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October 2006

The Balanced Life Center is organizing a “Season of Gratitude:”

The Season of Gratitude, is a consciousness experiment of sorts to see what can happen in our lives individually and collectively when we focus on what we enjoy. It will run from October 24th through November 22nd, 2006.

This sounds like a great project leading up to the Thanksgiving holiday in the United States. I’ll be participating over the next few weeks in some form.


After recently finishing the last of my formal education (so far), I was able to consolidate my student loans. I received two pieces of information in the mail from the lender, one good and one not really that good. First, the good news.

You are eligible to receive a 0.25% interest rate reduction when you enroll in our automatic payment program… Enrollment will save you both time and money, and will prevent any delayed or forgotten payments.

This would lower the interest rate from 4.25% to 4%. That’s a good deal. However, another piece of mail — you know, they could probably lower their interest rates further if they’d stop wasting so much paper — makes me want to accelerate my payments as quickly as possible.

The lender has provided an amortization schedule for the approximately $20,000 I have in student loan debt (outstanding undergraduate loans plus graduate loans I didn’t pay back with my reimbursements). Even with a cool 4.25% interest rate, after the twenty-year schedule they suggest, providing a monthly payment of $127.04, I will pay $9,973.84 in interest before this loan has completely disappeared.

That is way too much money to spend on interest in my opinion. While some people say it’s not horrible to carry debt at favorable rates, and I may agree in some cases, I need to find a balance in order to avoid the interest payments that add up to a massive amount year after year.


Hedge Funds for DummiesAnn C. Logue is the author of Hedge Funds For Dummies, which was recently released. She contacted Consumerism Commentary and offered to send a book for my review. I’ve been interested in hedge funds, and specifically in what individual investors can learn from these investments which are normally closed to everyone but very high net worth individuals and organizations. I agreed to review the book, and Logue has provided an excerpt: Read the full article →


Baby with credit card and phoneThrough some discussion about placing blame for poor money management, we managed to gather several differing opinions about the source of the problem. Kids with no skills and parents who don’t teach seemed to be the biggest culprits, followed by schools without money management classes (which, when attempted, do more harm than good), and finally if at all, the credit card companies.

We have a litigious society in which people like to displace blame to corporations, who have the big packets to pay for damages, yes. And on the other hand, we have people who believe companies should promote their products however they want, and blame falls squarely on those naive enough to believe the advertisements.

An article in the latest issue of the University of Illinois Law Review says that credit cards, by design, take advantage of deficiencies in the human brain. (Link courtesy of Consumerist.) Here’s a summary of the author’s problems with credit cards:

* Banks that offer loans screen applicants thoroughly but much less rigorous screening takes place when those loans are in the form of credit cards.
* Individuals that take advantage of banks’ products, such as loans, are penalized by higher interest rates on their credit cards.
* Marketing techniques and inventives are designed to encourage debt.
* Credit card payments reduce sensitivity to price and promote impulse buying.

I am living proof that humans can break down the cognitive barrier that credit cards are designed to manipulate; if it weren’t for credit cards, I wouldn’t be earning cash back on every purchase and several recurring bills.

Yet, perhaps I do spend more because of my access to credit than I would otherwise. That may have been true several years ago. Once again, I’ll use my notebook computer as an example. Five years ago, I used credit to buy my current laptop, which recently died. Prior to the purchase, I had been doing web design work on a friend’s computer, but thanks to a day job where I was earning less than the cost of employment, I was having a little trouble locating cash.

I purchased a $1,500 computer — definitely not top of the line — on 0% credit, offered to me at the store where I was making the purchase. This provided me with a way to do web development without bugging my friends. As it happened, I also installed on this computer Moneydance, and later Microsoft Money, and managed to work my way into a better financial position after I saw the numbers were actually going down each month.

Now, when I buy my new notebook computer, it will be with a cash-back credit card, but I’ll be able to pay the entire balance off with cash when the payment is due.

The questions remain: Am I truly “beating the system” (I haven’t paid an interest charge or late fee in years) or am I still a victim of the credit card companies’ design despite my apparently intelligent use of credit? Are there any victims of credit cards or do people really have more control than this article claims?


If You Like Calculators, You’ll Love This

by Luke Landes

When I was a little kid, I had this relatively large, yellow calculator. I had no idea what it was called until I did a little Internet research yesterday. I matched photographs until one jogged my memory: the Little Professor Calculator (more info). Not only could it perform the basic arithmetic functions (I think), but ... Continue reading this article…

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Money Magazine: 25 Rules to Grow Rich By, Part 5

by Luke Landes

We’ve finally come to the last installment of Money Magazine’s 25 Rules to Grow Rich By, which has a catchy title, but is more or less just a list of “rules of thumb” that may or may not be applicable to any one individual. And let’s face it, you are all individuals. (Yes, we are ... Continue reading this article…

