Free By 50

Best of Blogs for Week of May 17th

2013-05-17T17:45:00.000-07:00

The Big Picture discusses the impact that 'to big to fail' has on the credit ratings for the big banks with Advantage: TBTF

MyMoneyBlog lists the Top 10 Frugal Fruits: Which Fruits Offer the Most Nutritional Value Per Dollar?

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4 Reasons You Shouldn't Move Home After College

2013-05-17T08:32:00.000-07:00

This guest post was written by Jon Haver at PayMyStudentLoans.com who writes about how to get out of student loan debt quickly.

College is expensive. Graduating from college prepares you for job opportunities, but the trade off is that it also leaves you in a great deal of debt. Paying off those student loans is no easy task. The millions of people who are behind on their student loan payments will agree. If you are one of those people who struggles with making ends meet and pay off those student loans, you might be considering all of your options when it comes to saving money. One option you might be considering is moving back in with Mom and Dad.

Home is supposed to be where the heart is. Unfortunately, heart is not enough to save money and pay off student loans. Here is why moving back home after college may not be such a good idea.

ONE - Home might not be where the best job market is

You paid a lot of money to gain skills in college, and now it is time to put them to use. Finding a good job based on those skills should be a top priority. Do some research, and you’ll find that some areas of the country do have booming job markets. If your parents do not live in one of these areas, then moving back home limits your opportunities to land your dream job.

TWO - Income-based repayment options

The standard repayment plan for federal student loans is not the only option. If you need to save money, talk to your lender about ways to manage your monthly student loan payments. Graduated plans and income-based plans are available. While it may take you longer to pay your student loans off with these other plans, it is something to consider if you need to save some money. Before applying for any forgiveness program it is always a good idea to check your credit score, Jim writes about how to check you credit score for free – here.

THREE - Other money saving options

There are other things you can do before you decide to move back into your parents’ house. Take a close look at your monthly budget and decide if there are any ways to trim down excess expenses. Once you have that budget, be sure you stick to it. Avoiding consumer debt such as credit cards will make the monthly bills manageable. If you have spare time on the weekend or during the evenings, pick up a second job to bring in a little extra income.

FOUR - Moving home can be a psychological strain

The psychological effects can do more harm than good if you decide to move back home. Your parents raised you in anticipation that someday you will have the ability to strike out on your own. Just because they are older in life and have paid off the house doesn’t mean its free for you to live there – The True Cost of Home Maintenance. If you make the decision to move back home, both you and your parents will be wondering if you can make it at all. Reaching adulthood should be a time when you’re exploring all of your new freedoms independently. Living with parents will set restrictions on that independence. Just being in your old bedroom is enough to make you feel like a child all over again. How can you become financially independent if you still feel like a child?

They might not be able to fully support you. Remember that your parents have their own financial goals and needs. Supporting you for a few more years might not have been in their plans and it could put a strain on them.

Being on your own after college is certainly difficult. You can eventually become independent with a well-planned budget, some frugality, and time. Other people have managed, and so can you.

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Free Giveaway Contest Ends Tomorrow

2013-05-16T14:52:00.000-07:00

Just wanted to remind folks that I'm giving away some free macaroons courtesy of Sucré.

If you haven't entered yet the please do. The contest will end Friday afternoon.

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How Much Gold Is There in the World?

2013-05-16T07:57:00.000-07:00

This is a topic more of curiosity than any real practical use. Recently I saw someone quite a figure in the Trillions of dollars to describe the total value of the gold in the world. The number they cited seemed awfully high but I wasn't sure so I wanted to find the actual figure and confirm or deny it.

The article How Much Gold Is There in The World? at CoinWeek asks and answers the question by saying theres 5 billion ounces (or 158,000 tons). But lets find more sources: This article from DNAIndia says the total inventory is 5 billion ounces so they agree. However a page at GalMarley says its 120,000 to 140,000 tons (3.8 to 4.4 B oz) above ground. The last source looks a little dated and I'm more willing to trust the 2 other sources that say its 5 billion oz. While none of these sources are really what I'd call the authority on the question I at least have a couple sources that are citing figures that agree. So I guess I'll just trust that.

