Back in the late 1980s, I collected baseball cards just like millions of other kids. That’s around the same time that popularity of baseball card collecting skyrocketed and the producers of cards—and Major League Baseball—ruined the hobby, never to recover.

Taking advantage of collector—and even investor—interest, the companies tried to make as much money as possible and increased supply to meet demand. By the early 1990s, there were too many brands of baseball cards producing too many variations and too many prints of each. Card collecting became a chore rather than a fun and exciting exciting. (Plus, like millions of other kids, I was simply getting older and less interested.) Looking to make money on baseball card appreciation, fewer cards were handled and more cards were kept in pristine condition, ensuring that no cards would ever be “rare” in top condition.

Recent;y, I had heard that Major League Baseball finally realized that they had helped ruin the card collecting hobby (with additional help from the public distaste with the sport for a time). They recently cut back the number of baseball card producers to just Topps and Upper Deck. Perhaps, due to limiting the production of baseball cards and the resurgence of the sport, card collecting and trading would become popular again.

As I tried to complete team sets of Mets cards for myself and my girlfriend, not for investment but just because we’re fans of the team, I discovered that not much has changed. It’s true that there are only two companies producing baseball cards, but there are so many variations and sets that keeping track of everything would still be a chore. For example, Topps sells factory-sealed sets for each team. The team sets contain only about 15 cards, but these cards are slightly different from the cards you would find if you looked through the traditional random baseball card packs sold in delis and convenience stores looking for the cards you want.

Here is what it would take the be a true collector presently. If you’re an enthusiast looking to complete just a 2008 collection for one team, not only do you need all the cards from Series 1 and Series 2 featuring players from that team, but you’d need a second 55-card “special edition” team set that includes cards for the managers, coaches, and mascot. You would also need cards from the “Opening Day” series, the “Chrome” series, the “Co-signers” series, the “Finest” series, the “Milestones” series, and the “Heritage” series. Don’t forget that Topps also owns the Bowman brand, so you would need to find the “Bowman” series as well.

Even for kids who spend their parents’ money with reckless abandon, it’s simply too expensive to properly be a child interested in being successful at collecting cards in the traditional manner. You might as well just give up now. I certainly understand why millions of kids have left card trading and collecting behind.

Here’s how to make card collecting popular (and perhaps even profitable) again. Lower the price of baseball cards. Reduce the number of cards in a complete set to fewer than 1,000 for the year. Don’t print as many. Keep investors away. Convince kids that the cards should be traded, handled, and even abused, not placed in pristine holders to be kept in mint condition forever.

Nicholas emailed me with this question.

I’m trying to find some kind of free accounting software for balancing my checkbook, and that sort of thing. I already use Mint.com, but it isn’t much good if I plan on writing a check, or if I want to create a recurring transaction.

I don’t need something to actually connect to my bank account, although it would be convenient to be able to import transactions. I just need to be able to keep track of everything. Right now I’m using Excel, but Excel really isn’t meant to be this kind of tool. I’d appreciate any recommendations you might have. Thanks!

Nicholas is right about Mint, Yodlee MoneyCenter, and other online services. These websites rely on downloading information from banks, and banks don’t know when you write a check unless you have sophisticated business services. For Nicholas’s purposes, these services fall short.

If Intuit Quicken and Microsoft Money Plus are out of the question—and Nicholas’s requirement according to his email is free—then there aren’t many solutions available.

I would suggest GnuCash. GnuCash is free accounting software available for Linux and other flavors of Unix, Mac OS X, and Microsoft Windows. Like Quicken and Money, GnuCash allows you to track your financial accounts, including cash, credit, and investments.

Unlike Quicken and Money, the designers of GnuCash take an approach more true to professional accounting principles like double-entry accounting. While the more popular (and more expensive) software programs use “accounts” to represent assets and liabilities and use “categories” to record expenses and income, GnuCash considers assets, liabilities, income, and expenses to all be accounts. That means that every transaction is recorded as a transfer between two accounts.

It’s a little weird at first, but it begins to make more sense as you have more practice.

GnuCash will let you easily track your checkbook. When you create a new book of accounts (which GnuCash calls a file because the database is stored in a computer file), the default options include a checking account. You can use the default checking account, or add more if you have more than one to track, to keep your checkbook up to date.