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Updated the Value of My Honda Civic: $11,767

by Luke Landes

A few hours ago, I checked Edmunds.com to get an updated on the street value of my 2004 Honda Civic LX 4-door sedan. Once again, despite a later date and a higher number of miles, the value has hardly changed. At the beginning of the year, the car was valued at $12,074 for private party ... Continue reading this article…

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WordPress Time Zone Problem

by Luke Landes

Here in the United States, most people should have turned their clocks back one hour this morning to revert to standard time. WordPress users will have to change their time zone in their settings to reflect the change. I live on the east coast of the United States, so I have to change my WordPress ... Continue reading this article…

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This Week’s Blog Roundup

by Luke Landes

Here’s what I’ve found interesting in the blogosphere in the past week. * Blueprint for Financial Prosperity describes his credit card strategy. * AllFinancialMatters wonders who pays $300 for a purse. * FiveCentNickel is looking for recommendations for noise-cancelling headphones. * Free Money Finance has some thoughts about socially-responsible investing. * Mighty Bargain Hunter wants ... Continue reading this article…

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Want to Be an Investment Banker? Read This.

by Luke Landes

Alcoholism. Depression. Heart disease due to stress. Delusions of failure. If you’re on the path to become an investment banker on Wall Street, this is what you have to look forward to. Yes, you’ll make tons of money and your materialistic friends will silently envy you while despising you, but what use is money if ... Continue reading this article…

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Focusing on More Than One Interest Improves Your Brain

by Luke Landes

Those who study music have known this for years. The discipline and dexterity required to learn a music instrument to intermediate to advanced ability affects the brain such that the performer builds skills useful in areas other than music performance. Fortune Magazine says there’s more evidence that cross-training makes you better at everything you do, ... Continue reading this article…

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Money Magazine: 25 Rules to Grow Rich By, Part 4

by Luke Landes

Money Magazine came up with 25 “rules of thumb” that will help your grow rich, albeit very slowly. Rules of thumb are often appropriate only for a fictional “average person,” but they can be good starting points for determining what is the right choice for any individual. I’ve looked at the first fifteen so far, ... Continue reading this article…

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I Can’t Find an Inexpensive Flight

by Luke Landes

I’d like to visit my family in Orange County, California for Thanksgiving this year, but I may have waited too long to book flights. The least expensive flight from the New York area to Long Beach or Santa Ana, traveling from November 20 to the following weekend, is around $600 for the round trip. LAX ... Continue reading this article…

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Circuit City Wouldn’t Allow Me to Buy the Computer I Wanted

by Luke Landes

I’ve been planning since the middle of August to buy a new notebook computer to replace my five-year-old Fujitsu C-6631 1 GHz laptop, which is finally presenting operational problems. Well, purchasing a new computer isn’t easy. I want to spend between $1,500 and $2,500 and I want these features in addition to the standard wireless, ... Continue reading this article…

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I Am Apparently Not on the Path to a Comfortable Retirement (Win $50,000)

by Luke Landes

So one of Consumerism Commentary’s new sponsors, Nationwide, has an interactive tool that asks a few questions and determined if you are on the path to a decent retirement. It’s a Flash-based tool with an annoying talking character (who you can mute if he or she starts to annoy you, too). The questions are meant ... Continue reading this article…

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Money Magazine: 25 Rules to Grow Rich By, Part 3

by Luke Landes

Last week, I started a short series looking at Money Magazine’s 25 rules to grow rich by. I’m breaking down the advice within the article into five separate blog entries here; you can find part one here and part two here. Here are the next five tips, with a bit of my own commentary thrown ... Continue reading this article…

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Great Blog Articles From This Past Week

by Luke Landes

Here are what my friends in the personal finance blogosphere have written this past week, starting with the MoneyBlogNetwork bloggers: * Jim from Blueprint wrote about inflation’s role in the debt vs. save question. * FiveCentNickel wonders if ethanol is as beneficial as the Bush administration says. * Free Money Finance takes a look at ... Continue reading this article…

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Ford Taurus Will Cease to Exist

by Luke Landes

Ford is closing down production of its Taurus model. When the 1999 model came out, I was finishing college, and I thought it looked neat. I actually thought I might have liked to own and drive one. I had less knowledge about cars back then as I do now, which isn’t saying much. My girlfriend ... Continue reading this article…

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ETFs: A Better Way to Pick Stocks

by Luke Landes

Money Magazine has another impressive article: Perfect Your Portfolio takes a look at Exchange-Traded Funds (ETFs). ETFs are good for lump sum investing in a particular sector, and the article suggests targeting sectors that have poor recent performance with the idea that they will revert to the mean, providing a decent increase. ETFs are bad ... Continue reading this article…

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Student Loans Consolidated, Finally

by Luke Landes

I initiated the process to consolidate (again) my student loans in June, anticipating the completion of my Master’s degree in August. After a long delay, my outstanding loans have finally been refinanced as of October 10 at a fixed rate of 4.25 percent. Now comes the fun part: finding money to pay it off, and doing ... Continue reading this article…

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