Why I Can’t Stand Most Personal Finance Magazines

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Every once in a while at the newsstand, I’ll pick up an issue of Kiplinger’s Personal Finance or SmartMoney, just to give myself something to leaf through while I’m waiting at the airport or something. Every time I do it, I wind up regretting it for three big reasons:

The absolutely overwhelming amount of advertisements. I picked up the June 2007 issue of SmartMoney and began to leaf through it until I realized I was mostly leafing through ads. In fact, at one point in the middle of the issue, there were twenty one straight pages of nothing but advertisements. Sure, there’s some good content in there, but this is ridiculous. If you want to see how a mainstream, ad-supported magazine can have a tasteful number of advertisements, look no further than The New Yorker; I had to open the magazine three times before I even saw an ad at all, and even then it was tastefully placed in only a single column. I had to actually browse the whole magazine to find a full page ad.

The incessant shilling for bad mutual funds. I’m not talking about the ads, I’m talking about the articles. Take a look at the June 2007 issue of Kiplinger’s Personal Finance and their list of the 25 “best funds.” Not a single index fund to be found; they’re all managed funds with relatively high fees compared to index funds. You’re trying to tell me that among the 25 “best funds,” there’s not a single low-cost index fund? Even better, most of the fund profiles were actually puff pieces about the greatness of the fund manager. Please. Show me a fund manager who doesn’t gouge the fund with a huge fee and matches or beats the market year in and year out and then I’ll pay attention.

The “guilt” factor The final straw for me is that neither of these magazines are really written with me in their audience. Most of the articles focus on personal financial issues for the upper middle class, particularly those in middle age. In terms of income, I’d probably not put myself in upper middle class (our household income is well above the median, but not incredibly high) and I’m definitely still a twentysomething, so many of the articles simply don’t match my reality. That’s a big reason why I started this site – I know a lot of people are much closer to my reality than the ones portrayed in those magazines.

I’m not saying that the content in these magazines is terrible; there’s a lot of good stuff in both publications. But when you get rid of the advertisements and the advertising copy for mutual funds that passes for some of the articles, what’s really left? Is it worth $5 to you? It’s not to me, especially when I can get similar material from reading personal finance blogs – they’re free and, if I want to, I can support those writers directly by giving them a donation or a micropayment for their efforts. To me, that’s a lot healthier writer-reader relationship.

If you dislike personal finance magazines so much, why do you review each Money issue? For the most part, Money avoids most of the traps I outlined above, though not always and not entirely. I compared my latest issue of Money with the two magazines above and I found that Money had a lower ratio of ads to content (though still too high for me) and when mutual funds were mentioned, they were all from a predefined set that they’d been following for years (the Money 70), which does include a number of low cost index funds. Plus, the magazine often has an article or two directly targeting twentysomethings in similar situations as mine, and also In short, I feel that they’re the best one on the market, so that’s the magazine I give my attention to; picking up the most recent issue of their competitors did little more than reaffirm that feeling.

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20 thoughts on “Why I Can’t Stand Most Personal Finance Magazines

  1. Even worse, many of the funds advertised in the personal finance magazines have sales charges (loads).

  2. I read them at the library or read them all for the price of a cup of coffee at the local bookstore.

    I don’t like most of the info these magazines give. Seems like all they do is recycle stories and are biased towards certain funds or companies that spend alot of money in advertising.

    Your mileage may vary.

  3. I hear you on those magazines. Generally, I feel the same way. I try to read a wide variety of publications — and need to know what is going on in the markets for my job.

    That said, I think that personal finance magazines have a variety of intended audiences. You may not be the main one — but you may be able to benefit from some of the ideas nonetheless. For example, you might not need to understand how to avoid AMT now, but some of the ideas in an article about it would be beneficial.

    It may not be “personal finance” — but there is some great info in the Financial Times, the Wall Street Journal, and even the Washington Post or New York Times. Expanding the universe of publications can open you up to other opinions, topics, and ideas.

  4. Yes, especially on the part about not being pitched to anything near an average income bracket.

    Then again while a few small time investors in those mutual funds may be in an average income bracket, the really big investors in those mutal funds, the ones the advertisers want, are not. So they pitch to their advertisers audience, which at the end of the day is not surprising.

  5. By the time you get to read an actual copy of Money Magazine, the information is already 30 days old. Thirty days in finance is a year in real time.
    I get all my financial information from the internet. You can read Money mag, NY Times and many other journals for free on the web. If I have to pay for the info, it’s usually not accurate. Or I go to my local library.
    I read financial content for a minimum of 3 to 4 hours a day! That’s a lot of reading. I’ve trained my eyes to avoid the ads.
    Fear is a big factor. Fear is pitched to the Baby Boomers (like me) all day long.

