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Wall Street Journal Sunday: Bloggers Put the Personal in Personal Finance Sites

By Andrew Blackman
July 17, 2005

Blogs are not just about diaries and gossip. Amid the political rants and cat photos lurks some solid personal-finance information. The challenge is sifting through it all. Here’s how to find personal finance blogs, what you can glean from them, and how to make sure you don’t follow bad advice. A blog, short for “Web log,” is like a regular Web site, except that it’s easier to update. Bloggers can post new information on the site multiple times in one day, and visitors can type in comments and see them instantly published on the site.

There are now roughly 12.5 million blogs, up from about six million four months ago, and almost 100,000 new blogs are created daily, according to estimates from blog search-engine firm Technorati.

Personal-finance blogs are still a blip in the blogosphere, but are growing fast — Technorati estimates there are about 5,000 of them, up 40% from six months ago. Some are written by financial pros and offer advice on financial planning; others provide links to and commentary on financial news; and many are chronicles of the writer’s personal triumphs and failures.

In the professional category, for example, there’s SeekingAlpha.com, the brainchild of former Morgan Stanley analyst David Jackson. It’s actually a collection of different blogs covering topics like Internet stocks, exchange-traded funds and investing in China. One section, www.SoundMoneyTips.com, offers one simple financial tip every day.

On the personal end of the spectrum is a site like PFBlog.com, whose writer aims to retire with a million dollars by the age of 36. Every month he posts updates on what he spent during the month, how much he saved and how his investments performed, and between the monthly updates he discusses other financial issues in his life.

He’s currently in his late 20s, has amassed $231,119, and says he’s saving so fast that his original goal of retiring by 40 was “no longer a challenge at all” and he shortened it to 36. Many other blogs are in the same vein, such as MyMoneyBlog.com and ConsumerismCommentary.com. The latter is very detailed: You can see, for example, that the writer spent $309.59 on eating out last month, but just $73.69 on groceries and $10 on “personal care.”

Other blogs concentrate more on providing articles and links, rather than giving out their own financial information. The blog www.FreeMoneyFinance.com is a relatively new one whose writer posts several times a day on such topics as buying a car (July to October is a good time because dealers clear out inventory to make room for the new model year).

Once you’ve found a few blogs you like, finding more is easy: Most sites have a “blogroll” on the righthand side of the page, linking to their own favorite blogs and sometimes explaining why. And you can also use traditional search engines like Google.com, or ones specializing in blogs, like Technorati.com.

Of course, as bloggers admit, you need to take much of what is written on blogs with a grain of salt. After all, many bloggers post anonymously, especially those dissecting their own finances, and there’s no guarantee they know more than you do.

“You have to consider the source of the information before you make any decision based on it,” says the 29-year-old accounting associate in New Jersey who is behind Consumerism Commentary. “For someone looking for advice, I’d suggest they don’t go to blogs. Go to a financial professional.”

Nevertheless, there are some things you can do to check out the information you find on blogs. Most good bloggers, for instance, will link to the source of any quotes or data they use, so you can judge for yourself whether it’s credible. As for bloggers themselves, their popularity can be a good guide: People will stop visiting or linking to a blog if it gives out bad advice. Technorati.com and TruthLaidBear.com both rank blogs on the number of people linking to them.

Despite the difficulties, blogs have some advantages. One is immediacy: A blog post can be published in seconds, as can reader comments, and the most recent post appears at the top of the page so it’s easy to see at a glance what the latest news is. A good blogger will also act as a filter of all the stories on the Web, and will comment on them or post links to alternative points of view.

And finally, the personal nature of blogs affords an often fascinating and instructive glimpse into other people’s lives. “You’ll get a real sense of honesty,” says the writer of Free Money Finance. “This is real people, dealing with real financial issues, and they’re writing from their own experience.”

If you get hooked on blogs, you could even start your own. It’s easy — and free — using services such as Blogger.com, LiveJournal.com and Xanga.com. And you might find that being a personal-finance writer teaches you more than any amount of reading could.

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