Just a quick note that I finally updated this site’s design after many, many years. The primary goal of this redesign was to improve usability and readability across modern computer screens, which now span from 30″ widescreen monsters to 3.5″ smartphones. I’m also trying to improve navigation so that readers can easily find the more timeless posts amidst the many other time-sensitive posts. I still have a lot of work to do by going through my archives and cleaning things up.

Please let me know if anything is broken or just what you think of it. Thanks!

Money management website Mint.com recently did a brief interview with me, although we did cover a variety of topics. Here’s the link:

Personal Finance Interview with Jonathan Ping on Money Management

I’ve been getting my butt kicked by a bout of food poisoning, so posting will be light this week. Fever, chills, sweats, and I haven’t been able to keep down any solid food in over 48 hours. Blech.

Here are some more links worthy of sharing:

The Overjustification Effect
A smorgasbord of behavioral psychology that questions the idea that there is nothing better in the world than getting paid to do what you love. This is a very complicated topic but the article makes some good observations.

Memory as a Consumer Durable (Atlantic)
Another twist on the whole “buy experiences, not things” theory. What if you treated a memory as “consumer durable” good much like refrigerators, furniture, or a car? In similar ways, they provide constant satisfaction and/or pleasure, and they last a very long time. In that case, should we acquire them while we’re young so we can enjoy them the rest of our lives?

Stable value 2.0, fewer investor guarantees (Reuters)
If you own a stable value fund in your retirement plan, you should check to see if changes were made to any of its principal guarantees.

The 401(k): Americans ‘just not prepared’ to manage their own retirement funds (WaPo)
401k were designed to be a supplemental account to pensions, but now they are a replacement. If you know what you’re doing, it’s good, and it’s nice because you can take the money with you across jobs. But the total account balances are nowhere near what people need to retire as a whole. Maybe we need something else.

“If the 401(k) is supposed to be the primary retirement vehicle for the average American worker, then it needs to be consistent with the information and financial ability of the average American worker, who is just not prepared to manage funds like that over the course of a lifetime.”

GMO 2012 1st Quarter Letter
The most recent letter from Grantham talks some sense about why most managers can’t afford to have the proper long-term mentality for market-beating returns.

…ignoring the volatile up-and-down market moves and attempting to focus on the slower burning long-term reality is simply too dangerous in career terms. Missing a big move, however unjustified it may be by fundamentals, is to take a very high risk of being fired. Career risk and the resulting herding it creates are likely to always dominate investing.

CarrierCompare: The iPhone app your carrier doesn’t want you to see (CNN)
An iPhone app that takes data (signal strength, response time and speed) from users and analyzes it together to find which carriers have the best service and coverage for any given area. (Update: Apple has since removed it from the App Store.)

The Perils of Paying for Status
An article in Scientific American magazine about our desire to feel powerful and achieve social status affects our decision-making. If you’re feeling insecure, you’re more likely to overpay for products and/or buy more stuff than you need. Simply knowing this common weakness may help you spend more wisely in the future.

Nutella Class Action Lawsuit
Nutella calls itself healthy, when in fact the first two ingredients are sugar and vegetable oil (fat). Class action lawsuit ensues. Lawyers get rich. Regular folks who bought the stuff can get $20 with a claim, with no proof of purchase required. If you’ve ever bought Nutella spread since 2008, you should check if you’re eligible.

Social Security and Medicare: Proper Planning Pays Off Big
I’m not an expert on this stuff, but this Morningstar article seems to do a pretty good job of summarizing the ways to maximize your Social Security and Medicare benefits and minimizing any penalties.

I Quit My Passion and Took a Boring Job
A guest poster at GetRichSlowly shares his story of quitting a job he loved (teaching high school math) and taking on a job that pays the bills (accountant).

Bestselling book’s financial promises don’t add up
Allan Roth at CBS Moneywatch does a great job debunking a “bestseller” book that is one of many misleading scams that pushes whole life insurance as “infinite banking” or “make your own bank” as a good way to build wealth. It’s a great way to build wealth, but only when you’re the one selling the whole life insurance!

What Does the Prudent Investor Do Now?
WSJ article by author Burton Malkiel about his outlook on stocks and bonds. If you can’t read it directly, try here and click on the first result.

In today’s environment, the minimization of investment fees is more important than ever. A 1% investment management fee may appear to be very low when measured against assets. But when measured against a 7% equity return, that fee represents more than 14% of the return. Against a 2% dividend yield, the fee absorbs one half of the dividend income.

GMO Quarterly Letter Q4 2011 (pdf)
Another letter to investors that I have come to enjoy reading each quarter. Jeremy Grantham gives some good investment advice, and also some market opinions that may or may not be right. I don’t necessarily agree myself, but I like his style. Right now he only likes “high quality” US equities, and he hates going long on bond duration to reach for yield.

I run across a lot of articles that may not merit an entire blog post but are worthy of sharing. Let me know if you like this format with short summaries or if you’d rather me just tweet links.

Playing It Safe as a Long-Term Strategy
For a while, Professor Zvi Bodie has written books and articles about low-risk investing and encouraging the purchase of Treasury Inflation-Protected Securities (TIPS) and I-bonds. If you bought them when he was first saying that, you’d have TIPS paying 3%+ real yield and doing quite well. But now you’re looking at 0% or negative real yield unless you go decades out to eek out 1%.

