I do a lot of reading of other personal finance blogs, and while I share them occasionally in my “Best of the Rest” round-ups, I want to give some shout outs to those who have been consistent commenters and let you get to know them a bit better. Hopefully this will become a regular thing.

Up first in the Interview Series is Monevator, a UK based blogger who gives motivation to armchair investors.

Why did you start a blog? Why Personal Finance?

I guess I started a personal finance blog because if I didn’t, my friends and my then-girlfriend would have killed me for boring them to tears. I’m a bit like Buffett — without quite so many billions! Sure I have other interests — Buffett has steak and coke, too — but the first pages I read of the newspapers are the business pages, the only bulletin boards I’ve ever contributed to are personal finance and investing ones, and so on.

So there was that — it’s 100% my passion, there’s no faking and I probably should have done it for a career (except I hate 9-5 employment! I’m now totally freelance, which pays a bit better too, at the cost of career progression).

I would say that my passion applies most to growing your net worth and achieving financial freedom through small business ideas, passive income and investing. I’m not really a save your coupons kind of guy. I’m naturally very frugal (I’ve saved over 50% of my salary some years, though I was fortunate to earn enough then to do so I concede) but there are other blogs who’ve already got that angle covered.

A bit like the title of Sweating the Big Stuff, I’m more interested in the big picture story. What are you doing about your income? How will you grow it? Where should you invest it? And what’s the end goal?

What is the most important personal finance lesson you have learned?

I’d like to tell you it’s to trust yourself and don’t listen to experts. I was well over 90% invested by the March 2009 lows, despite all the gloomy talk from bloggers and the mainstream media alike. Once I ran out of cash, bonds, REITs and so on to sell to buy stocks, I started selling my real world possessions to try and put more money into the market. (This isn’t including my emergency fund, which is larger than normal because I’m self employed, and which everyone should have and consider sacrosanct).

I didn’t know the market would go up anytime soon – you can never know that. But I did judge it would do someday… stocks were just too cheap, and everyone was panicking like it was Doomsday. (If the worst predictions had come true, cash would have been worthless anyway!)

So I’d like to tell you that. However my main lesson was not buying a house between 1999 and 2004. At first I could have bought something useful, but I wanted an amazing house at a bargain price. Later I thought (after 100% or so more rises in here in London) that prices were out of whack with rents, salaries and so on, so I didn’t buy again. To buy somewhere I could live for say five years would cost me at least £400,000 ($600,000) now. That prevarication probably cost me at least £200,000 ($300,000, or more like $400,000 on the £/$ rate then!) in lost equity that I would have still gain, even after the price falls in 2008.

That’s the most painful lesson — I’m not that smart. (Of course I’m not buying now. So I’ve still not learned!)

What does financial freedom mean to you?

My father paid a fortune into company pensions (well, a fortune for him, relative to his income) and did all the right things, but was stuck in a job he couldn’t leave to access that money for another 4-5 years…this when he had a life-threatening disease lurking in the background waiting to kill him.

I hated that he couldn’t get out, and vowed to be in charge of my own destiny.
Eventually he did retire 12 months early, but a couple of years later he had a massive heart attack and currently suffers all sorts of disabilities and is essentially housebound and in permanent care. I’d guess he got to use about 3 years of that pension money he put away while he was healthy, although my mum benefits, too.

So now I want to be financial free to do what I want, which likely will always involve some work, but will increasingly NOT involve anything I don’t want to do. The aim is to have a big – ahem – ’screw you’ fund so I can choose to do what I like, and I don’t have to be *allowed* to have access to my money.

What was first personal finance memory?

My first memory is of making pizzas and selling them to my parents for a few pennies. Not much money, but I used their ingredients so I made a healthy profit!

What is your favorite thing about the Yakezie group?

Going up in the Alexa rankings! Seriously, I get a buzz out of it. But a very close second is getting a focus on which of the dozens of personal finance blogs to hone in on, and meeting people (in virtual terms) such as yourself, Sam, Ryan, Neal Frankle, MoneyFunk, and many, many more. I’m not a very sociable blogger, I just like to write really, and I needed to work more on the community side of things. This has helped a lot.

