Financial Reference

What is the difference between a writer like Jeff Opdyke or Jonathon Clements (for the WSJ) and other writers who choose to blog?

I think the biggest difference is: we still have day jobs. It’s easy to see this difference because they (at least Clements) has research, references, and interviews to back up his entries. Also Clements often writes more technically than bloggers.

Maybe the question is: what is the difference between Jeff Opdyke and a blogger. Honestly, I can’t figure it out. The only difference I can see is that he is employed as a writer, we are not. With his most recent titles: “You’ll play baseball and like it,” “Before ‘I do’…Don’t Do This,” and “How to Haggle for that Ride” it seems as if he’s just a blogger in corporate clothes. (By the way I didn’t stop that list because I got to an interesting story; I’m stopping because I have a day job and don’t have the time to continue.)

My wife and I used to religiously read the “Sunday Journal” but it soon became a waste of time because we ended up spending the whole time criticizing Opdyke’s empty entry.

Recently, the Journal ran an article criticizing blogs and posed the question whether blogs were a legitimate way to make money in the long run. I don’t know the answer to their question because it’s much too early to know the future of the blog. The question I do have is: what is the future of their own blogger?

It is extremely common for people to want to keep up with their neighbors, coworkers, and friends. From their income, to the house they live in, the vacations they take, and the cars they drive. More recently this need to keep up has extended to their net worth as well. While emphasizing net worth is far more productive than emphasizing material possessions, the recent trend is nontheless, disconcerting. In addition, the recent trend has not displaced the emphasis on income and material possessions; it has just added another pressure. And the information age has provided new ways of comparing ourselves to our cohort.

Instead of coveting the new lawnmower our neighbor bought, we can now compare our income, wealth, and possessions with those all over the nation (and world, should we desire). For example, the other day one of my wife’s coworkers wanted to know the address of the new home we are building. He was hoping to plug in the address into an online database, such as zillow.com and find out how much we paid. While the information has always been public, it was not worth the time (or presumably the awkward confrontation later) to look up the records. Now, with easy access to information and a thirst for a better understanding of where we stand, we can compare ourselves to our neighbors, coworkers, and friends without their knowledge or permission.

For another example, many financial blogs are more than willing to share their net worth, including all assets and debts. Many also share their net income. I understand how it can be intriguing to view someone else’s financial condition; it’s a form of financial voyeurism. But I will not join this trend - I will not share our financial information over my blog for the following reasons:

(1) Besides our basic curiosity and a thirst for information, there is no financial knowledge imparted from knowing what someone else has accumulated. I can tell of all of the financial moves I have made that have been successful without giving numbers.
(2) It is private and I would rather keep the details to my family.
(3) It encourages people to think about their short-term wealth goals. If you track your net worth on a daily basis, you will be more likely to put more emphasis on the short-run. This could lead to trying to decrease daily fluctuations instead of building long-term value. Instead of investing, it could lead to trading more and an increase in “investing” in cash.
(4) I would feel less safe putting my financial information on the web.

I assume some financial bloggers report their financial information to encourage themselves to save. If they are being watched, they are more likely to perform. I, on the other hand, am cheap enough as it is. (I like the word “frugal” better, but those who know me best think “cheap” is more accurate.)

With so much more information at our fingertips, it is easy to get caught up in who is making what, who has what house, and who is worth how much. I will be the first to admit that I am just as curious as the next guy — I buy the Forbes list of Billionairs magazine each year, I watch shows about houses I could only dream about affording, and I want to go to zillow.com to check out how much other people spent on their homes. But, I don’t gain any knowledge from satisfying this curiosity. So, I will not be adding any new information to this financial voyeurism and I will give my neighbors, friends, and coworkers their privacy, unless they choose to tell me their finances.

I’ve struggled a lot lately with trying to decide what time is worth and how to spend it. I’ve looked at the MSN calculator and discovered (as depressing as it was) that with the time I put in outside of standard work hours, I made about $8/hour last year.