He still says that stocks are too risky regardless of time held and should not be bought unless you already have enough assets to cover the bare necessities. You won’t like the alternative options: spend less, save more; plan on retiring later; work a second job. He and Taqqu have a new book called Risk Less and Prosper.

Berkshire Hathaway Letter to Shareholders
Warren Buffett sent out his annual letter to shareholders over the weekend. As usual, the letter contains some of his insights and opinions on issues like the housing market recovery, investing in gold, and the current dangers of bonds. He also lays out his argument for why owning equities (at least BRK) is actually low-risk over a long time horizon.

There has never been a better time to be an individual investor
From the Abnormal Returns blog. I agree that there are better tools out there now at a lower cost, but with the death of pensions there will also be a lot more responsibility and pressure placed on individual investors. If they mess it up, it’s not going to be pretty. That makes it a stressful time to be an individual investor!

Wave Accounting: Free online accounting software for small businesses
The price is right at free, as they intend for it to be ad-supported. Includes free import of transactions from your bank account. I signed up but haven’t taken it for a test run yet. I currently use Intuit Quickbooks and haven’t had to upgrade for 5 years.

Your Mistaken Belief in Financial Willpower
I have come around to support the idea that willpower is more of a finite resource, or at least it has to be built up like a muscle. Don’t use it up when you don’t have to. Carl Richards of the NY Times points out ways that we can conserve our willpower for other things using automation for paying bills and savings.

Should Your Retirement-Portfolio Withdrawals Fluctuate With the Market?
What is the best way to withdraw from your portfolio in retirement in order to make sure it lasts? This Morningstar article looks at the research on ways to implement flexible withdrawal rates. I agree that numbers like 4% withdrawal rates should be a guideline and not a rigid rule.

I hope that everyone managed to have a relaxing and refreshing long weekend. I managed to catch up on some Instapaper reading, and here are some links worth sharing:

Freelancer’s Union
Independent workers make up 30% of the nation’s workforce, and the FreeLancer’s Union is trying to help organize them into a stronger community. The primary reason I found this interesting is in limited geographical areas, they offer ways to get affordable health, dental, and disability insurance to freelance workers. Finding non-employer-linked insurance is a big concern of mine in the future, and perhaps more localized freelancer groups can help.

The best investment advice you’ll never get (San Francisco Magazine)
In 2004, when Google’s IPO occurred and made hundreds of young multimillionaires that quite possibly had no idea how to handle that money, their management team did something very clever. Instead of just shunting them to Goldman Sachs or Morgan Stanley “predators” :), they brought in a series of speakers to talk about investing. This included names like Bill Sharpe, Burton Malkiel, and Jack Bogle. Read this (long) article to see what they were shown.

Vanguard Is Coming To Canada (Marketwatch)
I did not know this, but according this article Canadian investors are not able to buy Vanguard mutual funds offered in the US. They can, however, buy the same Vanguard ETFs. Well, Vanguard has recently announced that it plans to open 6 low-cost index ETFs for the Canadian market, including an MSCI Canada ETF, a Canada Aggregate Bond Index ETF, a CAD-hedged US Total Market ETF, and a CAD-hedged EAFA Index Fund. It may also open corresponding open-ended mutual funds. This development should put significant pressure to lower costs across the industry.

Intuitive Probabilities – Blackjack and Loss Rebates (Kid Dynamite)
There was some buzz recently about a guy playing high-stakes blackjack that walked away with another $1 million winning session. It was revealed that to entice his play, the casino actually rebated 20% of his losses. Basically, he got to keep whatever he won, but if he lost $1 million, he would only have to pay $800k. This may sound like a sweet deal, but this article shows that with as little as 100 hands played in a session, the casino is still theoretically ahead. The house still wins. Kind of like a lot of hedge funds. You give them your money to invest/gamble, and if they win, they keep 20% of the winnings. If they lose, hey, it was your money. 🙂

Create Time to Change Your Life (Zen Habits)
Making clear priorities allows to you see what you need to do, but you also need to cut out some existing things as well. You may think you can just cram it all in, but you really can’t without burning out eventually.

Chase British Airways Card: $50 off two meals at Michelin-starred restaurants
If you got this card from the previous 100k mile bonus offer, they are offering two $50 off $50 purchases at fancy-schmancy restaurants with Michelin stars. A nice perk, although a meal at these places can easily run a lot more than fifty bucks. I’m sad to say I have never eaten at any of these fine establishments. Le Bernardin would be top on my list.

Refinancing While Underwater (NYT)
Includes different options on how to refinance your mortgage if your home’s value has dropped such that you owe more than your house is worth.

If your loan is owned by Fannie or Freddie, you may qualify for the Home Affordable Refinance Program, or HARP. Some 2.5 million to 3 million homeowners may be eligible to use HARP, according to government estimates — provided, among other things, that they have not been late on their payments more than once in the last 12 months.

Hello from Alaska! I’ll be back to regular posting shortly.

I changed up some of the design of the website last night, not really sure why, I had some free time and have been meaning to try some things out. I don’t have the motivation to do a complete redesign, but wanted to update things slightly to account for modern screen sizes and resolutions. I’ve made the content a bit wider (this also allows for larger embedded images), widened the sidebars a bit, made the text a bit bigger, and changed the spacing a little. Let me know if you have any suggestions.