If you could go back and tell your 20 year old self one thing, what would it be?

I’d tell myself having long hair and listening to alternative music while hanging around with my beautiful girlfriend back then was all very well, but in 2-3 years I’d start working and realize that socialism was a charming idea that doesn’t work in the real world because people are inherently lazy and selfish.

I was born a capitalist but I went through that left-wing phase and unfortunately it was when I might have made some more investing-related career choices. Instead I’ve had a very fun and laid back career, but it’s not been as financially rewarding as it might have been, and seeing as I think about stocks 8 hours of the day to be paid for it would have been a bonus!

It was poor timing, but I don’t really regret it. As we say here in the UK: “If you’re not a communist when you’re 20, you haven’t got a heart, and if you’re not a capitalist by the time you’re 30, you haven’t got a head!”

What are your two favorite posts?

My first is this post about replacing your salary with income from investments over time. I think it’s a much more sensible long-term goal for most people than worrying about fluctuating net worth. Income is usually much more stable, and if you want to live off it one day, it can be much more tax efficient to build your investment portfolio that way from day one.

My second choice is a long and self-indulgent one about my father, which puts what I’ve said above into more context. I’m going to pick it because Google doesn’t understand it and so never ever sends anyone to it, and if you’ve got time I think it’s one of the better things I’ve written. It’s called Money Can’t Buy Me love.

Thanks for your great answers, it was a pleasure having you!

A Different Perspective on Pricing @ Eliminate the Muda

Yakezei Challenge Carnival @ Deliver Away Debt

A friend of mine, Josh, recently applied to job, had a positive interview, but ran into a problem with the paperwork. They wanted to run a credit check on him.

In college, Josh was a little irresponsible and racked up a fair amount of debt. Now he wants to repay it, but was worried that this employer would  disapprove of his past activity. The credit check was likely the deciding factor as he didn’t get the job and had to look elsewhere.

At least 16 states are now considering banning most employer credit checks, an act that will help give jobs to people who are trying to get out of debt. Josh was penalized for something that happened 5 years ago, and he has since changed his ways. Making the assumption that he is irresponsible and not letting him get a job adds insult to injury.

Unreasonable Conclusions

Another friend, Sally, had gone through a lengthy interview process, been offered a contract, and was ready to sign when she saw a strange non-compete clause. She didn’t understand why her administrative assistant job would require that, so she had her father, a lawyer, take it in to work and have a coworker who specialized in contract law take a look. He came back with a few concerns, which Sally relayed to her soon-to-be employer.

She received a call saying that the employment offer was being rescinded. My friend was confused why getting legal advice about the contract was a problem, but they explained that getting legal advice was fine, but going to her father for help was not and that it was a sign that she is too irresponsible to handle work without help from others. Whether that was the real reason or if the company had more of an issue with her not signing the clause we can’t be sure, but the employer’s assumption cost Sally a job.

They took a HUGE leap to come to the conclusion that she was unfit to work for them. Suddenly this 4.0 student with just about every award in the book isn’t responsible? It’s ridiculous that she would be penalized because of her father’s profession. Clearly this isn’t an employer anyone should actually want to work for, so it is probably best that she found out early on that this company is crazy.

Are employing making big leaps with these assumptions against my friends? Is it fair to discriminate against those who have had credit problems in the past and are now trying to make up for it?

Property Tax Deferral For Young Families A Good Idea? @ Canadian Finance Blog

Life Insurance Breakpoints @ Evolution Of Wealth

This is a guest post by Dani Parnass. She is a wanna be writer living in New York City. If you enjoy this post, please follow her on twitter.