Did you know the US Mint makes
gold coins of First Spouses?

Best estimate based on reports is that there is about 5 billion ounces of mined gold in the world.

Today we can see at Kitco that gold is trading around $1,470 per ounce. That means that in total the value of the gold in the world would be about $7.35 trillion dollars based on current spot. Of course that figure will range up and down on a daily basis based on the volatility of the market. Just this year the spot price of gold has ranged from $1380 to $1693. That would give the total value a range between around $6.9T and $8.4T.

We could roughly say that based on recent gold prices the total value of the worlds gold is around $7-8T.

A lot of the worlds gold is owned by governments and their central banks. The USA treasury holds over 8000 tons of gold. The Treasury site publishes their current gold inventory. Over half of the total or 4600 tons of the nations gold is in Fort Knox. The US gold holdings are about 5% of the total in the world. Other nations reserves hold at least 20-25% of the total gold inventories. The GalMarley site claimed that 70-80k tons of the worlds gold (over half the total) is in the form of gold jewelry. I can believe that. The remaining 20% or so of the worlds gold would be in the form of gold coinage or privately held bullion. I'm sure theres also some amount of gold in industrial purposes somewhere in the world but I'd have no estimate on that. Industrial uses are probably a small % of the total since gold is so expensive.

Photo from USMint.gov

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Credit Scores by State : Lend to Minnesota but Not Nevada

2013-05-14T08:09:00.000-07:00

I was looking for information on credit scores and found a page on Cardhub that has the average credit score by state. Cardhub indicated that the source was Experian but I followed the link and I don't see the state averages on Experian currently but they might have removed them.

The Experian site does have a full list of average credit scores by major cities for 2012 and 2011 numbers which are also interesting if you wanna look at individual cities.

Note the numbers are Experians credit score called Vantage Score and not the FICO number. The Experian numbers range from 500 to 990 so the cap is much higher than the FICO. Oh and before Nevada residents take offense I'm just joking with that article title.

In any case here are the average numbers per state for 2011:

Average Credit Score By State:

State	Average Credit Score
Alabama	680
Alaska	691
Arizona	680
Arkansas	683
California	690
Colorado	695
Connecticut	711
Delaware	694
Florida	683
Georgia	677
Hawaii	707
Idaho	705
Illinois	699
Indiana	695
Iowa	714
Kansas	702
Kentucky	688
Louisiana	674
Maine	708
Maryland	695
Massachusetts	713
Michigan	695
Minnesota	721
Mississippi	672
Missouri	694
Montana	714
Nebraska	712
Nevada	668
New Hampshire	714
New Jersey	705
New Mexico	677
New York	699
North Carolina	682
North Dakota	719
Ohio	696
Oklahoma	685
Oregon	704
Pennsylvania	705
Rhode Island	704
South Carolina	674
South Dakota	719
Tennessee	687
Texas	670
Utah	699
Vermont	716
Virginia	699
Washington	707
Washington, D.C.	682
West Virginia	686
Wisconsin	713
Wyoming	703
US National	692

The variation there is pretty wide really. The lowest average is in Nevada at 668 while the highest is Minnesota at 721. Thats about +/- 30 points from the national average or roughly 5% give or take. A 50 point swing between the best and worst is actually a pretty wide jump really.

I don't know why we'd see such large differences in scores but I bet that demographics has a lot to do with it. For example younger people have lower scores on average so a state that has more young people will have a lower state wide average. A high rate of delinquencies, foreclosures and short sales from the housing bust could also really hurt places like Nevada.

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Giveaway Contest - Free Macaroons from Sucré

2013-05-13T14:44:00.000-07:00

Anyone want some delicious macaroons?

One lucky reader will win a box of macaroons courtesy of Sucré.

The winner will get a free 8 piece Signature Macaroon Collection

This doesn't have anything to do with personal finance, but who cares... free macaroons!

