Evan at My Journey To Millions shared June 2012 Net Worth Update My First Negative Month! and a Housing Update.  With the Dow down 6% in May, it’s no surprise Evan saw a drop as well, but with his strong savings, he was only down 1/2%, not bad. I track the S&P and haven’t yet calculated the carnage.

At Girls Just Wanna Have Funds, Ginger explains Soft Credit Pull vs. Hard Credit Pull: How Do They Affect My Credit? I’ve written quite a bit on credit scoring and how I use Credit Karma to track my score, but I’ve not gone into detail on soft vs hard pulls of your report. Great reading, Ginger.

Bible Money Matters hosted David Bakke’s guest post Why You Should Know The Operating Expenses Of Your Employer-Based 401(k) Plan. I could not agree more. Some 401(k) accounts sport fees so high the tax benefit is wiped out over the years by those fees. The new disclosure rules are due to go into effect soon. We’ll see the fallout soon after.

Darrow Kirkpatrick Guest Posted at Lazy Man and Money with The 80/20 Way to Early Retirement. Darrow explains, “The 80/20 rule is about causes and effects: it tells us that just 20 percent of the effort in any endeavor produces 80 percent of the results.” He then goes on to show how this important rule can be applied to how you invest for retirement.

Let’s wrap up this week with the Mighty Bargain Hunter’s A neat way to see the interest you save by paying extra principal. I don’t want to ruin his punchline, let’s just say he gives a great visual way to see how prepaying puts you ahead. A simple idea, but it explains an awful lot about how mortgages and amortization works, nice post.

New York’s Mayor Bloomberg would like to pass a law banning the sale of cups of soda larger than 16oz. “Nobody is taking away any of your rights,” Bloomberg said, “This way, we’re just telling you ‘That’s a lot of soda.’” There’s so much wrong with this it’s tough to know where to start. I’m not a soda drinker, and I understand it’s not a healthy drink, but is it the State’s place to put this kind of restriction on the sale of legal food or drink? Should the sale of double cheese burgers be restricted? How about that deep fried blooming onion? Where does it end?

What assumptions are tacit in the statement that “saving and properly investing 15% of one’s income over a lifetime is a pathway to a successful retirement?”

By this, I mean items along the lines of:

• Single, married, or single and dating at time of retirement?
• Retire at 55, 60, 65, 80?
• 25K/yr income, 50K/yr income, 150K/yr income?
• That 15% goes to a tax advantaged account? (i.e. 401k, IRA, Roth, your nephew’s 529?)
• Kids or no kids?
• Paying for said kids’ college or not paying?
• 2003 to 2007 returns, 2008 to 2009 returns, or “I averaged the whole S&P500 over 2 world wars and order of magnitude technology advances” returns?
• Dual incomes the whole time?
• Making a lot more money at time of retirement, or making about the same money as early to mid career at or about the time of retirement?
• Renting a house the whole time, or owning a house as early as possible?
• Obscene ROR’s on that house, or assuming it loses money?
• Your expenses go down at retirement, stay the same, or go up?
• Medicare exists? Social security exists? Tax rates go up, down, stay the same?
• You’ll never get laid off, you might get laid off, you get laid off often?
• Family helps you out with major purchases, or does not?
• No, big, or modest inheritance?
• Live in a cheap area, or live in a “statistically average for costs, land, CPI, wages” area of the US?
• Taxes go up, taxes go down, taxes stay about the same?
• Leaving a nest egg when you die? Or, dying broke?
• Living to the statistical average age of men and women in the US, or, living to be 101.2?
• Inflation under control? Inflation to the moon? Has it considered deleveraging and deflation?
• State with an income tax? Or only a state with sales tax?

The truth is that no answer could really address this list. 22 items to consider, each of which might greatly impact the money you’ll need to retire in the manner you’d like. In general, I think many people will prefer a downsize, if they hadn’t done it soon after the kids took off for college. In which case, money for housing expenses might drop and can be used for travel or other things that the retiree might want to do.

What do you think of this list? What’s missing? Is it possible to plan for every variable decades away or does the picture only get clear as retirement gets closer?

Next, at My Broken Coin, Aloysa explains Why I Took Out a 401K Loan. She offers some good logic and acknowledges that it’s not recommended by most advisors. Me, I think they need to fix the 401(k) loan once and for all. Finance is pretty convoluted in the first place, the crazy rules of what happens if you leave your company while a loan is in place doesn’t help matters. Nor doesn’t owing money at 18% when you can borrow at 4%.

The Wealthy Turtle shared 5 Money Leaks That Are Draining Your Wallet. It’s actually a rebuttal to Farnoosh Torabi’s 5 messy money mistakes, in which Mike agrees with a couple of her points, and disagrees with others. The key thing is – What are your money leaks?

Canadian Finance Blog posted Income Inequality and Financial Engineers, a nice piece on the increasing imbalance of wealth.