It’s a funny thing, writing about budgeting and personal finance when you’re 23 years old, trying to live the fast life in an overpriced apartment in Manhattan on an assistant’s salary. But what seems to be an all too common case study in excessiveness can, oddly enough, be a practice in good prudence. Here are two lessons I’ve learned in my ongoing efforts to watch my wallet (which I probably should not have bought from Coach) and not break the bank (thanks Chase, for making me fight for that $125 signing bonus).

Lesson #1: There is such thing as a free lunch (or breakfast)

My dad gave me a simple piece of advice when I first started working and was learning to master the difficult task of eating well on a budget, two things that never really seemed to be an issue in college (for some reason, living off of cereal won’t get me through the day anymore).

When I moved in to said expensive apartment, I soon found out the building management offered free coffee, muffins and croissants for breakfast every morning. The skeptic in me eyed this display cautiously for a few weeks, confident they would hike up my rent with each scone. When it became apparent that wasn’t the case (it was probably built in, but I would have been paying it regardless), I started taking a muffin every once in a while. Since I’m not a huge fan of pastries though, I still continued my daily Dunkin Donuts run for breakfast.

On what has become a weekly rant to dad about my budgeting woes, I mentioned in passing that we have these free muffins every morning. “Really?” he asked incredulously. “And why exactly are you still buying breakfast?” “Well,” I responded, knowing full well I was about to lose this argument. “I’m just not so keen on muffins.” It didn’t take much for him to point out the obvious: “Yes, but free tastes a lot better.”

Needless to say, muffins are now a consistent part of my morning routine, and I’ve been happily reaping the benefits of saving $5 on breakfast every morning. It’s small, but five times a week for six months and counting goes a long way.

Lesson #2: There usually isn’t such thing as a free drink

Unfortunately for me, my apartment building doesn’t also give away free drinks. Even worse is that going out for drinks in the city is no where near as cheap as going out in, oh let’s say, College Park, MD. And while we’ve found some great places that offer 50 cent beers (who am I kidding, I don’t drink beer) or similar drink specials, it can be hard to kick back with some friends while trying to save money.

Enter gender-role stereotype number one (well two, if you count the beer): Guy offers to buy girl a drink at the bar, girl conducts cost-benefit analysis associated with this seemingly free drink. There are the more obvious repercussions that could result from taking a random drink from a stranger, but assuming you have some level of sensibility there are also more subtle costs. You’ve successfully impressed this guy with your witty banter but didn’t particularly enjoy his 10-minute monologue about why he loves that arbitrary sports team. So was it worth sitting through that entire forced social interaction, all for a free drink?

I’ve learned that you can’t win them all and a free muffin beats a free drink, at least under the aforementioned circumstance. So you can either feign interest in that suddenly fascinating sports team, or take the high road and feel good about reallocating those funds you saved from breakfast.

My goal until April 15th is to fully fund my 2009 Roth IRA. I’ve stoppped contributing to my employer plan and will be socking away as much as possible until I hit the $5,000 mark. It was going to be close because I happen to get paid of the 15th of April this year and didn’t want to leave it until the last minute, but the $800 in tax refunds I’ll be getting should put me over the top and help me reach the Roth IRA limit.

Blog Traffic

Another month of unsustainable growth has gone by an increase in traffic of 111% and the statistics continue to surprise me. I’m sure some of the progress is due to the Alexa Challenge, and as that page makes its rounds on other blogs, I hope many of the readers stay.

Samurai Alexa Ranking Challenge

It’s been awesome getting to know everyone and being part of an awesome community, and the results have been fantastic. Everyone is moving up, and in the past month, my rank rose from 441,611 to 142,090! How great is that?? I’m definitely starting to slow down, but I’ve reached the front page of the Wisebread rankings and now I’ll start to enjoy many of the other benefits of being a member of the Yakezie.

Favorites

Personal Finance 101

Pay Down Variable HELOC or Fixed Mortgage?