The additional time was a combination of overtime (unpaid, of course, since I’m an exempt employee) and the time spent trying to get my creditials so that I can keep my job. Now that I have a new job, I have very little overtime requirement (if any) but I still have to study – which works out to an additiona 15-20 hours a week, year round.

Eventually all the additional studying will pay off; I realize that. But for right now, it’s frustrating to have the very helpful calculator tell me that I could be making more working at Target. Of course, the calculator isn’t taking into account that there are future rewards built into the additional time I put in now, and that as soon as I stop studying, I’ll be putting in 1/3 less time on the average week.

Between Brian and I, we have roughly 5 jobs. We both work normal full time jobs, a partner and I have a wedding photography business, Brian teaches two nights a week at a community college (although this one is over in a couple of months) and then he manages money for a couple of his friends.

Which leaves just enough time in the day to play with our son for a couple of hours in th evening and get about 7 hours of sleep at night. We’re busy.

Not to say that there aren’t hours that are wasted – we still find plenty of time to get our money’s worth out of our netflix subscription. I still manage to lose a little money every week playing poker, and Brian still manages to keep up on most major sporting events.

In the end, we’re really just trying to reach our employment goals. We’d both love to be self-employed (separately – we’ve tried working together before). I’d love to find a job that I can mainly do from home. We’re trying to remember that though the we might not be making a lot on an hourly basis right now, we’re building a good foundation for later.

Brian and I both have decent sized incomes and, before we merged our finances, I was really into using quicken (updated every other day or so) and paid my credit card bills weekly (a little complusive, I know). I was into it. I was all about being financially responsible. Other than a few (or not so few) dvds that I had the habit of buying, I saved the rest of my money and had just a little student loan (at 3.75%) when we decided to merge our income streams.

And now? I have no idea about any of it, and I’m okay with that. I couldn’t tell you when our bills are due or which credit cards we’ve used to finance things at 0% or which card we use to pay daycare. I stay out of it.

Why? It’s not because Brian makes more money, though he does.

I think that it stems from the fact that he had more of a plan for our financial future, while I just had some vague notion that I needed to save a lot and keep out of debt.

Brian, on the other hand, had a good idea of when he wanted to retire, what sort of funds needs to be available for that, and a better idea of what to do with the money in the meantime other than let it sit in a savings account.

This isn’t to say that we’ve agreed on everything. I didn’t even want to merge our finances at the beginning – nor have we ever really agreed on our level of risk tolerance, though I think we’ve made some big strides towards a happier middle ground.

I tend to be more emotional about money matters – to me, money means security.

Brian tends to have a more objective view of the whole financial situation.

So after many arguments about it, I’ve let go, for the most part. I still check in on our investment account and I love to watch my 401(k) grow. And the money that’s earmarked for our son is in my name, though Brian picked the funds for that as well.

I do, however, have some idea of where to find the financial information, if I wanted to. There are spreadsheets on his computer and a couple of drawers in the desk that have the majority of the papers. And every once in a while I ask for an update on where we’re at.

It works for us, for the most part. I’ve gotten over the fact that someone else can see every purchase I make, but that shouldn’t stop me from making them (within reason) and I think he’s gotten to the point where he doesn’t need to question every small purchase.

It works for us.

A very long but good list of the top 100 April Fools Jokes. Nothing to do with finance, but even finance dorks have to have fun every once in a while.

http://www.museumofhoaxes.com/hoax/aprilfool/

“The art of being wise is the art of knowing what to overlook” – William James

Even for long-term investors, it’s hard to ignore the short-turn fluctuations of the market. I do something I don’t recommend — I put the stocks we own on our “My Yahoo” home page. So every day(actually, every couple of minutes), my wife and I can see how our day was financially.

The short-term changes in stock market value is just noise. Noise that distracts from accumulating investment knowledge.

In the future, I’m going to try to keep price information as far away from myself as possible. I recommend you do the same.