Money Magazine – July 2007

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Money Magazine logoThe July 2007 issue of Money Magazine has a nice big cover story on entrepreneurship, a topic that interests me more and more as I grow older and start to create more revenue streams. As usual, though, the issue had a lot of interesting points inside – here are ten that really stuck out at me:

Traveler’s checks are pretty suboptimal in the modern era. Their fees are really high compared to ATM usage. If you’re going to travel internationally (particularly to Europe), just get cash with your ATM card and if you want an emergency reserve, just sock away raw cash someplace safe. (p. 21)

When you’re interviewing for a job, tell a story. Go in there ready to tell a story about your biggest success at your previous job. Better yet, have two or three. Then, when the opportunity presents itself, tell the story – it will do wonders to sell you to the interviewer. (p. 22)

You can do much more with your charitable donation and time if you focus on one charity rather than several. It takes a lot of people making small donations to have the same impact of one person making a solid donation of time and money, so if you really want to help out a charity that really means something to you, focus exclusively on that charity. (p. 34)

If you get a big inheritance, don’t spend it right away. Sit back and actually look at where to put it – you should also contact a CPA and figure out the tax implications before you do a thing. (p. 39)

Why would you want a financial planner? I still don’t understand why a financial planner is useful for anyone who isn’t worth well into the eight figures. With anything less than that, you can easily manage it yourself without a planner eating you alive for the sake of their own profit margins. (p. 43)

The S&P 500 may still be undervalued, after four years of a bull market. I still don’t feel great about investing in stocks right now, but the magazine makes several good points, including the fact that the S&P 500 is still undervalued (a lower-than-average price to earnings ratio compared to the historical average). Interesting… (p. 60)

A diversified portfolio is better than simply investing in what you know. Some investment gurus preach about focusing your investments on what you know, but it turns out that you’re far better off investing in a broad array of things. Another thumbs-up for broad based low cost index funds, I guess. (p. 66)

Their entrepreneurship guide overlaps with most of my guide to self-employment. Much of the same advice is focused on: get your business started while you’re still employed and plan very carefully to make sure you aren’t making a financial suicide leap when you do quit. (p. 81)

People who marry solely for money have issues. Thankfully, the article on how to marry a billionaire was done entirely tongue in cheek (I hope). (p. 94)

Whole Foods isn’t perfect. It’s basically an organized farmer’s market and offers an abundance of organic produce, but that doesn’t guarantee that everything on the shelves there is wonderful. Honestly, I prefer actual farmer’s markets – the prices are better and you actually get to meet the people that make the food. (p. 114)

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10 thoughts on “Money Magazine – July 2007

  1. I think you’re confusing financial planners and money managers. Not all financial planners make money by either selling products or charging you a percentage of income to manage all your money. You can find fee-based planners and hire them to work on a single project.

    A fee-based planner can help you assess whether your retirement plan is on track and discover flaws you might not have seen. If you receive an inheritance, they help you determine how to manage it. They can help you create a plan to send a child to college and have a healthy retirement while also protecting against losses from illness. If you plan to start a business, a financial planner can help you determine if your business plan is solid and you have the necessary resources to support it before it becomes profitable.

  2. Did Money magazine say anything about how to do the entrepreneur thing with no money and no credit?

  3. Expand your research and look into other index funds, the S&P 500 is limited to 500 companies. The Wilshire 5000 gives you a broader exposure across 5000 companies. They both have returned almost the same amount for the past 20 years. Maybe give or take 5% difference here and there. Even Goldman Sach and Morningstar have pretty good indexes.

    Indexes are still a good investment place to start with, just don’t limit yourself to the S&P 500 because the herd is following it. The European index is doing far much better than S&P 500 and we are 10 times bigger than Europe. That should raise your eyebrow.

  4. The advice on inheritance is good. My husband and I have received a few smallish inheritances over the past 15 years. We still have 90% of the total funds because we took the advice of a good book — The Inheritor’s Handbook — which basically says to give yourself a little spree to avoid a really big, stupid spree.

  5. On your comment about financial planners… I applaud you for being so financially educated, but not all of us are. Why would I be reading your blog if I was? I just hired a financial planner and he gave me some excellent advice about where to put my money, how to invest for retirement & to fund my kids educations, along with many other things. He will also be managing my investment account which I have neither the time nor the ability to manage myself, and the only profit he makes is off the profits he makes for me. What’s wrong with that? I couldn’t come close to getting the returns for myself that he has gotten for his clients mainly because I’m an infant when it comes to understanding the market. I think hiring him was one of the smartest financial decisions I have made and I’m worth nowhere near 8 figures! My $0.02.

  6. @ TheLocoMono

    Actually, the Wilshire 5000, despite its name, tracks the entire US Stock Market.

  7. LocoMono: I was merely reporting on what was stated in the issue – they literally state that the S&P 500 is undervalued.

  8. Regarding travel and ATMs — make sure to check with the card issuer that your code will work overseas. This only take a few minutes, but there are a few countries/ATMs/cards which don’t always match. Also, check the country profiles on http://www.state.gov for any particular scams. (or is it http://travel.state.gov? Oh, well — you’ll find it.

  9. I wish I could find a good financial planner/income tax preparer. We tried one who turned out to be just an expensive ditherer. I’d like validation of our plans and investments and information on tax planning and returns — banks and Canada Revenue keep giving conflicting information. I find a lot of the rules, regulations and information mind-boggling. I don’t have a financially clear state of mind.

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