What the Credit Card Act Means for You

The True Cost of Coffee

The Best Deal I Ever Got

Guest Posts

FiscalGeek - Why I Don’t Use Zero Based Budgeting

About 5 months into my first credit card experience, I decided that it was time for a credit line increase. No, I wasn’t racking up debt and no, I didn’t have any large expenses that made the credit increase necessary. I wanted an increase because when you have $1,000 each month, it’s easy to have over a $2,000 balance right before the bill is due. With a credit limit of $5,000, that equals a 40% utilization rate, something I’d definitely prefer to stay below. Add in the fact that Bank of America mysteriously skipped a bill cycle and that rate jumps to around 60%.

Sure, it’s not always that high and only if my accounts are checked on those days would it be marked that high, but I’d like to avoid the worry altogether and assure myself that my credit rating is as good as can be. It’s not imperative now, but it’s always good to keep a good credit score.

We know that hard inquiries negatively affect your credit score, so I decided that while I wanted to increase my credit line, I wouldn’t do it if it meant a hard inquiry.

Also, I have great news. Bank of America has one redeeming quality: it makes increasing your credit line very easy.

After logging into my account, I clicked on the “Request a credit line increase” button, filled out the form, and requested another $2,500 in credit.

The next day, I received a call to verify my job, income, and reason for requesting an increase (I have heard that saying that you’ll be making some large purchases works well).

I was approved immediately with only a soft inquiry and suddenly my utilization rate dropped. That same 40% utilization rate suddenly turned into less than 27% on the worst days, something I can definitely accept.

It’s only a small part of my credit score, but every bit helps and good habits now will help when we need it.

When I started blogging in September, I knew it was a long-term project. I didn’t think I would make a huge amount of money, nor did I realize how much work it would be to maintain a blog and post 5-6 times a week for many months. So far, I’ve learned a lot of lessons from blogging, and this one shares a strong connection with personal finance, so I’d like to share it with you all.

Nothing Comes Easy and It Takes Time

When I started, I didn’t think at all about making money. I don’t have ads on the site, I don’t do sponsored posts, and I don’t get free stuff in return for positive reviews. Recently I found a few easy ways to make a small amount of money without loading the site with ads. If you tell most people that they have to work for 6 months for free and after that they’ll start getting paid a few cents per hour, they won’t dream about taking the job.

If any moneymaking idea was easy and took little effort or time, there would be a lot of very wealthy college students. But anything rewarding requires a lot of serious effort, and more people are turned off by that. If you’re able to set a goal and keep working until you reach it, the results will come. The results always come if you work hard enough.

Sometimes it takes a long time to be promoted, to make money off of a business venture, or to learn new skills. Still, the time and effort is worth it, whether you’re rewarded in skills that help get a new job in a field you’re really interested, a promotion to a position you deserve, or your first positive cash flow month for your business.

It takes a lot of time and effort to achieve your goals, but the effort if often rewarded. Put your mind and heart toward your goal, know that there are few easy paydays in life, and keep that original excitement and passion going hard until you reach it.

I love automatic processes and saving time on mundane activities. Excel helps me do that lal the time with its fancy functions and awesome macros. This week while I automated the standings for the Alexa Challenge in Google Spreadsheets, I learned two amazing functions that are currently competing for my favorite.

The first is ImportHtml, which pulls in data from the site of your choosing into a cell. It’s how I get the data automatically (using a today function).

The second is Sort, which allowed me to bring in the information I want while automatically sort the standings by any row I choose, in our case “Today’s Alexa Ranking.”

Just thought I’d share that. What’s your favorite Excel or Google Spreadsheet function?

Let’s start off this week by featuring a post by Own the Dollar on why Your Stockbroker May Not Be Your Friend. How do you feel about commission based brokers? I could never use one because, like Hank points out, they are discouraged from employing the buy and hold strategy.

In contrast, Evan at My Journey to Millions asks: Why Does Everyone Hate on Financial Planners? He highlights some of the reasons why we need financial planners and makes an excellent point that many people need advice and we can’t do what they do, so we should pay for their expertise.

Studenomics provides some Unconventional Personal Finance Advice. I love his ideas and the thought of earning money off of credit cards (while others are paying crazy fees) excites me!

