojos suffered economic harm because should he choose to sell his polo shirts somewhere down the road, he wouldn’t be able to get all that much for them if the future buyer knew that they had never been sold for $59 apiece. Leaving aside the question of who buys clothes with the intention of doing anything other than tossing or donating them at the end of their useful life, how is an item’s price not its price? This is neither fraud nor misrepresentation by any rational understanding of the terms.

[C]onsumers such as (Hinojos) reasonably regard price reductions as material information when making purchasing decisions

We’ve asked a similar question before in a different context, but ceteris paribus, which woman is more desirable:

1. the one who’s 5’4” and weighs 130 pounds
2. the one who’s 5’4”, 130 pounds, and used to weigh 192 pounds?

If you’re chronic clothes shopper Antonio Hinojos, the only possible answer is c), the brother of the formerly fat one.

Of course America needs tort reform, but we’re interested in this story primarily because of how it illustrates a financial point. If you believe – whether sincerely, or for purposes of filing a nuisance lawsuit against a multibillion-dollar corporation – that things cost something other than what they cost, you’re a moron. Imagine Mr. Hinojos negotiating his salary:

Employer: “This neurosurgeon job pays…well, it normally pays, um, $18,000 a year. But for a qualified, dynamic, go-get-‘em candidate like you, we can go as high as $22,000 plus bene—“

Hinojos: “I’LL TAKE IT!”

If Mr. Hinojos had instead visited Rick’s Budget Valise Emporium, where that same Samsonite ensemble sells for $145 every day, he presumably wouldn’t have bought. After all, what’s the point? Where’s the savings? And if Rick’s had raised the price from $135 the previous week? Forget it. Let the seller dictate the terms of the sale, not you.

(That was sarcasm. Let the seller dictate as little as possible. Look at every transaction from the other party’s perspective. Walk away from a deal you don’t like; there’ll be others. Find the details here. And stop clogging up the court system with your vexatious foolishness.)

Guest post time! This one was written by Jason Bushey. Jason is a full-time personal finance blogger, and he runs the credit card comparison website Creditnet.com. Not only that, but we agree with just about everything he says. You read now: 

Google the term “free credit cards” and you’ll see close to 500 million results displayed. Some results are legitimate, others not so much.

So is there really such a thing as a free credit card? Technically yes, but it’s really up to the cardholder to determine how long that card stays “free”. If it’s free credit cards you’re after, the key to your search is to identify and ultimately dodge the following fees…

Annual Fees

The easiest fee for consumers to identify is the annual fee. Any card that requires an annual fee is decidedly not free. That said, not all annual fees are a ripoff. In fact, some of the top credit card offers on the market require a marginal annual fee (usually under $100), and often that fee is waived the first year of cardmembership.

Noting the demand for no annual fee credit cards in today’s market, some credit card issuers – including American Express, Barclaycard and Chase – have released two versions of the same cards, one that requires an annual fee and one that does not. In each instance, the card that requires the annual fee is superior in just about every category beside, well, the annual fee.

That said, there are some superb credit card offers on the market today that require no annual fee. If you’re in the market for a card that’s essentially free to carry, make sure to avoid annual fees.

Foreign Transaction Fees

More under-the-radar are foreign transaction fees. For consumers that never leave the homeland, these fees are of no concern. But if you do plan on taking your credit card abroad, than you should absolutely consider a card that requires no foreign transaction fees.

Often, foreign transaction fees range from one to three percent per dollar spent, which can add up tremendously over the course of a trip. Before going abroad, identify whether or not your card requires foreign transaction fees and – if so – consider leaving it behind and applying for a new card that does not charge these fees.

Late Fees

Then there are late fees. If you pay late, you’re more than likely going to get hit with a fee, and that doesn’t even take into account the knock your credit score could take if you default on the payment completely. (Don’t pay late. Ever.)

There’s actually one card that never charges late fees – Citi Simplicity®. This card is actually notorious for its lack of fees, since there’s also no annual fee and no APR hikes if you’re late on a payment. Another card that’s light on fees is the Discover it® card, since it waives the first late payment fee (though it’s up to $35 thereafter). This card also requires no annual fee and no foreign transaction fees.

That said, these cards are very much the exception rather than the rule. If you don’t want to pay credit card fees, don’t pay late. It’s that simple, really.

Paying Interest

Finally, there are interest fees. The higher your balance and the higher your interest rate, the more you’re going to pay in interest. Here’s where determining whether or not a credit card is and remains “free” really comes down to your practices as a consumer.

If you carry a balance after your 0% introductory period has expired, you’re unfortunately going to pay interest. And since APR’s generally hover anywhere from 10 to 29.99 percent (according to LowCards.com, the averaged advertised APR for credit cards is currently 14.25 percent), you could be paying an exorbitant amount in interest each month if you carry a balance. Interest rates make paying down debt arduous and at times seemingly impossible, especially when the minimum payment barely covers any of the interest required.

The only way to maintain an essentially free credit card is to pay your balance on time and in full each month. If you don’t, you could end up falling into the pratfalls of credit card use, which includes accumulating debt, missing payments and ultimately going medieval on your credit score.

In conclusion…

Fact: Free credit cards do exist in theory, but it’s up to you to keep them that way.

Related posts:

1. Is There Ever An Excuse For Paying A Fee To Hold A Credit Card?
2. The Only Credit Card(s) You’ll Ever Need
3. Peeling Back The Onion Of The Durbin Amendment

No, not that kind of turning the corner. (Sorry.)

The incompetent submitters are dropping off, week by week. Even better, a new roster of outspoken ones continues to gradually supplant them. Who knows, within a few decades the Carnival of Wealth might be good from top to bottom. We could hit some rough spots today, but the road looks smoother than ever. Let’s begin:

Newcomer Rob Aeschbach wins for most striking post title: Why You Should Be Doing Estate Planning at the DMV. And not just because you’ll have plenty of time on your hands. Rob regales us with a tale of Jenny, Stevie and Bruce, at least one of whom used to work on the docks/Unions been on strike/He’s down on his luck…

It’s tough. So tough.

(Note: CYC’s home state lets you renew your vehicle registration online, but doesn’t let you use PayPal. You can use something called Pulse Pay, and something else called NYCE, and you can pay via “e-check,” but not by using the largest payment processor in the world.)

Another ex-military guy with an aerodynamic haircut and a flair for both English composition and personal finance wisdom is Jason at Hull Financial Planning. You know how a car dealer would rather lend you money for the next 5 years than take a haggled-over check today? Jason says the same phenomenon happens in investment planning. If you honestly believe that paying 1% of your net worth to a professional every year is a better deal than paying a flat fee to someone with Jason’s skills and qualifications, the good news is that 1% of your net worth is never going to be all that much.