Contest rules :

To enter please reply to this post and enter a comment. (one entry per person please)
Contest closes Friday at 3PM Pacific US
On Friday I'll pick a random number and select a winner among the commenters
You'll need to provide your shipping address so Sucre can send you the macaroons.
Contest is open to residents of the continental U.S. only.
The prize is offered by Sucré

Follow this link to leave a comment

p.s. I'm not getting any compensation or even free food from this. Just wanted to pass along a freebie for my readers.
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Business Survival Rates

2013-05-12T08:11:00.000-07:00

You've probably heard someone cite a statistic like "X% of small businesses fail in the first Y year[s]".    It seems that every time I hear someone cite that 'fact' the numbers vary.   I've talked about these varying and potentially misleading numbers before.

A while back Joe over at Retireby40 cited such a statistic and I asked him if he had a source.   Turns out he did and he pointed me to the data from the BLS :

Survival rates of establishments, by year started and number of years since starting, 1994–2010, in percent

That site has a chart showing the % of businesses which survived between certain years.    The rates vary depending.   For example 80% of businesses started in 2000 were alive 2 years later, but only 74.4% of the businesses started in 2008 lasted 2 years.   I assume that shift is related to the rough economy during the recession.

While the numbers vary from year to year we can draw some general observations from the data:

About 50% of businesses last 5 years.
Roughly 1/3 of businesses last 10 years.

Those aren't exact but close enough.    In fact the 5 year survival rate ranged from 49% to 55% and the 10 year rate varied from 34 to 37%.

I'm not really sure what the BLS does to measure survival of a business.    If a business doesn't survive that doesn't necessarily mean it failed.    If I retire and sell the business does it survive? I wouldn't think so. What if I move out of state?    What if my business is bought by another business?
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Best of Blogs for Week of May 10th

2013-05-10T17:22:00.000-07:00

Every Friday afternoon I share some of the more interesting or notable posts that I have seen in the personal finance blogs and other sources for the past week

The Big Picture shares State of the US Labor Market (in one big chart)
which gives an interesting view of how the labor market shifts around in a given month.

TBP also shares an interesting video showing What Happens During 1 Second of HFT?
Someone should turn that into a video game.

MyMoneyBlog wraps up his experiment Live Below The Line Challenge: $1.50/Day Lessons

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Can I Go To Jail For Not Paying A Debt?

2013-05-10T08:05:00.000-07:00

This is a guest post from Jon Emge. Jon is the Web Content Manager and Senior Advisor for My Money LTD and also writes articles and blogs for www.lifequotes4u.co.uk.

He has over 25 years experience in the field of personal finance in both the USA and UK, of which 17 years has been providing debt and bankruptcy advice.

It seems that even today many people are confused by what their options are if they are struggling with bills and debts, and what options a bank or creditor has in collecting a debt. I get asked regularly from both sides of the “Great Pond” can I go to jail if I don’t pay a bill, loan, credit card, etc.

The short answer is no, you cannot be put in jail just for being in debt. Debtor’s prisons were done away with many, many years ago. If your debts stem from some form of fraud or criminal activity, you would not be jailed for the debt or what you may owe, but for the crime or criminal activity. They are two separate things.

Just a quick side note, in the USA and UK and most other countries you cannot be jailed for being in debt or past due/in arrears, however there are countries where you can be jailed. But that’s another scary story for another bedtime.

However that doesn’t mean that being in debt and being on the receiving end of collections efforts is not stressful and unpleasant.

Knowing what to expect if you are going to miss payments or not be able to repay a loan or debt can remove some of the stress, knowledge is power.

So what can you expect? You can pretty much expect to get phone calls on a regular basis asking you to make payments. The collection person will try to be firm in their discussion with you and want you to commit to making a payment, in most instances there and then. They want to resolve this issue when they have you on the phone so they can move on to the next call.

If they are a well trained experienced collector, they should ask what has happen to cause you to be late with the payment, and may be able to offer some solutions such as a payment holiday, extension, recast, rewrite, or some in-house debt management plan.