And last, before the Memorial Day Barbeque has to get fired up, Robb Engen explains Why tracking your spending makes sense. I’m a believer in Robb’s approach. Tracking spending to the penny for a period of time (I suggest a year) will help you understand where you spend, but more important, where you spend too much. For some, that one year is enough to get on track, for others, this exercise is one to keep up indefinitely.

Safe and Healthy Memorial Day to all.

Photo Credit: Gone But Not Forgotten Groceries

Jeff at Deliver Away Debt talked about Emergency Credit Cards, asking Is a credit card necessary for emergency purposes? For those in the debt payoff mode, Jeff’s answer was a strong “no.” And I agree. Jeff has done a remarkable job paying off his own debt and documented much of his progress at his blog. An inspiring story.

Boomer wrote How To Pay Off Your Mortgage Faster. If that’s your desire, go for it, but for reasons I put in my comments at Boomer and Echo, I’d avoid the Bi-Weekly mortgage.

From the department of really stupid tax mistakes, Joe Kristan posted Million dollar mortgages: when division = subtraction. A great warning about how choosing the wrong filing (joint vs marries filing separately) status can cost you dearly.

Generation X Finance article How Bartering and Trading Helps You Make Money and Help the Environment really intrigued me. There was no talk of tax consequences. As I understand it, the trades mentioned, even trading clothes for other clothes, is considered a taxable barter transaction. Hmm, I wonder if anyone will add a comment or question about that at Gen X.

And to wrap up this week, Hank Coleman wrote Being Too Frugal Can End Up Costing You Money. He offers instances of taking frugality too far, which really bring the point home. Good examples of when you don’t want to be that guy.

The current crop of graduates are in for a double whammy, a low employment rate for new grads, and the debt load accumulated during their schooling. I envy their youth, but the the job market they are entering.

Frugal Zeitgeist posted that the Top 1% Keep Getting Richer. I don’t doubt that. Under median income (about $50K for a family) saving is very difficult, and income is all from wages. Someone already worth tens of millions of dollars isn’t likely to be a W2 employee. They are making money from their wealth. “The rich get richer” is hardly a new phrase, it’s been true for a long time now.

Jeremy Vohwinkle at Generation X Finance answers the question My Employer Stopped Matching My 401k – Should I Still Contribute? An excellent analysis of this issue, and with so many companies reducing or eliminating the 401(k) match, it’s something many need to think about.

Getting back to basics, Green Panda asked Do You Balance Your Checkbook? It seems that many of his friends who don’t are paying overdraft fees that are adding up. Jane and I are paid every two weeks, and we don’t balance to a mailed statement, we balance with every check. The deposit goes in, and we quickly look at the balance the bank says we have, subtract the checks that haven’t cleared, and the numbers match. Right then, we look to see what bill will auto-pay before the next paycheck and make sure they’re covered. It’s actually faster and easier than it sounds.

And to wrap the week up, 6 Ways College Grads Can Save On Their First Apartment, a guest post at Planting Money Seeds. I’ll admit, I’m a sucker for a good list, and if you’re a recent grad or about to be, this is a list worth reading.

In the United States we celebrate Mother’s Day tomorrow. In Mexico, it was celebrated yesterday, pretty cool to have it fall during the week, I’d day. There was a time that the true test of the local phone companies was whether they could handle the traffic on Mother’s Day, as this is the highest phone use day of the year. Happy Mother’s Day to all the mom’s who are reading.

The larger issue for the poorest of this world is the lack of clean drinking water. Authors Peter Diamandis and Steven Kotler describe the large number of person-hours spent each day simply fetching water which isn’t always of good drinking quality. Dean Kamen, inventor of the Segway is currently working on a water purification device which can be powered from virtually any source of power and will produce 250 gallons of water per day, enough for 100 people. His target cost for this machine is sub $2000.  Even if you focus on the fact that the target market for these machines are making less than $10 per week, this one time expense of $20 per person will free up many hours of family time from the whole water fetching process. Add more of these systems and the issue of clean water for one’s crops start to be a non-issue.

The other technology that holds great promise continues to be solar power. For the parts of the world where there is no “grid,” it’s possible there may never be one. Just as there are parts of the world that skipped right over providing phone lines all over the place, instead just putting up cell towers, solar may be the next step in bringing electricity to the world. Where burning kerosene lamps is expensive, dangerous, and unhealthy, solar power can charge storage cells to extend the daylight into early evening, provide power for computers, and bring up the education level of the world’s poor. There is a direct correlation between improvements in education and health and the reduction in overpopulation. This book makes a great case for the potential to wipe out the pervasive global poverty within the next two generations.

Abundance runs 240 pages, and then another 100 of notes and references. It does an interesting job of projecting based on current science and the rate of progress we are experiencing. It borrows from, and complements my recolewction of Ray Kurzwell’s The Singularity is Near, another good read.