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April 2006

Welcome to the latest Carnival of Personal Finance, edition number 46.

For those coming to Consumerism Commentary for the first time, you can learn a little bit about me, Flexo, and this blog. You can also peruse through what I’ve arbitrarily decided were my “best” blog entries of 2005. Thanks to everyone who submitted an article this week. It’s hard to believe we’re approaching one year for the Carnival. Here’s what we have: Read the full article →


TIAA-CREF LogoTIAA-CREF has finally come through! You may have been following the saga. If not, here’s the short version: In order to reduce my tax liability from self-employment income, I wanted to open a SEP IRA. The SEP IRA lets you contribute tax-free beyond the Traditional/Roth IRA limit, but only as an employer. I employ myself and generated several thousand dollars last year, so I qualify.

There are more details about SEP IRAs here, but basically I was allowed to invest up to 25% of my income or $42,000, which ever amount is less. Needless to say, I didn’t invest $42,000. In fact, I only invested $858, but it was enough to turn my remaining 2005 tax liability into a tax refund.

I applied for the account in March and my application was received on time by TIAA-CREF in order for my funds to be deposited via EFT on April 7. I tried to leave enough time before the tax deadline (April 17) just in case I ran into problems.

Ran into problems I did. I think it’s just attributable to the fund company’s backlog during tax season, but they didn’t get around to funding my account. I called several times as I mentioned in previous posts, and I’m happy to report that today, the account was finally funded. I was assured the contribution would be “coded” to qualify for the 2005 tax year, even though it is now past the tax deadline and I didn’t file for an extension.

I chose the TIAA-CREF International Equity Index Fund (TRIEX) to increase my exposure to international stocks as I felt that sector could use a little boost in my allocation.

Throughout 2006, I will continue to contribute to the SEP IRA on a “once-in-a-while” basis. I want to make sure I don’t go over the limit (25% of self-employment income). I was spurred on to look into the SEP IRA account to reduce my tax liability after reading two posts on Blueprint for Financial Prosperity. Thanks, Jim!

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On Monday morning, I’ll be hosting the Carnival of Personal Finance. If you’re a blogger planning on participating, please submit your article as soon as possible! The Carnival’s a great way for new bloggers (and older ones as well) to showcase some of their best entries in the last week or so. Everyone loves a carnival!

Here’s news in the pfblogosphere. Dawn from Frugal for Life, Caitlin from Clutter2Cash and Nina from Sitting Pretty have banded together to for a new blog network, QueerCents. It makes sense for those interested in personal finance to bond together when they have a common theme.


Here’s another article on the outrageous pay given to CEOs even when their performance is subpar. Last year, there were five specific offenders singled out. Today, there are five different companies, and drugs are on top:

* The CEO of Pfizer, Henry McKinnell, made more than an average of $15.5 million a year while the company’s shareholders lost 35% over the past five years. His pension is worth $83 million.
* Merck‘s shareholders lost 41% in the past five years while former chief executive Raymond Gilmartin totalled $54 million including his company stock as he cashed it out.
* Edward Whitacre was the chairman and CEO of SBC and now AT&T. He earned $85 over the past five years, and will earn millions more in consulting fees and pension from the company after he retires. In those five years, shareholders have lost 40%.
* Shareholders in Bell South lost 23% while its chairman and CEO F. Duane Ackerman made $46 million.
* Safeway‘s CEO Burd earned $52 million in the past five years. His company’s stock has plunged 54% in the same time frame.

If there’s any good news in this, it’s that after five years of decline, now that I’ve invested $50 in a telecommunications ETF, perhaps the sector will start climbing upwards. Drug companies are everywhere in my index funds. But seriously, CEOs are supposed to increase the company’s value for shareholders. These guys should be fired, not rewarded.

The only other possibility I can think of is similar to the movie The Hudsucker Proxy, in which a board of directors installs who they think is a moron to the post of CEO in an attempt to drive down the stock price to a point where the board can snatch it up and later return the company to its former glory. These CEOs must be getting paid well for playing their part in the grand scheme.


