As featured in The Wall Street Journal, Money Magazine, and more!

June 2006

Upside-down carA few years ago, I woke up. It cost me more to go to work than I was making, thanks to commuting, living expenses, and a non-profit salary. I was the one not profiting. Life was great when I simply ignored the mounting debt. There was only so long that could last, though.

There are many people who now may be in a similar situation, in which life is better when you ignore personal monthly losses. Society normally allows people to do so thanks to public acceptance of debt. Some people may not realize their condition until they try to make certain financial transactions, like buying a house or selling a car. [click to continue…]


It seems that Warren Buffett is domainating the news lately. According to Fortune Magazine, he’s planning to give away 85% of his wealth, mostly to Bill Gates through his foundation.

Buffett has pledged to gradually give 85% of his Berkshire stock to five foundations. A dominant five-sixths of the shares will go to the world’s largest philanthropic organization, the $30 billion Bill & Melinda Gates Foundation, whose principals are close friends of Buffett’s.

Although Buffett has said he plans to give away his money at death, it seems he’s revising his plan. From an interview, here’s what Buffett says about he and his wife (Susie) giving money to their kids before their foundations:

Certainly neither Susie nor I ever thought we should pass huge amounts of money along to our children. Our kids are great. But I would argue that when your kids have all the advantages anyway, in terms of how they grow up and the opportunities they have for education, including what they learn at home – I would say it’s neither right nor rational to be flooding them with money.

Interviewer: From the fact that you’ve given your kids money before to set up foundations and are planning to give them more now, I gather you don’t think that kind of flooding them with money is wrong.

No, I don’t. What they’re doing with their foundations is giving money back to society – just where Susie and I thought it should go. And they aren’t just writing checks: They’ve put enormous thought and effort into the process.

I’m very proud of them for the way they’ve handled it all, and I have no doubt they’re going to keep on the right track.

Not only does Warren Buffett have enough money to fund his foundation and give to others including Bill Gates’ foundation, he also has enough to pass along to his children so they can manage their own foundations. That is pretty impressive, but what’s more impressive is that the money is used for the improvement of society in some form.


ScreechYou may remember Dustin Diamond as “Screech” from the television show, Saved By The Bell. I heard about his situation a few days ago. He appeared on Howard Stern’s satellite radio show and begged his fans to buy his tee-shirts so he could pay off his house, as he has run into sorry financial times.

I have a real problem with celebrities asking for money from their fans. He purchased a $500,000 house in Wisconsin, and he should be responsible and move out if he can’t handle the payments.

Apparently this is not the whole story. His parents mismanaged his earnings when he was a child actor and allegedly stole money from him. With Dustin’s bad credit, he wouldn’t qualify for a tranditional mortgage “quick enough,” so he decided to enter a “land contract.” Here’s his side of the story.

The owner of the contract supposedly wants the house back and has called the loan. Now Dustin has two weeks left to come up with $250,000. I do feel a little sorry for him, but it sounds like he jumped the gun and purchased a house before he was ready.

So what is a “land contract?” I didn’t know until I looked it up.

A land contract, which is more common in the mid-west, involves a seller who finances his property to the buyer. The buyer can place a smaller down payment than a bank would require, and then makes regular payments. The seller remains the legal owner of the property while the buyer owns the equity and qualifies for the tax benefits one would find in a regular mortgage.

In some cases, and apparently in Dustin’s case, the seller can foreclose out the buyer quicker than a bank can foreclose a typical mortgage.

Dustin is hoping there are thousands of Screech fans out there, ready to buy tee-shirts and pay off his contract in the next two weeks.


Yesterday, I wrote about three mistakes in retirement planning an AARP financial professional made in his own life. Today, I’ll continuee with the next three points from the original Yahoo Finance feature.

These are three additional actions or attitudes you should not emulate: [click to continue…]


Don’t Make These Mistakes, Part 1

by Luke Landes

Stan Hinden from AARP shares six retirement mistakes he made throughout his life in addition to a pair of better choices. Here are some thoughts on three of those mistakes.

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The Real Estate Cartel?

by Luke Landes

The Consumer Federation of America issued a report declaring that the real estate brokerage industry acts as a cartel to set prices unfairly. Here’s the full report [PDF]. “Many traditional real estate brokerage firms, and their organizations, function as a cartel that tries to set prices and restrict service options,” said Stephen Brobeck, CFA’s Executive […]

4 comments Read the full article →

Carnival of Personal Finance #53

by Luke Landes

Welcome to the anniversary edition of the Carnival of Personal Finance! What a year it has been. The first Carnival of Personal Finance was posted on June 20, 2005. To celebrate the Carnival’s first birthday, I asked participants to submit two articles: a recent favorite as usual and one of their favorites from the past […]

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You Won’t Be Rich, Maybe Just Solvent

by Luke Landes

Jeanne Sahadi has a tendency to bring people back to reality, and she does so nicely with her latest commentary, the Not-a-millionaire guide to financial security. She points out that getting rich is pretty difficult unless you’re an investment banker or venture capitalist. If you try to live like you’re rich before you are, you’ll […]

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Bill Gates is Out! (How You Can Start a Foundation)

by Luke Landes

Microsoft announced today that Bill Gates will be leaving the company in July 2008 to concentrate on the Bill & Melinda Gates Foundation, which currently has $29.1 billion in assets. Have you ever considered starting your own foundation? According to the Washington Regional Association of Grantmakers, if you meet the following qualification, starting a foundation […]

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Getting Paid for Changing Your Flights

by Luke Landes

I’ve heard stories about people receiving various perks from airlines in return for giving up their seats on overcrowded flights. I never attempted this myself, but now I know there is a method to perk offerings, I may try to work the system if I find myself on a tight flight. Here are the tricks […]

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