Do you think Canadians are boring and monotonal ciphers who don’t understand dynamism? Well, you’d be right. You’d also be unfairly stereotyping Sandi Martin at Spring-Personal-Finance, another long-overdue new visitor to these parts. As Sandi puts it, being frugal for its own sake is stupid. You don’t use coupons just so you can say, “Witness this 17¢ I saved.” Ben Franklin was a genius, but “A penny saved is a penny earned” was his 2nd-biggest clunker, right after “Rarely use venery* but for health or offspring.” Unless you can clip coupons at a rate that makes it more lucrative than a job, and derive some mental stimulation out of it while you’re at it. That sound you heard was the bruising of the egos of 10,000 repetitive bloggers, ready to call Sandi hurtful and worse.

Hey Sandi? Ask Paula Pant at the former Afford-Anything to tell you the story of how much it can cost to eliminate a hyphen. Our defending Woman of the Year stops by to inspect her realm and to offer what she calls the weirdest personal finance advice on Earth: Paula thinks you should buy as many Powerball tickets as you can afford.

Just kidding. She said “weirdest,” not “worst.” Read for the details. (That’s what we in the business call a “tease.”)

More gold? Is this our birthday or something? PKamp3 at DQYDJ.net brings back one of our favorite features, one so brilliant we wonder why no one else had thought of it first. If you look at option prices, both call and put, for a particular stock then you should be able to figure out the stock’s eventual price. Is this the ultimate arbitrage, free money for the making? The answer seems more likely to be yes than no.

Glen Craig at Free From Broke explains credit scores. Which sounds like overly basic advice, until you remember that there are tens of millions of Americans whose awful payment histories indicate otherwise. In honor of the recently deceased Dr. Joyce Brothers, let’s mimic those asinine true/false quizzes that used to run in her weekly column:

1. When you have bills to pay and a deadline to do so by without incurring penalties, you should carry a balance. TRUE FALSE

We’re going to miss her.

It’s getting really hard to make jokes about the quality of the posts we’ve been receiving, and Dividend Growth Investor isn’t making it any easier. He defends himself against readers (his, not ours) who say he’d be crazy if he didn’t cash out when a stock undecupled in value. DGI gives his explanation and his long-term strategy. Comes with a chart!

From the splendidly named Fitz Villafuerte, how to grow your business and what sequence events should take. Don’t spend tons of money on a capital investment (say, an industrial quality pasta maker) if your clientele hates pasta. Or if your company does auto detailing. Because that wouldn’t make sense.

(Sigh) Dude, you’re a mechanical engineer. It’s people like you who are going to help us thwart the dawn of the Chinese Millennium. But Jon Haver at Pay My Student Loans, stick to materials science and thermodynamics. Because your personal finance advice is terrifying. Jon thinks you should take out some 7.9% student loans and cross your fingers that the lenders (or federal legislators twisting the legislators’ arms) might forgive those loans sometime in the future. Apparently it doesn’t matter if you’re working on your M.A. in drama, borrowing money to finance your education may be swell. Not a word about getting an associate’s degree and learning how to fix refrigerators or do something else worthwhile.

SB at One Cent At A Time has some ideas for what to do with a tax refund. None of them are bad (pay off your credit card debt, start a business etc.) But none of them are as good as our recommendation to set up an LLC, have profits pass through it and get taxed at rates lower than those for wage income, and never overpay your personal income taxes and thus end up with a tax refund in the first place. Don’t carry credit card debt either.

Michael at Kitces.com questions conventional wisdom, and thank God because if no one did that we wouldn’t have human-powered flight nor Scientology. Michael wonders if financial planners are really serving their clients’ best interests when using “bucket” strategies – a bucket of bonds for the short term, money-market funds for the middle term, stocks for when you’re sitting around the retirement home wondering why your grandkids never call. But is it realistic to never touch the “long-term” securities just because of a plan you devised decades earlier?

Dammit. When a submitter singles us out for praise in his submission email, and indicates that he’s clearly a fan, we’ll try to find something positive to say about his post. (clenching teeth) Here goes. Paul Latta at Each Tiny Moment sends us something titled “Gambling is For Chumps”. Unfortunately, the title continues. “…Unless They Use This Secret.” Paul thinks you should join a players club and get cash back every time you play. It’s the casino equivalent of a Discover card, and we maintain that you’re far better off not knowing what a players club is in the first place.

Paul does give us an opportunity to bring up a related point, though. As CYC’s dry-season headquarters are in Las Vegas, gambling is something of a familiar activity to us. That doesn’t mean we partake, of course, but we’re surrounded by it. To the point where we’ll eat dinner at casino restaurants; and forgo the big discounts that they offer to players club members, because we aren’t. Yes, membership is free. So is that first childhood cigarette. We’d rather pay a few bucks more and not deal with the emails and direct marketing offers, thanks. Irrational? Perhaps. Or maybe that’s the price we’ve chosen to affix to not being in the database.

Harry Campbell at Your PF Pro explains how to build credit when you’re young and don’t have much of a credit history other than cards. His suggestions are sound, given that it’s 2013 and the Fair, Isaac & Co. credit scoring formula still hasn’t leaked. Incredible.

You’re too stupid to save for retirement. That’s not us talking: that’s from generations of politicians, dating back to history’s greatest monster, Franklin Roosevelt. Thus Social Security, the Ponzi scheme that will inevitably end up as such schemes do. Still, Social Security gives Kristine McKinley (now there was a president, except for the tariffs) at Social Security Retirement Income the chance to make an alluring infographic about how to maximize the post-career scratch you’re entitled to.

We’ll close things out with our Franco-Guatemalan heroine, Pauline Paquin of Reach Financial Independence. (Not to be confused with Franco-Guatemalan heroin, which averages around $200 a gram and is even farther out of our reach than Pauline is.) This post is her usual great stuff, and we couldn’t summarize it any more pithily than she did. In her second language, no less:

I have been wearing the same jacket since October 2010. And my net worth has grown 87% since then. My friends don’t seem to see the correlation.

Thanks for coming. See you tomorrow.

*Venery = sexytime

Related posts:

1. Carnival of Wealth, Tide Turning Edition
2. Carnival of Wealth, Findlay Toyota Are Filthy Cretins Edition

Dashing young men have all the advantages.

Word association time.

Self-help book. Go.

68% of you said Napoleon Hill’s Think And Grow Rich, which is close enough to 100% for our purposes.

It’s the classic of the genre, if not its progenitor. Even if you haven’t read it, you’ve subconsciously committed its most famous concepts to memory. Visualize your success. If you can conceive and believe, you can achieve. Don’t take no for an answer. Hill was writing bumper stickers and motivational posters before people had cars and cubicle walls to affix them to.