When pressured to make a payment, don’t make promises you cannot keep. Don’t promise to make a payment when you know you can’t or there is a high probability you won’t. This doesn’t put you in the collection agencies good graces.

You will also receive some mail/post demanding you make payments.

The next level of collections may be the threat of court or legal action against you. In the case of a secured debt such as a car, or property/house, they may begin repossession or foreclosure proceedings. This is when things get a bit more interesting.

If you are taken to court, it is always in your best interest to seek legal advice and be there in court on the day. That way you have no surprises. Just by attending court doesn’t mean the outcome will be in your favor. I have found the courts in the UK to favor the consumer where as in the USA it is less so.

In court a judge may grant the creditor a Judgment (USA) or a CCJ/County Court Judgement (UK). From there a creditor can seek the courts to enforce the judgement through a variety of means.

In the UK they look to send out Bailiffs to take property from your home, or place a Charging Order against your house. In the USA they may look to attach your wages or some other asset you may have.

When it reaches the point of Bailiffs or wage garnishment it does get ugly, and this is what you need to try and avoid. If you seek professional debt advice there are options available to you, even in the extreme case of going bankrupt.

So just a little overview of what can happen if you miss payments or are in arrears with an account, but no jail, prison or police.

A relevant anecdote to share.

Many years ago when I was in the auto finance/banking world a gentleman decided he no longer needed to pay for his car. So we went through the usual collection procedures and process and eventually we had to assign his case to an outside repossession agent to repossess the car. The agent searched and searched but could not locate the car. It was obvious the gentleman had either hid the car or had it locked away in a garage somewhere, still basically hiding it.

So I had a Writ of Replevin issued through our legal council and granted by the courts. The writ was served on the gentleman, meaning it was handed to him by a process server who then filed a form in court stating the man had been served and was informed of the writ.

A Writ of Replevin is a legal action taken to recover something. We could not locate the car, so we wanted this person to be brought to court to explain where the car was to a judge so we could recover it.

The gentleman never showed up in court that day even though he was served and knew he had to legally be there. As a representative for the bank I was allowed to make a statement, and my statement to the judge was that this gentleman is flouting the law as he was served and knew to be here in court at this date and time. By choosing not to attend the court hearing, he was making a statement that he feels he is above the law.

The judge that day warned me I was pushing things a bit, but the judge also knew I was correct. The judge issued a Body Attachment for the gentleman in question, which basically means he was to be arrested and brought to the court to explain his behavior to the judge and to me, the representative of the bank.

Funny enough the next day the car were seeking to repossess was found in front of the gentleman’s house.

So no you will not go to jail for being debt, but you need to seek professional help.

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How Much Does it Cost to Build a House?

2013-05-09T08:11:00.000-07:00

A few years ago a friend of my dad had a house built for about $150,000. He originally got a pretty wide variation in estimates and if I recall right other builders quoted him $200,000 or more. Say you were to buy a piece of land like he did and hire someone to build a house for you - How much would it cost? Of course the quality of materials and the design of the house will impact the costs a lot.

The price of home building is going to be so variable that its

not possible to set an accurate amount that would be useful across all situations.   There are too many factors that would impact the cost significantly.   Size of the house, local labor costs, local home building market, local laws, quality of materials chosen, etc.   All of these variables will impact the costs substantially.

The National Association of Home Builders (NAHB) cited average costs for 2011.   They say the average construction costs for new homes in 2011 were $184,125 for a 2311 sq ft house.   That gives us a general rough average figure. The numbers will vary a lot depending on where you live and the nature of the house.

So how can you find out the cost of building a house in your area? Again, there are too many variables to get a solid number but you could use some basic estimating tools to find a broad range of costs.   Below are 3 tools you can use to estimate home building costs.   You can then use those 3 tools to give you an estimate of the range of prices for your area.