When you write a check, you could record a decrease (GnuCash calls this a “withdrawal”) to your checking account and an increase (GnuCash calls this an “expense”) to the appropriate expense account, such as your telephone expense account. In this manner, your checking account in GnuCash will always match your checkbook. You will be able to see at a glance how much money you have truly available in the account, to help prevent overdrafts.

The problem with tracking a checking account is the reconciliation between your book of accounts (ledger) and the bank statement. If you have outstanding checks—checks you have sent out but haven’t been cashed by the recipients—then the balance in GnuCash won’t match the balance at the bank.

While the above method will be fine for most people and has the benefit of tracking the usable balance in your checking account, if you want to keep a true reconciliation, then you need an additional account. The other option is to create a liability account called “Outstanding Checks.”

When you write a check, record an increase to Outstanding Checks and an increase to the appropriate expense account, perhaps the telephone expense account like above. Then, once the phone company deposits your check and your bank has decreased your balance, you can record a decrease to Outstanding Checks and a decrease to your checking account.

Both options are accurate, so it’s up to you which method to use. If you download GnuCash, both options are free as well. GnuCash does more than just balance your checkbook, as well. It does more than you might expect from free software. Here are some of the features you might find useful:

• QIF and OFX support, so you can download files from your bank and reconcile your accounts
• Schedule recurring transactions
• Track your investment accounts and download stock prices
• Use multiple currencies
• Generate reports and graphs to illustrate your finances

There’s one drawback. If you want to run GnuCash on an operating system other than Windows, you’ll have to “compile” the software yourself. There are instructions for installing and using GnuCash here.

The Dow and the S&P 500 indexes were both up 2.5% and the Nasdaq index was up 3.1% today. Is this a sign of things to come? I wouldn’t mind if it were. My 401(k) has been decimated this year. That’s a literal decimation, a reduction of 10% of its value. Based on the short history of stock market recessions in the United States, the worst may be over.

The S&P 500 passed a total decline of 20% from last October’s peak on July 9. Here is what history has to say about 20% declines, the signal of a “bear market.”

[S]oon after the onset of a bear market, the market generally has risen. One month after breaking the 20% threshold, the S&P had gained 3%, on average, during those nine bear markets. Two months later, it had risen 6%. on average. Three months later, it was up 5%, and six months later, the S&P had returned 7%. Twelve months after the initial decline, the market had surged 17%, on average…

So far, this bear market has unfolded exactly as the past nine did. On average, the nine crossed the 20% decline point nine months after beginning their decline. We’re right on schedule. The past bear markets lasted, on average, another five months…

My hunch is that the market will decline another 10% or so before it hits bottom.

History is generally a good guide, even though the human brain often has a hard time remembering history as it actually occurred. Looking at the numbers is more reliable than memory, so there may be hope for the market in store by the end of the year. By investments accounts will be thankful.

Goodbye, Bear Market?, Steven Goldberg, Kiplinger, July 14, 2008

Five years ago today, on July 16, 2003, I began Consumerism Commentary, writing a short post about myself, the purpose of this website, and my first “public” financial update. By that time, I was about a year and a half into a corporate job, a change from my previous non-profit, arts-related life. I had already reformed my spending, controlled my credit card usage to only what I could pay back each month, and reduced my student loan debt.

Since then, I’ve continued to chronicle my financial progress on this website through monthly financial reports, and Consumerism Commentary quickly expanded to cover the latest financial news and my thoughts about a variety of money-related issues.

Rather than patting myself on the back for the apparent success of Consumerism Commentary over the past five years, or providing a year-by-year summary of the site’s progression, I’d like to open the floor to readers. Last year I formulated a reader survey to determine more about this website’s readership in terms of demographics and interests, but this year I’d like to keep things less formal. Please feel free to leave some comments, particularly if you’re a long-time reader, to let me know what you’d like to see here, leave tips, or just wish Consumerism Commentary a happy five year anniversary.

One of the most important metrics for tracking financial progress is net worth. I write about my net worth, or a modified form of it, every month when I report my balances. By watching my net worth change over time—usually increasing from month to month but occasionally decreasing—I can get a fairly decent picture of my financial health.