This isn’t a book review, or at least not a review of the book past its 1^st page. Hill’s longtime protégé, W. Clement Stone, tells a story about selling newspapers as a 6-year-old, and running into an uncooperative restaurant owner who would just as soon not have an urchin entering his diner and pestering his customers. But Stone came back every day, wearing down the already weary owner until he finally let Stone in the door. Stone sold all his papers, did so again the next day (fitting with the narrative, Stone’s father had of course died 3 years earlier), had his own newsstand by the time he was 13 and his own insurance company by his late 20s.

We maintain that if Stone had taken no for an answer somewhere along the line, he would have had the newsstand and the insurance company even earlier.

If you never took no for an answer, you might never make a sale. Stone lucked out in that the first restaurateur he contacted happened to be something of a soft touch. Imagine if 6-year-old Stone had first run into this happy character instead. Stone would still be begging for an in. And with all the time that would have elapsed, Stone’s payoff for selling each newspaper would have gradually decreased. Add human mortality and the obsolescence of printed media, and Stone would have starved to death instead of living to 100 and becoming something approaching a billionaire. All because a foul-tempered man engaged him in a battle of attrition before Stone’s sales career had a chance to launch.

No matter how polite you are or how noble your intentions, single-mindedness for its own sake will eventually backfire on you. Show up every day at the door of the insurance firm where you want to work, assuming you want to sell insurance for some reason, and sooner or later security will escort you away. Ask for a date from a girl who’s not interested, and she’ll continue to not be interested. The cutting of one’s losses is an idea that Hill never thought of.

Here’s a contemporized and far more practical interpretation of the idea of “getting to ‘yes.’” Understand that the world is large and that opportunities abound. The existing homeowner won’t sell your dream house to you? Find another dream. The employer who won’t pull your résumé out of the pile refused to recognize your brilliance? Find another employer. Never taking no for an answer is static. Taking whatever answer they give you, and gaining knowledge from it, is dynamic.

If you want to, you can misinterpret this as “When the going gets tough, quit.” Play to your strengths. A kid with no inherent aptitude for salesmanship, but a plan to get that first sale no matter how powerful the objections, would never have sold that first paper without substantial cooperation from the buyer. Commerce is a two-way street. The same principle applies to just about any endeavor you can think of. The sooner you find out that sales, or law, or account management, or software design isn’t your thing, the happier and more productive you’ll be. For a better manifestation of single-mindedness, we’ll take that practiced by Thomas Edison (grade school dropout.) Whether the story is apocryphal or not, it illustrates the point: “Mr. Edison, you’ve failed in 700 attempts to create an incandescent light bulb. Quit already.” “No, I’ve succeeded in removing 700 ways that don’t work. Besides, this is fun.”

Nowhere in Think And Grow Rich is there a word about following one’s passion, or even just following one’s interest. In Hill’s defense, the United States was still largely an agricultural economy at the time. Selling newspapers, or insurance, was as exciting a career as astronaut or porn star when compared to staying home in East Nowhere, Kansas to castrate bulls and bale alfalfa. But we’re better than that. Not only do you not have to hate your job, you don’t have to pound your head against an idiomatic wall to win over one reluctant lead in the sales book. Hit the 2^nd through 30^th people on the list instead.

Boy, this personal finance advice that barely touches on finance is easy to write. No wonder so many people love Trent Hamm and his imitators and duplicators.

To quote Chuck Klosterman, take no for an answer, but never take maybe for an answer. Maybe means “yes.” Just keep talking.

Yes, the Antichrist makes an appearance on CYC this week. We can explain. That’s him, standing next to an felonious and unapologetic evil psychopath of a dog murderer.

That’s Rich Abajian, general manager of Findlay Toyota, which is a dealership near CYC headquarters. Last week a CYC acquaintance – a septuagenarian lady – had occasion to involuntarily do business with them. This is what happened.

The lady in question drives a 2002 Camry, which she keeps in impeccable condition and barely drives. Last week the check engine light came on.

For those of you who don’t already know this, here’s what you do when your check engine light comes on. You plug in your code reader, which is available for a reasonable price at AutoZone, and figure out what the problem is. If it’s something serious, you then take it ANYWHERE ON EARTH BUT TO A DEALER. You spend 5 minutes on Angie’s List and find a highly rated shop. We cover this in the book, in a chapter that today’s protagonist unfortunately never read.

So she hot-footed it to the dealer. Who wrote her an estimate and charged her $99.95 for the privilege. Yes, in 2013 an auto dealer attempted to charge a fee for an estimate (and succeeded, at least once.) Even the most rapacious dealer knows that’s not how you grease the suckers. You give a no-charge estimate, maybe throw in a complimentary cupholder or t-shirt, then frighten the mark with visions of gruesome death on the highway if she doesn’t consent to all the work you authorized. Even casinos don’t have the gall to charge you for your drinks before convincing you to drop thousands at the baccarat table.

But they charged her that much, and she paid it for some reason instead of standing her ground. That’s not even close to the climax of the story.

Findlay Toyota threatened not to let her leave the freaking service department without doing the work. Here’s the estimate, for $3304.28:

It includes the following jobs: onboard refueling vapor recovery valve, oil pan reseal, power steering flush, wheel alignment, front engine mount, dog bone mount, brake system flush, fuel injection service. None of which the Camry requires. Not “a little,” not “hardly any.” None. The oil pan is fine. The ORVR valve is fine. The power steering fluid isn’t contaminated at all. The front engine mount isn’t broken. Not a hairline crack, nothing.

We have a smog law here in CYC’s neighborhood. You go to a government-approved tester once a year, pay $30 or so to make sure your vehicle’s emissions fall below the threshold, and you can’t renew your registration unless your vehicle passes. The law exists mostly to cover pre-1980 carbureted vehicles, and well over 90% of the rest pass on the first attempt unless they have leaky O-rings or something. When she balked at the $3304.28, they told her “You’re going to fail your test.” After they shook her down for the $99.95, she went to the testing center and passed easily.

This dealer indeed hired Michael Vick to do commercials for them last year. Some animal rights people protested when he did an appearance at the dealer, in a vain attempt to rehabilitate an image that’s miles beyond repair. The amoral general manager and his sycophantic employees dug their heels in, talking about what a bunch of good that dog-killing feces discharge does for the community. How much it was court-ordered, Abajian didn’t mention.

Normally, we here at CYC are all for parting the gullible from their money. And we understand that like pawn shops and payday loan places, car dealerships survive by their lack of scruples. But this is 8 shades beyond reprehensible. If you happen to live in Las Vegas and feel like buying a Toyota, go here instead. And if you don’t want to mess around with a scanner tool, get your work done here.