Jim from Bargaineering tells us why Being Frugal is Foolish. My time is not worth much (I spend a few hours a day lounging around), but I do agree that spending your time improving yourself or finding a way to make more money is probably more lucrative than making your own detergent.

Finally, Five Cent Nickel goes through Visa Credit Card Acceptance Guidlines. Merchants are not allowed to set minimum purchase amounts and this drives me absolutely crazy. At the restaurant next door to my apartment, they insist you pay in cash, but it’s hard to argue with a worker who doesn’t care about merchant agreements.

This week, I was a part of the Carnival of Personal Finance hosted by J Money at Budgets are Sexy.

Finally, FiscalGeek let me guest post about my opinion on budgets in response to his pro zero based budgeting stance.

Think of a fun excel function or tool yet??

Whenever I have a money question, I go to Cash Commons. There, users ask and answer all sorts of questions in a very helpful way. When I received this question, it seemed like a matter of opinion, so I wanted to get a few views on what the best idea way, and more importantly, why.

Matt asks:

I have both a mortgage on our house, and a home equity line of credit. The mortgage rate is fixed (4.4.%) for 15 years. The home equity is variable, right now, it is only 2.24%. I am trying to accelerate payments beyond the minimum to get out of debt more quickly.

When the home equity rate is higher than the mortgage rate, it is a no-brainer – pay the minimum on the mortgage and throw any extra money into the home equity loan.

However, when the home equity loan is lower, like now, it is a little more tricky. It may seem obvious to pay the minimum on the home equity and pay off more of the higher interest mortgage. That would be the clear choice, if I could count on not needing to tap the home equity line down the road. But, what if I anticipate some large expenses down the road, for which I would need to borrow?

If my home equity is close to the ceiling, then I won’t be able to borrow against it when I need it. No matter how much I’ve paid off my mortgage, I can’t get more from that source if I need it. So, what’s the best strategy in this situation? (And, you can ignore the issue that as the home equity gets closer to the ceiling, that hurts my credit rating a little. For the current purposes, I don’t anticipate taking out any other loans, and I pay my credit cards off each month.)

After posting this question over at Cash Commons, I got some interesting opinions.

After breaking down the situation, Mighty Bargain Hunter was a proponent of building up cash reserves, then paying down the Home Equity Line of Credit (HELOC), then the mortgage. He argues that cash in the bank buys time, even if it costs a little in the short run and that the rate on the HELOC will eventually increase to a rate higher than the mortgage, making it worth it. I agree that the cost of building up cash is low (Matt would lose less than 1/2 a percent in interest if he chooses a savings account instead of the HELOC).

Dr. Dean agrees and says that rates will rise this year so the HELOC should be the biggest concern, and the more that is paid in the short-term, the less left over there will be when the rates increase considerably. Again, a good point, and he notes that what the market will do in 2010 is his main reason for his thinking.

My take is a little big different. It’s extremely hard to know what will happen in the next year in terms of the market. At some point, interest rates will rise, and when they do, some think they will rise to a high rate in a short period of time. Whether this happens in the next year, nobody knows for sure.

The uncertainty of the situation is what makes this question difficult. Right now, Matt can make larger payments on the mortgage and effectively “earn” 4.4% on his investment. Alternatively, he can pay down the HELOC, “earn” 2.4% in the short-term, and when the interest rates rise, ”earn” more. But when will the interest rates rise to 6 or 7%?

Since it’s impossible to know, I am a proponent of taking the guaranteed return after building up some cash reserves. That way, Matt can pay off a chunk of the HELOC when the interest rates rise while only “losing” 2.4% (4.4% on the mortgage – 2.% that he can earn with a savings account such as SmartyPig), and then earn that 4.4% by paying off the mortgage. In this scenario, he doesn’t take too much risk, spreads out his “investments” slightly, and knows what kind of return he is getting.