Method #1
Building-cost.net has a calculator that you can use to estimate home construction costs.   They will let you pick a lot of detail about the size of the house, the design, the features the quality of construction and then specify the metro area that the house is in. Then they give all the final results of the cost broken down including the materials, labor, and contractor markup.   I first chose the middle level quality of '3' and their figures for a typical 2300 house in my area came out to $391,000 which is very high.   New construction 2400 sq ft houses in our area are selling for closer to $300,000 already built.   I ran it again and chose quality level of '5' and it came out with a more realistic figure of $217,000 which is closer to reality.

Method #2
Buildingjournal has a simple calculator that estimates costs.   They only ask metro area, exterior finish, number of stores, basement, construction grade and the sq ft size.   They say a 2300 sq ft house in my area costs about $187,000.

Method #3
One way to figure out the cost of new construction in your area is to look at what new houses sell for.   You'll then have to deduct the cost of land.   That may be a little harder to figure but you can usually find vacant lots for sale in your city and figure out the land values from that.   So for example if a new 2400 sq ft house is selling for $300,000 in my area and a similar size vacant lot here sells for $50,000 then I could estimate the local construction cost to be closer to $250,000.   Of course thats not really exact either. A builder may have a higher profit margin or they could even be taking a loss.

Estimating a range of costs
Given the 3 estimating methods above I get figures of $217,000, $187,000 and $250,000.    Thats just about $217,000+/- 15%.   I could also say the range is $81-$109 / sq ft.   I expect this is in the right 'ball park' for the local home building costs.

Photo by ArmchairBuilder.com
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How Much Do Bond Holders Get Back in a Bankruptcy? (on average)

2013-05-07T07:49:00.000-07:00

When a company goes bankrupt the bond holders stand a good chance of getting back some of their principal investment. Bonds are a form of debt and when the company goes into bankruptcy they are supposed to repay their debts as much as possible. Stock holders on the other hand are considered owners of the company and are generally last in line to get any money and therefore usually get nothing or next to nothing.

But how much do bond holders usually get back?

I found the answer in this Standard and Poors report : U.S. Recovery Study: Recent Post-Bankruptcy Recovery Levels Disappoint Senior Unsecured Bondholders

They say : "Recoveries averaged 33% in 2010 and 2012 (through May)--significantly lower than the long-term average of 43%"

Of course those are just the broad averages so it varies considerably. But this gives us a general idea of the typical loses for bond holders in the case of bankruptcy.

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Save1 : Save Money and Feed Children

2013-05-06T08:06:00.000-07:00

There are a lot of sites out there that share coupon codes and promo codes for online merchants.   If I'm making a large purchase on the internet I will often try and find a promo code or coupon.   Usually those sites are just freely sharing information and I assume they either get a commission kickback from me following their link and/or they make money of ad revenue.

A new site named Save1.com has a dual purpose of both giving you a coupon so you save money and helping to feed children.   Every time you use a coupon off Save1 they provide a meal to a child in need.

Usually I just randomly find coupons online and I haven't had any preference for one website over the other.   If you're going to use sites like that then why not use one that has a charity function as well. You get a coupon and a child gets a meal.   Good deal right?

Save1 is pretty straight forward and easy to use.   You just go to the site, search for the merchant you are interested in and applicable coupons will come up.   You then click on the 'use this offer' link for the coupon in question and thats it. Easy.   For example, I went to Save1, searched for 'sears' and a bunch of coupons like $5 off $50 and others came up.    If theres a promo code then you may have to enter that in checkout.

For more information they have a Children Feeding FAQ and a Coupons/Offers FAQ    You can also read their Getting Started eGuide online.    Save1 is a for profit enterprise so they are trying to make an income off the site too. Thats OK with me.    You can either pick a website that keeps all the money or you can chose to use Save1 and they'll feed a child.

Note : This is not a paid endorsement.   However when I told Save1 that I was going to write an article about them they said they would send 100 more meals to children.