Still homicidal. Let’s cool things down by starting this week’s CoW. We can always count on Darwin’s Money to be provocative, and this week he attempts to place a marketplace value on the worth of a stay-at-home mother. It’s a stunning riposte to those tiresome pop-news stories on how mothers are grossly underpaid and should command Kobe Bryant-level salaries, or something close. They shouldn’t.

Dividend Growth Investor keeps himself anonymous and with good reason, given the great details he gives about his portfolio. This week he looks at dividend achievers, defining them as companies that have increased their dividend in each of the last 10 years. None of them are glamour names, unless you consider Lincoln Electric Holdings and York Water to be glamorous. But no, keep spending money on crap like the Facebook IPO. That’ll make you rich.

Michael at Kitces.com returns after a brief layoff. You sure you want to use a 529 plan for college? A Coverdell Education Savings Account might make more sense. Michael explains the difference and the advantages for each.

If we can write about something that’s only of local interest (see above, and this time let our bile sink in), so can Harry Campbell at Your PF Pro. How to save money at Sea World. Tip #2, bring your own food. Harry, you’re making Trent Hamm blush.

The incredible Pauline Paquin at Reach Financial Independence also returns, after a luxurious few days doubtless spent suntanning on the Guatemalan Pacific coast. Pauline reminds us that a government’s duty is to look after the health of its denizens, and that in France (Pauline’s country of origin) regular checkups and office visits are cheaper than a pack of cigarettes. Literally cheaper, not just figuratively cheaper in the sense that the cigarettes could cost you your life.

Pauline’s no dummy, and explains what the inevitable consequence is of artificially pricing a good below its market value. There’s a shortage of doctors in France, and a wait in the order of weeks for those inexpensive checkups. The good news is that the wait at emergency rooms can be measured in mere hours. Also, specialists (e.g. dentists) will try to upsell you on unnecessary stuff that actually makes a profit. Kind of like Findlay Toyota, only with the impetus of government behind it. Even better, abortions are free and surgical birth control is not. Why run the risk of never conceiving, when you can have the fun of crushing a baby’s skull and then vacuum its brains out instead?

And that’s what single-payer will be like, the ultimate goal of Obamacare. Good times!

It wouldn’t be the CoW without at least one post that consists of one blatantly self-evident line after another. Emily Guy Birken at One Smart Dollar to the rescue:

Spouses who decide to stay home with their kids know that they will be making sacrifices. It’s difficult to put a career on hold and easily be able to pick it back up again several years later. And losing one parent’s income means money is tighter

Didn’t know any of that, did you? How about this:

Before deciding to stay home, both spouses need to sit down and talk about protecting their finances and building for the future

Yesterday was Mother’s Day. She’s just being a mommy, that’s all. Now eat your vegetables and drink your juice.

Let’s wash that off with some DQYDJ.net, shall we? The singularly brilliant PKamp3 shows us that the Dow is finally rising in real terms. After 13 years of stagnation. Pop the champagne. But not before paying capital gains taxes and transaction fees. No wonder poor people hate the rich so much.

Finally. After an interminable length of time in which she never submitted to us, Sandi Martin at Spring Personal Finance has something to share. Alright, maybe the length of time was only a week since we discovered her and her formidable blog. The Canadian financial planner explains why it’s foolish to ever hire one of her commissioned counterparts. They’re as crooked as the service writers at Findlay Toyota, though operating in a different realm. Read Sandi: she’s our best new submitter since…

This guy. Jason at Hull Financial Planning. Jason explains how online poker became more difficult to profit at once the distance between the best and worst players started closing. The same thing happened in the realm of financial planning too, and will do so in any endeavor in which information becomes democratized. That’s way too brief a summary of a layered and thoughtful (as always) post. Sheer genius, or a valid approximation of it.

Thanks again for coming. See you tomorrow.

Today’s kids have atrocious posture

Presenting the Control Your Cash Open-Book Quiz, complete with answers. For each of our next 3 posts (excluding Monday’s upcoming Carnival of Wealth), we’re going to put you in a fictional but plausible financial scenario. If you can figure out what steps you should take, then congratulations. You’ve got this stuff figured out and should be busy making deals instead of reading our site. This will make more sense once you read the 1^st example:

Your friend just came back from Hawai’i, and you can tell it made an impression on her because she’s taken to spelling “Hawai’i” with the ‘okina. She and her husband bought a timeshare condo and think you should buy the adjacent one. That way you can take vacations together (!), which some people are into for some reason. If you ever get sick of Hawai’i, you can always exchange your timeshare week for one in Mexico, the Caribbean or Miami.*

The annual maintenance fees on the condo are $804, and the cheapest financing you can find is 11½%.  You’re going to put half down, and after 5 years all your vacations will be free.

What questions should you ask?
Do you have enough information?
If no, what else do you need and where would you get it?

When we’ve given this scenario to people in real life, the sharper ones usually stop and say, “Wait a second. 11½%?”

We were being conservative. That rate is generous by timeshare lender standards. Here’s a company (DON’T CLICK THAT LINK, WHATEVER YOU DO) that charges 12.9% for the same loan. Why is timeshare financing so exorbitant, when the average residential loan is going for less than 3½% right now?

Profit maximization, that’s why. That, and one dumb customer base. Payday loan places charge 350% annual interest, rather than 5% or 10%, because their less-than-savvy customers want cash and they want it right now. Paying attention to rates? That’s for chumps. In the same vein, liquor stores not only kill alcoholics’ brain cells, the drunks pay them for the privilege (cf. cigarettes.) Someone on a modest income who has overconfident dreams of being a regular visitor to the Na Pali Coast isn’t going to be swayed by usurious interest rates. And no one ever said that both parties in a transaction have to be acting rationally.

The maintenance fee we gave was modest, too. But timeshare owners renters justify what they pay, because that’s what Monkey Brain (® Jason Hull 2013) inevitably does. A prospective timeshare renter sees $804 as a mere $15 a week. That little to keep the place painted and sprayed for bugs? Deal of the century!

Again, look at every deal from the other party’s perspective. (Which should have been the book’s title, except it’s unwieldy.) $804 in maintenance costs. Multiplied by 52 owners. The timeshare company is getting $41,808 a year per unit. No condo unit requires anywhere near that much maintenance, not even if DeAndre Hopkins and Mark Harrison each own a week. The $41,808 isn’t pure profit, but it’s a juicy markup.

The timeshare resale market is vibrant, and populated by buyers considerably smarter than the timeshares’ original buyers. If you made the error of buying a timeshare in the first place, you can expect to recoup no more than 20% of its price when you sell.