  6. I started subscribing to the Motley Fool newsletter its free after all:) Well it turns out it has nothing to do with investing and everything to do with signing up for one of there many many stock subscriptions services.

    If your a reader from Canada than I highly recommend Canadian Money Saver cheap and 100% Ad free

    As an aside

    If you are really serious about understanding the stock market than you need to take the time to read Benjamin Grahams classic. To be fair it’s not easy reading (get the commentary edition). I keep it in the bathroom and skim it as I’m doing my business. I may or may not read the whole book (up to chapter 7) but already I have learned a ton of stuff. Most important lesson of the book don’t get caught up in stock market mania. Quite appropriate as the DOW hits record highs daily.

    A tibbit I picked up. Yes the stock market has return X% over the last 100 years but most peoples time horizon is 20-25 years (40 to retirement) and over the last 100 years there has been 4 20 year time periods when the stock market went sideways. As well for the DOW to do what it did in the last 20 it would have to rise to 140,000. Quite unlikely I think. Hence the reason why I’m not interested in Capital Gains. My focus is on dividends How else can you earn 25-30% (per year)on your investment. To me a stock market crash would be a bonus, I can get my stocks on sale.

    note: as the dividend increases the dividend yield increases, my Dad has some stocks that he bought many years ago for under $10 with a dividend of 2-3 dollars or a yield of 20+ percent.

  7. I actually have a subscription to Kiplinger’s. It was offered at a dollar an issue for a year. I jumped because I liked to read a wide variety of things. I do get annoyed with all the ads though. 1/4 of the magazine is just ads. I also wonder if the magazine has a bit of favorable bias towards T.Rowe Price, because they have tons of ad space. I always notice they recommend a lot of T. Rowe funds.

  8. This is coming from someone who has over 40 different ads on his own website on every single page.

  9. Cheapest place for nearly ANY magazine subscription is ebay.

    I’ve even renewed my Wall Street Journal sub. for as little as $50/year using ebay.

  10. Personal finance magazines are a waste of time and money – unless you are sitting around an airport with nothing else to do than read.

    You’re right in saying better information is available either on the internet or in a handful of classics, including Security Analysis as mentioned by Rob above (although he might have been referring to The Intelligent Investor, Security Analysis is where it’s really at for the serious investor.) or books such as Your Money or Your Life (which I have not read).

    If you want up to date information on investing, a magazine is too slow. In depth business analysis or political/economic analysis is useful (ie BusinessWeek/The Economist/etc), but personal finance magazines are usually just a waste.

  11. I have similarly been disappointed with all the financial magazines I have seen.

    What bugs me is that the advice is on the next “in” stocks, as if their audience is day traders, but no day traders in their right minds would subscribe to a popular monthly magazine. (Maybe an exclusive monthly magazine!)

    The problem is that advice like buy index funds and spend less money is not very good for selling magazines.

    I like reading your reviews (totally painless!), but that’s about it.

  12. It’s pretty easy to compare index funds. For S&P 500 funds just go for the one with the lowest expense ratio.

    It’s true that index funds beat about 80% of actively managed funds because most funds are dogs.

    Of the remaining 20% perhaps half beat their benchmark by luck.

    The Kiplinger article attempts to identify the best of the remaining 10% of funds, those that add alpha.

    One example of a fund in that article that consistently thrashes its benchmark is the Loomis Sayles Bond fund, LSBRX (LSBDX is a better version with lower expenses but a high minimum).
    So if one wants bond exposure, why buy a bond index fund if one can own LSBRX?

    True, many of us don’t know about LSBRX and might buy a crappy managed fund that’s worse than the index fund.

    So the point of the article is to identify the really good stuff. And IMO many of the funds in the article are better than index funds. It doesn’t really matter how many crapola funds are out there if the few good ones can be identified. That said, one can’t go too wrong with index investing.

  13. Just like commercials on TV you learn to pass on by ads and ignore them. I think I counted at least 6 ad blocks/spaces on this web page alone + a donation link. At the end of the day people need to feed their families and I can live with that.

  14. Wylie – its not about the fund or type of fund you choose, its about how you have it allocated and sticking with it for the long term.

  15. You are right on the “Money” I had the same feeling when I picked up kiplinger and smart money. I do like Money magazine since its seems to be catering to someone withing my age group and interests. I am 29. Yes, there are lots of online sources, but I still enjoy the magazine at 10/year.

  16. I picked up a subscription to Money and enjoyed it very much. Not that you can’t find the information elsewhere, but it is written in a very accessible manner with personal examples and makes financial education “fun”. There are a number of times I’ve shared articles with friends and family who may not read a blog but would read a glossy article about it. Since the subscription was cheaper for the next year I’m switching my sub to Kiplinger’s. Reading these comments makes me wonder if I’m going to regret it (and miss my Money magazine).

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