Gas Service Stations and Gouging

by Luke Landes

The federal government announced the other day that they will investigate price gouging by gas stations. The announcement itself may have helped to ease prices a little, but most of the time, the investigators report that price movement is merely due to the forces of supply and demand. I heard on the radio this morning ... Continue reading this article…

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More Clarification on the Carnival

by Luke Landes

Yesterday I posted about the removal of some future Carnival of Personal Finance hosts from the schedule. I don’t want to stir up a debate about whether it’s “better” to post small blog entries several times per day, like two sentences about receiving a tax refund, or long blog entries only when the mood strikes ... Continue reading this article…

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Some Carnival Hosts Will Be Removed

by Luke Landes

Some time ago, I added a requirement for all bloggers who wish to host the Carnival of Personal Finance. All new hosts are required to consistently post at least twice per week to their individual blogs. It’s not too much to ask; those who host the Carnival should be active bloggers. Although the traveling nature ... Continue reading this article…

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Carnival of Debt Reduction #32

by Luke Landes

Welcome to the Carnival of Debt Reduction #32! In this Carnival, we highlight entries pertaining to getting out of debt, a lofty goal attempted only by some. When getting out of debt becomes a priority, everybody benefits… well, everyone other than shareholders of companies who make their money off of charging people to borrow. Perhaps ... Continue reading this article…

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I’ve Returned From California

by Luke Landes

Earlier today, I arrived back at my apartment. My vacation is complete, and I already miss being in California. There is still more my girlfriend and I would have liked to do on the west coast but we didn’t have time for. It’s back to the mundane for me: tonight I plan on finishing up ... Continue reading this article…

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by Luke Landes

In order to reduce my 2005 taxes a little, I decided to throw some of my self employment income into a SEP IRA. The great thing about SEP IRAs is that I can invest above and beyond the normal contribution limit for Traditional and Roth IRAs as well as beyond the employer 401(k) plan offered ... Continue reading this article…

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Raising Interest Rates

by Luke Landes

Everyone is affected by raising interest rates, but different people are affected in different ways. CNN Money describes how a typical American (homeowner, spender, etc.) is affected by interest rates. Interest rates are simply the cost of borrowing money; the prices paid by institutions trickle down to the consumer. So if you’re in the market ... Continue reading this article…

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Be A Financial Advisor

by Luke Landes

Money Magazine has ranked hundreds of careers and have decided that the job of Financial Advisor ranks third. That’s not too shabby. Here are the stats provided by the magazine. The average salary is $122,500, which is a little less than three times what my base salary would have been this year had I not ... Continue reading this article…

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Carnival of Personal Finance Thoughts

by Luke Landes

The Carnival of Personal Finance is up at MyMoneyBlog. If you’re interested in participating or hosting, more information is here and next week’s host is Five Cent Nickel. There’s a lot of discussion surrounding the Carnival these days. Much of it stems from the fact that the universe (specifically, the personal finance blogging universe) is ... Continue reading this article…

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Carnival of Personal Finance Needs Future Hosts

by Luke Landes

A lot of my regular readers here have blogs of their own, so this is for them. We’re looking for more hosts for the Carnival of Personal Finance, and the only real requirement is you have to participate in the Carnival occasionally. The slots are full until October, so if you have a blog that ... Continue reading this article…

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Verizon FIOS Driving Down Comcast Prices

by Luke Landes

Pkp646 asked in response to my latest Comcast adventure (which isn’t quite the latest — there’s something new I haven’t written about yet): I would be interested to know, Flexo, if there has been talk of allowing Verizon’s FIOS into your area. It seems that everywhere that they are trying to enter the field, Comcast ... Continue reading this article…

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How Liz Pulliam Weston Became a Millionaire

by Luke Landes

Let’s face it: if she (and her husband) can, you can, too! While acknowledging that a million bucks ain’t what it used to be, Liz, a columnist for MSN Money, shared her secrets about how her family’s net worth climbed to $1,000,000. There were no game shows or “reality” TV appearances. According to Liz, here ... Continue reading this article…

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