Why? Because the maintenance fees never go away. Nor do they ever decrease. Worse yet, many properties aren’t even owned by the timeshare companies that sold your week to you in the first place. Instead the properties are on long-term leases, which means that your timeshare will only be valid for the length of the lease. You’re not going to believe this, but that’s rarely the first line in the sale agreement.

There’s always someone who can justify buying a timeshare even though it’s a horrible investment. Here are a couple of the most common justifications:

• It’ll be invaluable family time. Spending vacations together is more important than money could possibly be.
• It’s not a “timeshare”, so much as it’s vacation ownership.

Yes, these objections are being articulated by a fictional rebutter of our own creation, but they’re still used all the time.

Few things have value that transcends money, e.g. health, eros, eternal salvation. A temporary living space in a desirable location doesn’t count, especially since it’s not a necessity. Nothing’s stopping you from buying plane tickets and renting a one-bedroom suite like normal people do. Which brings us to our second justification.

“Vacation ownership.” Think about that one for a minute. That the concept has to be shrouded in a piece of business jargon should tell you something about how valid it is. A vacation is temporary and evanescent, not unlike a round of golf or, for an even more commonplace example, lunch. The idea of somehow possessing it, whether in perpetuity or for future sale, is absurd. You purchase airfare and a room, you go on vacation, you come home, you pay your American Express bill in its entirety at the end of the month. The end. What is so hard about this, and why would you prefer a different method in which the payments never end?

On top of everything else, timeshares are the one “real estate” “investment” with zero tax benefits. You might as well just put the money earmarked for maintenance fees into a money market fund, and use that for a vacation each year.

Timeshares are among the starkest counterexamples we’ve found to the buy assets, sell liabilities mantra. On an individual level, there are few more efficient ways to impoverish oneself.

*Yes, we’re aware that Mexico and the Caribbean aren’t mutually exclusive. You go to the front of the class, Geography Dork.

Related posts:

1. Control Your Cash’s 6 Axioms For Building Wealth And Thus Saving You The Trouble Of Buying Our Book.
2. Buying a vacation home on a teacher’s salary
3. Months later, this book is still garbage III

It must be that time of year again. The Washington Redskins are being criticized for their allegedly offensive nickname. “Why, we white (and to a lesser extent, other-colored) people who have appointed ourselves the arbiters of propriety find fault with this. Although it’s a literal description of pigmentation, ‘Redskin’ must change.”

The arguments on either side of this issue are so entrenched that they barely need repeating, but here goes.

• Con: Any Indian-themed name is, by definition, offensive. I’m too stupid to draw a distinction between a college calling its teams the Hurons, and that ridiculous Cleveland Indians logo. It doesn’t matter than I’ve never seen an Indian, and wouldn’t know how to behave if I did, but I believe that anatomically accurate Redskins logo is part of the problem. You can’t honor an ethnicity by naming a team after it, you can only insult it. The Notre Dame Fighting Irish and their drunk Mick of a mascot don’t count because I’ve chosen to apply a double standard. White privilege and all that.

• Pro: No sports team would ever give itself a degrading name. There are no San Jose Jackballs or Kansas City Retards. Washington Redskins owner Dan Snyder, despite his thousands of other transgressions, sees Indians to be worth emulating and honoring. Same deal with Jerry Jones and cowboys, Zygi Wilf and Vikings, etc.

Why don’t we go right to the source and see how our Indian friends choose to name their own teams when free of interference?

Last week CYC went on the road, driving through the Navajo Nation, the semi-autonomous area that encompasses a large chunk of northeastern Arizona and parts of Utah and New Mexico. There are 12 high schools on the nation. They operate under the auspices of tribal government, and are attended and staffed almost entirely by Navajo. Here are what 5 of those schools have selected for their nicknames and logos:

• Red Mesa (Teec Nos Pos, AZ) Redskins.
• Window Rock (AZ) Fighting Scouts, whose logo is a stylized Indian complete with feather and headband.
• Tuba City (AZ) Warriors, again with a feathered human head for a logo.
• Whitehorse (Montezuma Creek, UT) Raiders, whose logo is a headdressed Indian atop a horse, brandishing a spear.
• Shiprock (NM) Chieftains, another Indian with a headdress for a logo.

The teams of the only college on the Nation, Dine College, are also named the Warriors.

That was a long preview, but it got us to an irrefutable point. Now to the good stuff that we can all agree on, the Carnival itself.

We’ll start with Catherine at All Things Finance, who says it’s important to teach your teenagers about credit cards and then writes like a teenager to emphasize her point:

Teaching your child financial responsibility is one of the most important tools you brace them with.

“Teaching your child financial responsibility” is not a tool, just like an adjustable wrench is not an abstract phrase. Catherine also graduated college with $90,000 in student loans, which means we can add her to the endless list of authorities on this tired topic.

Upon further review, it seems that Catherine was our Retard of the Month 2 short months ago. We didn’t catch it immediately because she’s writing for a different blog now. Still, kudos to her for getting back up on the horse. Now all she needs is an editor. Well, that and $90,000.

If the grossly indebted college graduate is the #1 stereotype among CoW submitters, the insurance salesman trying to increase his business by sending us a post is a close second. R.J. Weiss at WIA Group (it stands for Weiss Insurance Agencies) asks a fantastic rhetorical question, “Should my spouse have life insurance?” You’re not going to believe this, but the answer is yes. And you’ll never guess whom R.J. thinks you should buy your next policy from.

How much crappier can this week’s CoW get? How about a cut-and-paste Wikipedia job? Take it away, prince ade (sic) at Omobaone.blogspot.com, and if a site has a Blogspot URL you know it’s got to be good. Prince ade lifted a couple of paragraphs from the entry on Carlos Slim Helú. Great job, prince.

The remarkable Neal Frankle returns to the CoW, this time guest posting at Free From Broke. Neal has an opinion on life insurance too, and his is considerably less enthusiastic than that of that guy from a couple of submissions ago whose name we already forgot.

Bryan Chau of Success Pen Pal has submitted before, but needs to get the hang of this. One submission per, Ace. He submitted 3, which normally means we’d reject all of them on principle, but continuing with the inadvertent theme of this week’s CoW we decided to run it anyway. How to handle rejection and success, or something.

Ross Garner at Wallet Hub restores a little dignity to this fiasco with his piece on another Washington debate, this one the mortgage interest income tax deduction. Some lawmakers think the current deduction is too generous to wealthy people, others think the deduction ought to be eliminated wholesale because the federal government needs more of our money, no one whose opinion means anything seems to think that the income tax structure should be dismantled and started again from scratch with a flat deduction for everyone and a flat rate for everyone beyond the basic deduction, with no exceptions.

