Money Magazine – October 2007

MoneyThis issue actually happens to be Money Magazine’s 35th anniversary issue (incidentally, I happen to have the first issue as well), which means that (a) it’s thicker than normal and (b) there are some anniversary-themed articles inside along with the usual Money Magazine content. As usual, I’ll yank out the ten tidbits from the issue that really tweaked my interest.

Want to save money? Associate with people who don’t spend like crazy. Your friends are a constant guide for how much money you should be spending. If you find friends that are wisely frugal, your own spending will slow down – and you’ll wind up financially ahead. (p. 28)

If you plan on moving in three years or less, rent instead of buying. The costs associated with buying will eat up any potential equity gain you might get in three years, so you’re way better off renting in the short term. (p. 36)

Don’t rely on a life insurance policy through your workplace. This makes a lot of sense, but didn’t occur to me at first. If you switch jobs, suddenly you have no insurance and you’re older, which means a term policy will cost more. (p. 38)

If your mortgage company fails, don’t worry about it. Someone will buy your mortgage and chances are the servicing company (the place you send the checks to) won’t change. Even if it does, they’ll inform you by mail and you just change the address on the envelope (or on the online bill pay service). (p. 52)

The best time to buy financial stocks is right about now. Most financial companies are in good shape, but the subprime panic has led to a mass exodus and thus lower prices – in other words, bargains. (p. 59)

Unless you really know what you’re doing or you’re requiring them for income, you should always reinvest your dividends. A solid rule of thumb to follow for a long-term investor – I’m reinvesting every cent of my dividends. (p. 77)

Spend 30 minutes and make a video of your home. Make a clear video of all of your stuff and zoom in on the valuables so it’s clear what they are. Then take that tape and put it somewhere safe. Why? Insurance. In case of disaster, that tape becomes gold. (p. 81)

Americans aren’t better off now than they were 35 years ago. There have been advances, sure, but the losses are far worse than the gains. They seemed to try really hard to make it seem more even than it actually is. (p. 110)

Don’t judge your financial status by comparing yourself to your neighbor. There’s a good chance that what their financial situation appears to be is far different than what it actually is. (p. 126)

Unless you’re an art dealer, don’t buy art as an investment. Instead, choose items for their aesthetics and don’t worry about profit at all. (p. 137)