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Experiences Aren't Necessarily Better than Things

2013-05-05T07:41:00.000-07:00

One of the commonly reoccurring themes in personal finance blogs that I've seen is the idea that 'experiences' are more beneficial purchases than 'things'.   The argument is along the lines that you will get more memorable and lasting impact from spending money on an experience than you will get from purchasing a thing. There seem to be a few studies on this topic and various blog articles about it. For example theres Happiness for Sale: Do Experiential Purchases Make Consumers Happier than Material Purchases? and Happiness: No Purchase Necessary, Says Study

I can understand the idea in general that experiences can be better use of money than things if you look at the lasting happiness of the experience or thing versus the cost.   A fun vacation once a year makes me a lot more happy than making my car payment.     But experiences aren't universally better than things and you shouldn't try and look at it as some sort of universal rule.   I was going to title this post "Experiences Are Better than Things (unless you do the experiences too much or the experiences aren't fun or you really like the things)" but that was too long.

Familiarity waters down the value of things in our minds

CNN discusses one of the studies on the topic : Study: Experiences make us happier than possessions
and they point out that experiences seem better " in part because the initial joy of acquiring a new object, such as a new car, fades over time as people become accustomed to seeing it every day, experts said".   I agree with this.

When I was a kid the VHS and Beta VCR's first came out.   My family couldn't afford to buy a VCR (or likely my parents just didn't want to spend the money ).   However the video rental places would rent out VCRs.   So sometimes we would rent a VCR and a couple movies for a weekend. I remember at the time when I was a child that when we rented a VCR it was a special occasion that made me happy.   The reason it was so exciting was that we didn't own a VCR so renting one to watch movies was special.   Later we bought a VCR (a Betamax of course) and then owning a VCR became our normal state and renting a movie was a routine thing that was no longer special.   As soon as we owned the VCR it wasn't special and we were familiar with it.

If I took $100 and went and rented a convertible car for a weekend I'd remember the experience.   Driving around in the convertible car would be fun.   I'd look back on it and feel I really got my $100 out of the experience. But if you spent $400 a month to lease a new convertible then drove it day in an day out for 3 years then you wouldn't have a memorable experience every single weekend you drove it.   The car would be "normal" to you and "nothing special".   You'd become familiar with it to the point of taking it for granted and not getting any special incremental enjoyment for the 87th weekend you drove it compared to the 86th or 85th.

We don't value what we take for granted

I grew in a home with a beautiful view of rolling fields and a snow capped mountain.   Because of that I don't have much appreciation for beautiful snow capped mountain views.   I distinctly remember someone pointing out how beautiful the view was from my home and me thinking at the time that it was "no big deal".   I'm sure other people would love to buy that same property and live there with the beautiful view but I spent the first 18 years of my life looking at it and so I didn't appreciate it.

You become familiar with the stuff you buy gradually over time. They are not new and unique but are instead parts of your routine life.

Unique Experiences are Better than Repeat ones

People don't usually go on a vacation to Hawaii every day.    Many of us might only go to Hawaii once in our lives if we go at all. So if you look back at your life and think about all the things you did then that single vacation to Hawaii may stick out as a very memorable "once in a lifetime" experience. On the other hand if you live in Hawaii, then a vacation to Hawaii is called "going home" and its not so unique or memorable.

I've been to Las Vegas at least a dozen times.   I've lost count of exactly how many times I've been there but I'm sure its over a dozen.   When I go to Vegas its not new to me and each additional experience is not very memorable.   I've spent in the range of $1,000 to $2,000 on each vacation to Vegas.    I don't even remember some of those individual vacations and therefore didn't get much value out of them.   I've become so familiar with Vegas as a vacation destination that going there has less and less value.   The first trip to Vegas was very memorable and fun experience initially.   If I had gone once and not returned then I'd likely remember that one vacation very fondly and it would have a much higher value to me as an experience.   But now that I've been there enough times that all the trips blend together and are not very memorable.   I can hardly remember my first Vegas vacation and its value as an experience has declined considerably.   Now don't get me wrong I still enjoy a vacation in Vegas and don't think my time and money spent there is wasted, but it doesn't stick out in my mind as a particularly memorable experience.