(Pro tip: “$” is called the dollar sign. It eliminates the need to use the word “dollars,” e.g. “$1 million dollars,” by reducing the word to one simple character.)

Speaking of deductions, Harry Campbell at Your PF Pro points out how you can deduct appropriately documented moving expenses from your taxable income. If you move at least 50 miles, or get audited by an IRS agent who doesn’t know how to measure distances on Google Maps, you might qualify.

Dividend Growth Investor brings quantity and quality every week. Last month he cashed out the index funds in his old 401(k) that was eligible for a rollover, putting them in an IRA. Then, he split the money among 20 dividend stocks. He also articulates his philosophy in a beautifully succinct manner. In the comments, no less, rather than in the article proper:

I would rather buy an outstanding company at a fair price, than a mediocre one at a low price.

Some contributors to the CoW put negligible effort into it, as referenced above. Then there’s PKamp3 at DQYDJ.net, who returns with another of his trademark calculators. This week’s will determine the price change on a barrel of crude oil on any 2 post-May 20, 1987 dates you choose. (Both West Texas Intermediate and Brent.)

It was on that very day that the King, Jerry Lawler, sued King Harley Race for use of that honorific. A wrestling Battle Royal of a different kind, and a suitable segue for the latest from Jason at Hull Financial Planning.

We’ve spoken time and again – in fact, we wrote a book on the topic – about how you should focus on your net worth rather than your income. Jason takes it one step further, arguing that even a focus on net worth can be detrimental. To paraphrase Jason, if you measure daily changes in your net worth, you’re going to be happy twice and disappointed 29 times every month.

And we’re done. Thanks again for coming, and we’ll see you tomorrow.

Related posts:

1. Us 1, American Express 0
2. Carnival of Wealth, Trent Hamm Is A Charlatan Edition
3. Carnival of Wealth, Tax Day Edition

Don’t! It’s a trick!

It’s a phenomenon we’ll never understand. People turning down free money.

A few years ago CYC bought a modest rental home in a great locale. (The very definition of a smart investment, if we do say so ourselves. No wait, an emergency fund would have been a way better idea.) The price was nothing extraordinary, and the financing terms were agreeable, so we pulled the trigger. The house sits on the Pacific Ocean, there are toucans in the trees and yellowfin grouper in the water, and renting the place out has been easy. We can keep the rental rate low enough that we can garner lots of business while having the renters cover our expenses and then some.

It’s not purely passive income, in that there’s more to owning the place than just watching the checks roll in, but it’s close. We have to advertise the house’s existence, rather than just rely on travelers Googling it and hoping for the best.

A few months ago we were approached by a resale company, for lack of a better descriptor. This company would buy a series of dates from us (for a discount, of course), then resell the room nights. We’d never have to worry about refunding security deposits, or emailing our guests directions from the airport, or explaining the meaning of Spanish street signs ever again.

So…earn a few dollars less in revenue per night, while doing far less work than before? What’s not to love about that? As Paula Pant says, money is for buying time, not stuff. We’d be essentially spending some dollars to free up lots of hours that we can enjoy as we see fit. Greatest idea ever, as far as we’re concerned, and once you get a taste of liberty it’s hard not to want to share it.

The problem, and it’s a good one to have, is that the resale company is extremely good at what it does. It has more business than it knows what to do with. So much so, that it wanted to offer the same deal to other homeowners in our community of 20 or so houses. These are all vacation homes, by the way. None of the owners live on the premises. In fact, none of the owners even live in the country.

So we told them about the opportunity. Yes, there was a finder’s fee in it for us, but that’s not the point. Of the 19 homeowners, only 7 bothered to respond. And of those, 7 out of 7 gave a variation on the same sentiment: “Thanks, but we’d prefer to rent the place out ourselves. We can get more for it that way. Why would we pay what’s essentially a commission to someone else if we didn’t have to?”

We looked. All 7 advertise their houses for rent on the same website, which happens to list the dates that each of those houses is available for rent. The calendar we saw is an ocean of unsold nights. These dummies each have a valuable investment with a huge propensity for comfortable cash flow, and none of them are taking advantage of it.

We tried dialing into their shared universal desire for profit. “Come on. It’s money for nothing.” Still, they weren’t interested. We explained that there was no downside to signing with this company. The contracts are flexible, the company is licensed and bonded, and, oh yeah, the company guarantees the nights it buys. Maybe they sell them to travelers, maybe they don’t, but once we sell to them it’s no longer our concern.

When you appeal to someone’s emotion, you expect them to be wary. But when you appeal to their sense of reason and they still don’t bite, the rational response is to start acting irrationally. Why don’t you want this money? Would you rather get $100 a night for 30 nights next month, or $120 a night for 2 nights? Is this even a question? Why aren’t you answering it? Why do you hate money so much? Why are you forcing us to write in questions instead of statements?

So we gave up. We’ll forgo the finder’s fee and try to make use of the extra hours that have now fallen into our laps. Is there a moral here? None that we could find, unless it was to keep fortune (in both senses of the word) to oneself instead of trying to spread the wealth and watch it grow. Even if you don’t yet own a vacation property, you can still apply this to your own life. Understand that sometimes, people will refuse to capitalize on the most obvious of opportunities. Even if they see you taking advantage of it and basking in its rewards.

Most importantly, resist the temptation to second-guess yourself. We’ll admit, there was a split-second when we thought, “Are we the fools here?” But no, the money was indeed flowing to us and not to anyone else. Once again, thank God for the obtuse and the insufficiently ambitious. It sure makes life easier for the rest of us.

Related posts:

1. $100 Bill, Y’All

Slumping, but still smooth.

This is Eugenio Velez. He’s a utilityman for the Buffalo Bisons*, the AAA affiliate of the Toronto Blue Jays. (He joined Buffalo only a couple of weeks ago, and we couldn’t find a picture of him in his Bisons digs.) Velez played for the San Francisco Giants for 4 years before joining the Los Angeles Dodgers for the 2011 season, and ended that year by stretching his streak of hitless at-bats to a major league record 46. He’s been in the minors ever since. Hopefully his slump will end one day, as ours does now. Presenting our first good Carnival of Wealth in quite some time. All it takes is one hit.

Home run, out of the gate. From Paula Pant at Afford Anything. Paula introduces us to the Diderot Effect, observing that a shiny new toy can be more trouble than it’s worth once you buy all its requisite accessories. Those adjustable digital-fit mudflaps won’t do unless you have a Mercedes-Benz G63 AMG to put them on.