What is net worth?

Net worth is the financial value of all your assets, everything you own, subtracted by the financial value of all your liabilities, everything you owe. Finance gurus are familiar with this formula:

Net Worth = Assets – Liabilities

The equation works as well for individuals as it does for businesses. There should be no question of what is included in the net worth calculation. It starts out simple. Your bank accounts are assets and your credit card accounts are liabilities. These are easy to include in your net worth calculation because the values of these accounts are expressed in dollars and cents at any moment. You could at any point check your accounts online to get an up-to-the-minute balance.

Investments are assets as well. Generally, investments are held in shares, so a calculation may be necessary to convert your shares to a dollar amount that you can include in your net worth calculation, based on the value of those shares. If your investment is a stock traded frequently, you can generally place a value easily. If your investment is something more complicated like a business partnership, then there might be some wiggle room when coming up with a value for your net worth calculation.

Your house is an asset. Its anticipated sale value, even if you don’t plan on selling, should be included as an asset, while the value of your mortgage if you have one should be included as a liability. Your net worth includes all assets and all liabilities, so if you own a home, you must include your house and its mortgage.

Here’s more discussion about how to calculate your net worth.

How is net worth useful?

You might find that a true net worth calculation doesn’t provide you with useful information all of the time. For example, a true net worth calculation includes the value of everything you own. That includes your television, furniture, car, coin collection, and light bulbs. Since I use my net worth to track my financial progress over time, I’m not concerned about the value of most of the things I own. Including the liquidation value of my electronic equipment would skew my net worth slightly and in such a way that it would reduce the usefulness of my net worth.

I include the value of my car in my net worth, not because I plan on selling it but because it was once associated with a loan. The value of the loan is considered a liability, and it was important to me to reduce that liability as quickly as possible. By including the loan in my net worth, I could track my progress as I eliminated that debt and the effect of the remaining balance on my total financial picture. To include the automobile loan, it made sense for me to include the value of the car (which I check once in a while using the private sale price listed on edmunds.com). After paying off the loan, I left the car in my net worth calculation for the sake of continuity.

It’s this personal continuity that is important. As long as you maintain the same formula from month to month and year to year, it doesn’t matter what you include in your net worth calculation as long as it makes sense to you.

Net worth is an internal metric

Net worth is best used as a tool to compare your progress over time, particularly if you insure it is calculated the same way every month. While some aspects of your net worth you may view as beyond your control, like the performance of the stock market, there is enough information in the numbers to give you a good picture of the results of your everyday financial decisions. There is something interesting about the idea of being able to compare your net worth with those of other people, but there are a few reasons why it’s best to keep your net worth an internal metric.

A quick online search can provide broader statistics so you can compare your net worth with a large population of people in your income range or age range. These comparisons are meaningless, however. Age groups can include a variety of education levels, particularly at the lower end of the spectrum. At the other end, you may be grouping retirees in with CEOs. If you’re comparing your net worth with people with similar incomes, you don’t know whether this income is a full year’s salary, pension, or dividends from investments.

Different people are faced with different situations. If you’re 22, making $40,000 in your first year as a teacher, dealing with student loans, single, and living at home with your parents, what benefit is there in comparing your net worth with another 22-year-old, making $40,000 in his fourth year in a factory, married with one child, owning a home and dealing with a mortgage?

That’s why technologies like NetworthIQ are popular. You can compare yourself with people like yourself to get an idea of where you stand among your peers. NetworthIQ does a good job of encouraging people to calculate net worth in a similar manner and groups members among different dimensions to ensure meaningful comparisons. This gets you closer to being able to compare your net worth with others, but there is still no guarantee that people are providing true information.

As I was one of the first people to blog about my personal net worth and track my finances online in blog form, I think it’s great that tools like NetworthIQ exist now. I’m also slightly interested in blogger comparisons like this one from last year, but they have very little real value beyond voyeurism.

I prefer not to worry myself about other people and focus on my own progress. My goal is to keep my finances moving forward, which usually means showing an increase in net worth each month, and other people’s finances have absolutely no bearing on my progress. By publishing my financial reports each month, I keep myself accountable to the public, and this inspires me to make decent financial decisions. Depending on your psychological tendencies, comparing yourself with others could provide you with motivation to improve your financial condition or it could leave you frustrated with your own situation.