If you live in the city and take a nice drive in the country then this might be a fun and memorable experience to you.   People who live in a rural area may take that exact same drive every day of the week and see nothing special about it at all.   What you consider "a lovely drive in the country" they might consider their commute to work.

If your experiences are things you do frequently then they are not especially enjoyable or memorable and are not of high value to you.

Some Experiences Suck

I can't say that I've ever had a horrible vacation story, but there are many vacation horror stories out there. The closest I recall having a bad vacation was when a friend and I stayed overnight in another city to watch our football team lose miserably to a crappy team while it rained on us. I probably spent a couple hundred dollars on that experience. I could have stayed at home and watched my team get beat in the rain-free warmth of my home for free and had a much better experience.   I could have taken that couple hundred bucks and bought a football video game, an official team jersey, watched my team lose on TV sitting on my comfy couch and been tons happier.   OK now I'm just depressing myself.

Of course people don't set out to pay money for experiences that suck.    You only find out that an experience sucks after the fact. But there is always a risk that if you put your money into experiences that you'll end up with an unsatisfactory experience.   If we assume that experiences are better than things this really only holds true for the experiences that actually turn out as positive and fun experiences as we hoped they would.   An unhappy experience can stick in our memory as well as a happy experience. You don't hear a lot of personal finance bloggers talking about their awful vacations when they were sick in bed half the trip, and it rained the whole time, and then they got stuck overnight at the airport during a blizzard, and their sullen teenager was mad the whole trip for no reason etc. when they're saying how much better experiences are than stuff.

Some of Us Like Certain Things a Lot

I have certain things in my life that I get a very good happiness / cost return on.

Spending $2000 on a set of fancy rims for your SUV may bring you little long term joy.    Unless of course you really appreciate and enjoy having fancy rims on your vehicle.    I don't have any interest in fancy rims for my car.   But some people seem to really enjoy that kind of thing.   If spending $2000 on fancy rims brings them significant enjoyment then more power to them.   To each their own.   Each of us has our own stuff that we enjoy whether its a collection of comic books, some nice clothes, a motorcycle, what have you.

I do agree with the idea that experiences can be a better use of money than buying more stuff.   I'd rather go to Italy for the first time than buy a slightly newer car at this point or have a giant collection of DVD movies that I never watch.   On the other hand stuff isn't all bad and its certainly not generally worse than any experiences.   I wouldn't trade my big screen TV for another trip to Vegas.

I'm not sure what the goal of the message is

When people say that experiences are better than stuff, I'm not entirely sure what they expect us to do.   Do they want me to sell my car and use the money to go on vacation?

Is the message simply that you should get rid of some of your junk?   Americans generally do have too much stuff and I think most of us can benefit by getting rid of some of our stuff.   But mostly what I'm talking about is junk and clutter.   My closet may have a bunch of old shirts that I don't wear anymore and that I ought to donate to the charity.   But that doesn't mean that I shouldn't buy any new clothes or that the experience of going out to the movies is better than a new pair of pants.

I expect the idea is that people ought to change their spending behavior and stop buying so much stuff.    I think that message can stand on its own without trying to justify it by claiming experiences are better.   There are many things in life better than excessive materialism.

To be clear I'm not saying you ought to go out and buy a whole pile of 'stuff'.    I just don't really agree with the whole 'experiences are better than stuff' thesis.

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Best of Blogs for Week of May 3rd

2013-05-03T17:21:00.000-07:00

Every Friday afternoon I share some of the more interesting or notable posts that I have seen in the personal finance blogs and other sources for the past week

DoughRoller talks about Homebuying Programs for Low-Income Families

DQYDJ created a Crude Oil Price Return Calculator – Brent and West Texas Intermediate
So now you can finally figure the inflation adjusted compound growth rate of those barrels of West Texas crude oil you bought back in the 90's.

DQYDJ also asks Why Don’t You Buy That Used?

The Big Pictures shares the Cheapest ETFs for Any Investment Objective

AP article via Yahoo reports that about 20% of Vegas cabbies ripped off customers Audit: Vegas Taxis Overcharged $15M to Airport

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