PKamp3 at DQYDJ.net goes back-to-back. A dozen more like these two and we’d rule the world. He shows us the very real but rare phenomenon of lotteries with a positive expected value, which would seem to contradict the very purpose of holding a lottery. Of course, there’s more to determining whether a lottery is worth playing than adding up all the possible ticket combinations, dividing into the total of possible prizes, and coming up with a quotient > 1. You need to read this.

If you want to give to a charity but don’t know if it’s bogus, Lynn at Wallet Blog tells you how to determine a charity’s authenticity. If you then want to give to a legitimate charity but can’t decide which one, do like us and cut these folks a check.

A new entrant, James Powell at Tax Credits.net. If you live in the UK and want to know how the latest round of tax changes will affect you, James has some surprisingly candid answers from the Chancellor’s office. Even though Lady Thatcher’s dead, chances to suck at the public teat remain plentiful in the mother country.

A couple of weeks ago Darwin’s Money called Bitcoin the worst investment of all time. Harry Campbell at Your PF Pro isn’t convinced. He likes the idea of a non-traceable and non-governmental currency, but wonders if this particular one isn’t due for a bubble. (We’re more inclined to agree with Darwin, largely because Bitcoin’s founders aren’t exactly forthcoming.)

We’ve been saying for months years longer than we ever imagined that the double nadir of interest rates and home prices can’t last forever. In other words, there’s never been a better time in history to buy a house. Or houses. Ross Garner at Wallet Hub seconds that. We’ll ignore his use of the superfluous phrase “moving forward” moving forward.

Have an annuity and want a lump sum that’ll be nowhere near the time value of your money? Brad at Structured Settlement Quotes can’t wait to cut you a check for pennies on the dollar. But hey, you’ll have cash in hand and you’re now armed with PKamp3′s lottery strategy, so you can’t possibly lose. Shady businesspeople masquerading as bloggers, thanks for giving us the opportunity to bash your services week in and week out. Promise us you’ll always be there for us to make fun of.

“Give people incentive to produce by adopting a diagonal income tax system (universal flat deduction, universally applied fixed percentage on the rest.)” That’s our answer to John Kiernan at Card Hub, who asked several experts “What one policy change would you make to fix the federal deficit?” Not sure why he left us out. WARNING: This post contains a photo of Alice Rivlin.

Bryan Chau at Success Pen Pal wrote a bunch of words in a tiny font about critical thinking.

Speaking of critical thinking, that sentence shows the shortcomings of English syntax. Obviously the font wasn’t about critical thinking, so how to rearrange the sentence? “…wrote a bunch of words about critical thinking in a tiny font”? No, that has pretty much the same problem as the previous version. How about “…wrote, in a tiny font, a bunch of words about critical thinking”? Technically that one will do, but we were trying to put the spotlight on the length of the piece. That last version buries it after the secondary feature, the size of Bryan’s font. We’re putting Bryan on notice, because he’s getting close to Peter J. Buscemi territory:

[I]t is vital that people effectively analyze and evaluate data prior to finalizing on any decision.  Through critical thinking and the efficient filtering of data, people could quickly determine if certain hypotheses are accurate, thus aiding in the decision-making process.  This in turn would assist critical thinkers in enormous ways because they would be less likely to be manipulated because of the ability to think more independently based on the facts gathered.

In addition, critical thinking helps to enhance the rationality of decisions by raising the pattern of decision-making to the level of conscious and deliberate choice.  By putting more time and thought into the decision-making process, critical thinkers consistently reflect on their thought process, thus making better decisions.

Looks like someone has an 8th-grade book report due on “critical thinking” and is still a few hundred words short.

Another one on taxes in the UK? From TaxFix, David de Souza shows one of the many differences between disclosure customs in Great Britain & Northern Ireland, and those in the United States. Some Members of Parliament don’t want their tax records made public, leaving open the question of why those MPs chose such careers in the first place. Our suggestion, making the House of Commons a volunteer organization (and the House of Representatives too, for that matter) has yet to be tabled.

How to allocate your assets in retirement? Michael at Financial Ramblings says there are psychological and financial factors to consider, and (alas) he listed them in that sequence. Forget about mindlessly adopting the 80/20 rule and be rational. Michael admits to being able to tolerate more risk than most people, a characteristic that goes hand-in-hand with his own financial success. He also uses the phrase “deplete my ‘human capital,’” which is the most depressing euphemism for aging that we’ve ever heard.

We’ve said it before. It’s almost all we ever say, in varying ways. Emotions have no place in personal finance. Save them for your relationships instead. Darwin’s Money rejects the very concept of a “dream home”. If it’s the subject of your dreams, chances are pretty good that you’re not concerned with whether it’ll impoverish you or not. Darwin wrote a sentence that we were all set to challenge, but on 2nd reading it kind of makes sense:

In most [real estate] transactions, someone gets really screwed – either the buyer or seller.

No! Capitalism is all about reaching mutually agreeable deals that benefit both parties. Otherwise they’d never make the deal, right?

Sure they would, if one party is thinking with its heart instead of its head. Someone, in real estate transactions usually the buyer, gets attached to the deal and loses (or never had any) interest in how to negotiate. Again, look at each transaction from the other party’s perspective. Only when you’ve done that should you imagine watching your kids play in the back yard, having your neighbors come over for barbecues, and borrowing a few thousand more from the lender.

Jason of Hull Financial Planning is funny, erudite, conscientious, and generous in his application of pro wrestling analogies. He also speaks fluent German. Bookmark his site, but before you do make sure you read how he changed his mind on reverse mortgages. Borrowing against the equity in your home so you can buy heart medication? It might make sense, depending on how much longer you’ve got on this planet. Bonus: includes a new euphemism for dying, “peeling the garlic.” Maybe it’s not new, but we’d never heard it before.

Andrew at 101 Centavos recommends that you step back before entering the dangerous world of retail for neophytes. Your dog bakery (excuse us, “barkery”) isn’t going to make you rich, or even solvent. If you insist on being a shopkeeper, ply your trade in something time-tested. Better yet, own the building and lease space to the merchants.

Finally, Dividend Growth Investor is one of our most consistent and thorough contributors. He (we’re assuming it’s a guy, because we’re sexist pigs) buys and holds, but not forever. What would propel him to ever sell a stock that pays him consistent and increasing income? Buyouts, overvaluation, and at least a couple more.

Thanks for reading. Same time tomorrow.

*The plural should be “Bison”. So should the name of the city itself, come to think of it.

Related posts:

1. Carnival of Wealth, Snow in Tucson Edition
2. Carnival of Wealth, Too Cute! Edition

No self-respecting straight man would go on camera like this. Fix your collar, Champ.

We’ll lay it out for you unambiguously.