This motivation can be helpful, but don’t look for too much meaning in person-to-person or person-to-average comparisons.

Homeowners in New Jersey are eligible for a partial rebate of property taxes paid. If you owned and lived in a house in New Jersey on October 1, 2007, you are eligible. Renters like me are eligible for a separate rebate up to $860.

If you haven’t received an application, you should shortly. The state suggests calling the Homestead Rebate Hotline if you haven’t received this application by July 23.

Tenants will not receive an application. The rebate form for tenants was included in the 2007 income tax package. I checked my state tax return, which I filed via TaxAct, and my rebate application was submitted with my income tax form. As I am neither disabled nor over the age of 65, the maximum amount I can receive for this rebate is $80, a 6.7% increase over last year.

The calculation for the homeowners’ rebate is different. For those under 65 and not disabled, you will receive either 20% of the first $10,000 of property taxes paid (if your income is below $100,000), 10% of your total property taxes paid (if your income is between $100,000 and $150,000), or nothing.

To receive your rebate, you muat file your application by August 15.

2007 Homestead Rebate Program

Money Magazine released the results of the publication’s survey of the towns with the highest median household income. New Canaan, Connecticut tops the list with a median income of $231,138.

Considering a move to help your income go farther? Don’t choose one of these locales. Considering a move to be closer to culture, leisure, and advanced education without living in a city? These towns might be for you. Here are the top ten.

1. New Canaan, CT, $231,138. “New York City’s elite once chose New Canaan as a vacation town, but they liked it so much, they decided to stay there year-round and turn it into one of the nation’s wealthiest residential communities.”

2. Darien, CT, $218,130. “Darien was once a vacation community for New York City’s upper crust who decided to lay down year-round roots.”

3. Lake Forest, IL, $212,122. “With a town plan heavily influenced by English gardens, Lake Forest is home to mansions and vast estates seated on the bluffs overlooking Lake Michigan.”

4. Saratoga, CA, $196,420. “The [Paul Masson] Winery is still there, but so are the best and brightest of Silicon Valley, whose fortunes have spilled over into this upscale bedroom community.”

5. Westport, CT, $193,540. “Once an artist’s colony, Westport is now better known as an affluent bedroom community on Long Island Sound that’s held on to its cultural roots.”

6. Los Altos, CA, $189,839. “The village, in San Francisco’s Bay Area, has become a haven for techland’s top earners. Still, the birthplace of Hewlett-Packard prides itself on maintaining a semi-rural feel.”

7. Potomac, MD, $183,258. ”[M]uch of Potomac has been turned over to the Washington, D.C., area’s wealthiest residents… If you are of an equestrian bent, the area still offers a number of riding schools, breeders and stables.”

8. McLean, VA, $180,103. “If you want your neighbors to be rich AND powerful, move to McLean. Vice President Dick Cheney is said to be building a home there for when he leaves the West Wing… [B]e careful who’s listening: The CIA is headquartered in the town’s Langley area.”

9. Wellesley, MA, $172,900. “The Boston suburb is home to the school of the same name, which is consistently rated as one of the nation’s top liberal arts colleges. Notable alumni include Senator Hillary Clinton…”

10. University Park, TX, $170,150. “University Park started as a group of houses surrounding Southern Methodist University almost 100 years ago. Since then it’s been swallowed up by Dallas’ urban sprawl, but the area still likes to maintain its identity.”

Other towns in the top 25 include Bethesda, MD, Greenwich, CT, Ridgewood, NJ, Los Gatos, CA, Deerfield, IL, and Garden City, NY.

25 top-earning towns, Money Magazine, June 14, 2008

This is a quick Sunday night note to say that I’ve refreshed the list of $25 bonus referrals for new customers this evening. These appear to be going rather quickly and I try to keep the list updated with fresh links.

For the Orange Savings Account referrals, I have on several occasions asked readers to provide their own, as I have used all that have been allotted to me. The waiting list is closed, however, as I currently have more than enough volunteers to last a while. I will post another announcement when the waiting list is open again.