When the interest rates on the HELOC begin to rise, it may be time to switch to making payments there because once the markets improve (whenever that may be), they may rise quickly and it will make sense to pay that down as quickly as possible. But until then, my vote is to pay the mortgage and earn a guaranteed return on your investment rather than trying to time the market to come out slightly ahead.

When do you think interest rates will rise? Do you have other advice for Matt or a different reason than the ones outlined above? Let me know in the comments!

I hope all of you read Financial Samurai’s post yesterday. I figured since the point of this challenge is to encourage each other and to grow as a group, not just individually, we should be spreading the love around more. I think that if we make the Alexa Rankings Challenge page a traveling page that can switch hands every two weeks and give lots of people a chance to host, we would be better off as a group. I’ve gotten a nice bump because of it and you will too! And who knows, maybe 6 months won’t be enough and we’ll want to continue the effort!

The time commitment is actually very small, especially because I spent several hours this week automating (almost) the entire process. Now, the rankings update automatically in the spreadsheet, and the work required is minimal (less than 30 seconds a day!) The big reason to automate is so that we can get daily updates, which aren’t delayed!

Once you are done hosting, your responsibilities don’t end there. After your week, you should take down the rankings but leave the page up with a link to the following week’s page.

Thanks everyone for your wonderful ideas and critiques. I love the feedback and I think we’ve made some nice improvements over the past week. I’ll keep it here for the next week until we see that everything is working smoothly and then we’ll start getting this page on a bunch of other blogs!

Also, congratulations to Planting Dollars on landing in the top 100 on Wisebread’s list! You’re motivation to the rest of us to keep going. Fiscal Fizzle, Monevator, MBA Briefs, and I are right behind!

If you’d like to host, shoot me an email: DanielPacker@SweatingtheBigStuff.com and I’ll explain the process in a little more detail. Thanks!

Yesterday marked the implementation of the Credit Card Act, which was designed to protect consumers in several ways from taking on too much debt and being charged exorbitant fees.

We’ve seen several changes happen over the past few months, including higher interest rates on credit cards and fewer 0% interest cards. Also, there have been reports that more cards will come with annual fees.

So what does all of this mean to you? What effect will this have on regular consumers? Let’s investigate several types of consumers and see which changes will affect them most:

The Student

In a Sallie Mae study, research revealed that the average undergraduate student carried $3,173 in credit card debt in 2008, with projects that the amount of credit card debt would increase in 2009.

As a response, the Credit Card Act makes it harder for students who are likely to be irresponsible with their credit line to obtain credit cards. The new law requires a co-signer for anyone under the age of 21, unless they can prove they have a job and can make payments without a co-signer.

Also, offering free gifts as a way of attracting college students to sign up for credit cards is banned within 1,000 feet of campus. Hilarious, but it actually works as I’ve seen lines form next to tables at football games where the reward is a free extremely expensive t-shirt.

Digging Out of Debt

For those who have debt and committed to getting out, there is lots of good news. In the old system, credit card issuers applied payments to the debt with the lowest interest rate, thereby increasing the total amount of interest paid over the longest possible period of time.

In the new system, the principle payment is applied to the debt with the highest interest rate. For those with balances of different interest rates, it means it will be possible to pay off the balance a little faster and with fewer interest charges.

More good news for those getting back on track is that credit card companies can only apply interest rate changes on new balances. The old system allowed them to hike up interest rates on your old balances as well, but now as long as you are not 60 days delinquent on your account, this can’t be done. So as long as you stay current, your old balances won’t be charged more.

Head In The Clouds

For those who are near their credit limits and who keep charging expenses on their card, there is good news and bad news. The bad news is that you have been paying $39 or more for each transaction that is over the limit. The good news is that credit card companies will have to get your permission to continue doing this.

If you think that $40 sweater is worth $79 (plus interest on the $39), then go ahead and opt in. But if you don’t, being cut off and having your card denied could be very embarrassing. For this group, I don’t see this as a solution, just a way of limiting just how much trouble someone can get into.