You come here to learn about finance, right? If we’re doing our jobs right, you want to get some lasting knowledge about how to get rich, or at least avoid being poor, while cutting through the contradictory and facile advice available elsewhere.

But we’re just a humble little website, run by a couple of people with nary a CPA designation nor a professional degree between us. Why not read the big players instead – Barron’s, Yahoo!, Dow Jones & Company? They have greater resources and research budgets than we do. They have far bigger reach. They’re headquartered in New York, Silicon Valley and New York respectively. We’re on the outskirts of Las Vegas. Why waste your time here?

Because the “financial journalists” at the online arms of the above are incompetent. They make stuff up as they go along, to get glazed eyeballs to read shocking and counterintuitive headlines.

MarketWatch is part of the Dow Jones family, which publishes The Wall Street Journal. Thus through the parent company of all these entities, News Corporation, MarketWatch is a sibling or at least a cousin to Fox Business Network.

The sallow chap at the top of the page is Quentin Fottrell; homosexual* Irishman, MarketWatch columnist and incompetent hack. Last week he wrote, was tasked to write, had an editor beseech him to write or in any case thought it was a good idea to put together a piece with this headline:

Buy stocks when men buy socks. Socks and underwear sales may be an economic bellwether

We’ll give him a pass on the headline, because someone else probably wrote it, but the article itself is just as bad. It’s hard to pick representative quotes from the piece because it’s pretty uniform and fungible, but we’ll try:

American men’s apparel sales remained relatively flat in 2012, rising just 1%… The exceptions were the two garments some men continue to wear even after they’re falling apart: underwear, up 13%, and socks, up 12%. “Men are updating the basics of their wardrobe,” says Marshal Cohen, chief industry analyst at NPD.

If you want to get quoted by a rotten journalist, develop a flair for wordiness and grandiosity. All this time you thought you were buying socks, when in point of fact you were updating the basics of your wardrobe. One more thing. It wouldn’t be journalism without some perverse and unwarranted speculation:

And that may be a positive sign for consumer spending overall.

Because as socks and underwear spending goes, so goes the economy? That’s the kind of chaotic allegation that’s almost too easy to disprove. The idiot author himself, 4 lines earlier, stated that the (alleged very alleged) sock-and-underwear uptick isn’t even enough to stimulate spending in the clothing sector, let alone make a perceptible difference in the economy at large.

Okay, we’ve got

• baseless allegation
• overblown quote

What’s next? Of course. Obligatory academic, one with enough time to answer a media request because her field of study isn’t what you’d call intellectually demanding:

“Some men’s underwear may be so worn out that they have no choice but to replace it — or to go commando,” says Vicki Morwitz, a professor of marketing at New York University. “For men who don’t care so much about underwear, during lean times, they probably made do with what they had.”

Now another quote, this one from a sad little attorney who created a vanity website during the Clinton Administration and hasn’t updated its look since:

“With the economy improving, it must be the right time for men to get rid of all that holey underwear,” says Edgar Dworsky, founder of ConsumerWorld.org.

That looks like fun! Mind if we try?

“With Hanes selling briefs for a dollar-freaking-42 apiece, men will replace their underwear regardless of national economic conditions. Also, everyone who contributed to this embarrassment of an article deserved to have Kermit Gosnell stick a scalpel in their spinal cords and twist,” says Greg McFarlane, founder of ControlYourCash.com.

If you think the connection between underwear sales and gross domestic product is tenuous, wait till you see what Quentin Fottrell’s next argument is. He thinks, or writes as if he thinks, that increased underwear sales lead to…more men buying memberships at dating sites. Because they feel confident in their new boxer briefs. We’re not joking:

“When men start to gain confidence, they do go out more and date more,” says Z. John Zhang, professor of marketing at The Wharton School at the University of Pennsylvania. Romantic entanglements — as measured by online dating sites — have indeed seen an increase. The industry is now worth about $1.2 billion, up 4% from a year ago, according to research firm IbisWorld.

It’s a double-fecal column! Two marketing professor quotes, and dubious data points from two research firms! Unfortunately Fottrell stops before trying to determine how much of that 4% is attributable to the original phenomenon, men putting something between their skin and their pants.

Will Fottrell take this to a third level of absurdity? How about…another sign of economic recovery is that spending on divorce lawyers is up by (arbitrary percentage) because of wives catching their newly confident and securely boxered husbands on AshleyMadison.com? Does that work?

Now yet another brainless quote (the last one, we swear) from another quasi-intellectual:

Many men made undergarment purchases at off-price retailers and online, while fewer shopped at national chains…[This is] still a good sign, says consumer psychologist Adam Ferrier. “Post-recession, we are told the economy is improving and that people are spending again,” he says. “The first to go — items like men’s underwear — is often the first back on the shopping list.”

The first to go? Men stopped buying underwear, and now they’re collectively finding the $10 for a 7-pack that they couldn’t afford before? Fottrell can’t be dumb enough to believe his own lies. He just can’t. The entire purpose of this article was an excuse to show pictures of shirtless models and stock photos of men’s nether regions covered by novelty briefs with lipstick impressions on them. (We told you Fottrell’s homosexuality was relevant.)

“It doesn’t hurt for men to see ads with David Beckham, Mario Lopez and Tim Tebow,” Morwtiz (sic) says.

She’s got a point. If a 90%-naked pro athlete doesn’t motivate people to buy, nothing will:

There’s more. There’s always more:

[R]ecent studies suggest men are more likely to buy eye gel, moisturizer, and other “metrosexual” products online.

Oh, for God’s sake. You’re already out of the closet, Quentin. What else is there? Spare us the residual anger directed at your father for forcing you to take boxing lessons while your more liberally parented friends were learning how to stepdance in the adjacent studio. Write Dad a letter instead.

As always, there’s a lesson to be learned here. Folks, do yourselves a favor and stay the hell away from the financial media. You will learn nothing, and that’s on a good day. On a bad day you’ll have your precious time wasted by trash like this. Underwear as economic stimulus. Good God. Just learn a few fundamentals. Buy assets, sell liabilities, look at each transaction from the other party’s perspective, don’t incur student loan debt, eliminate rather than tone down your money-sucking bad habits, and buy our book. Was that so hard?

*Relevant because he talks about it a lot and uses it as his stock-in-trade. We wouldn’t mention Matthew Berry without referring to him as a fantasy sports dork. This is the same thing. People who define themselves by their unconventional sexual predispositions are no more sufferable than people who can’t shut up about their imaginary baseball teams.

Related posts:

1. Financial Retard of the Month
2. Financial Retard of the Month: The Simple Dollar Does It Again
3. September’s Financial Retard of the Month