A little over a year ago, Russell Bailyn, an investment adviser who crossed the barrier into the blogosphere with his Financial Planning Weblog, contacted me to let me know he was beginning work on a book. As Russell and I were both music education majors in our respective undergraduate universities, I was eager to support his endeavor. I’m happy to report that Navigating the Financial Blogosphere: How to Benefit From Free Information on the Internet was published earlier this fall.

In Navigating the Financial Blogosphere, the author takes twenty-six of the most popular financial questions and dedicates a chapter or two to each. The questions run the gamut from basic financial knowledge to intermediate investing techniques, professional financial designations, and the mystery of variable annuities.

Russell takes a real-world approach to answering financial questions, such as, “Are Credit Cards My Enemy?” and “What Are My Chances of Getting Social Security?” In this book, the author is able to present two sides of a story, particularly when addressing a hotly debated issue. For example, Russell tackles the question of dabbling in real estate as an important part of an investment portfolio. He discusses the pros and cons and allows the reader to decide how real estate can fit into their own overall investing scheme. I applaud Russell for not making many blanket recommendations other than the most basic. He understands that financial advice is personal and the right answer for one investor is not always the right answer for another.

I have not yet mentioned this book’s strongest selling point and what makes Navigating the Financial Blogosphere unique. It’s apparent from the title, however. Not only does the book cover the essential aspects of financial planning, but it is full of references to online resources, all free. These resources can be used by the reader with an Internet connection to research any issue. Many of the resources are personal finance blogs, like Consumerism Commentary, Free Money Finance, and My Money Blog.

Russell goes beyond blogs as well, pointing the reader towards Motley Fool, FinAid, and BankRate. Each chapter concludes with a summary of the online resources available for that chapter’s topic. All of the resources listed are still active as today, and they are the types of websites that should be around for a long time. These summaries function as a filter. One could simply enter the topic about which they wish to read more into Google, but the quality of these results will vary. Russell has picked the best for you.

The methodology of including current websites also provides the author with a reason to publish updated editions periodically.

If you’re familiar with the world of free online information, particularly personal finance blogs, and you feel you are confident in your ability to pick the wheat from the chaff, then you might not be the primary audience for this book. However, if you are just starting to become aware of the importance of personal finance and enjoy online research, this would be an excellent book for you. The value of this book is in the financial advice and information coupled with the best online resources.

Russell’s first paragraph on the hardcover sleeve explains his philosophy in writing this book:

While many of us trust the advice of so-called “experts” when it comes to our financial well-being, the fact is that many of these professionals either aren’t objective enough or simply have an opinion that they want to push on us. This is ironic in that finance is a very subjective discipline, and many financial issues can be resolved by combining a few simple rules with a solid understanding of your own personal preferences.

I’m quite flattered that Russell included Consumerism Commentary as a resource in several of the chapters, and it’s an honor to be mentioned alongside the other great financial resources available for free online. I highly suggest reading Russell Bailyn’s Financial Planning Weblog if it’s not all ready part of your personal finance blog reading.

The other day, I arrived home to see two boxes, one large, one smaller, waiting for me on my doorstep. A quick inspection verified that the shipment came from Sumo Lounge, who were sending Consumerism Commentary some product samples for review.

Sumo Lounge sells hip, urban furniture in the form of huge nylon sacks filled with some kind of bead product. I’m not sure why they wanted to have Consumerism Commentary review their product, but I agreed with the stipulation that they also provide one to give away to readers. (That comes later, so keep reading.) It turns out that MyMoneyBlog reviewed the Sumo Lounge Omni and Otto last year, so personal finance blogs are apparently within their target market.

Anyway, since the boxes were blocking my front door, I carried them up to my apartment (see photo). Surprisingly, the boxes were very light.

They stayed unopened until I was ready to dedicate the time necessary to deal with more “furniture.” The larger box contained the Sumo Omni, the “chair,” and the smaller box contained the Sumo Otto, the ottoman.

I pulled the Sumo Omni out of the box, and it was already “assembled.” It is a bright red bag, made of what appears to be very strong nylon. I tried unsuccessfully to rip the material with my bare hands, and decided not to pursue the endeavor with sharper objects. My illegal resident cat, Rupert, spent some time playing with the Omni at this time, and his claws had no damaging effect. This was actually one of my primary concerns before receiving the chair, but I see that I don’t have to worry about damage.

The foam beads which give the chair a unique feel are sealed in by a strong zipper and the zipper is hidden from view with strong velcro. This image shows, though it may be difficult to see, the beads inside the bag.

What’s neat about the Omni is its ability to hold its shape. It’s actually quite comfortable. The official website describes eight different shapes and supplies images of ten different colors. My girlfriend and I tried out as many of the positions pictured on the website without getting tired. Yes, the Omni is big enough for both of us to be comfortable at the same time.

It’s actually much more comfortable than I expected for sitting, whether in the Omni with my feet up on the Otto, or just sitting on the Otto itself. Laying the Omni flat and pushing the beads around a bit to even out the support, the chair converts to a small bed. Sumo calls the configurations a “floor pillow.” It’s nothing like a pillow-top mattress, but it’s comfortable enough, even for sleeping.

Pictured below are the Omni and Otto in some of the more standard shapes.

At $149 for the Omni (currently $129 with free shipping) and $75 for the Otto (free shipping), it’s a bit pricey. This is high-quality material, however, and these seats are not even reminiscent of the old bean bag chairs you may remember from the first episode of 3-2-1 Contact. You’re more likely to see Playboy bunnies lounging on the Omni. This would have been great for back when I was in college, but it still looks nice in my more “adult” apartment. I considered putting it upstairs in my loft, but I’m going to keep the set in my living room to show it off to and be used by more visitors.

Sometime later this week, I will kick off a contest to give away one Sumo Omni to a lucky reader. The winner will get to choose the color from the ten choices listed here. If you think this might be an interesting addition to your household decor and furnishings, I suggest you enter once the contest begins. You have nothing to lose.

Seven years ago, you would have found me blissfully unaware of my spending practices and their impact, flourishing my credit card without a second thought as I ran up my tab at restaurants and shops. I defined living life fully as having the things and experiences I desired, and I thoroughly enjoyed myself, imagining that I could travel anywhere and do anything I liked.

There was a catch, though. Only through intentional ignorance could I stand to keep it up, refusing to look my finances straight in the wallet. When I was confronted with bills I’d flinch, pay what I could, and hope to straighten things out later.

It was a frightening day when I finally faced my situation. During such “rich” living, I’d not realized the weight that my debt added onto my life. I was tipping the scales way out of balance, and the only way to even begin to fix things was to gather my finances and face the situation head-on.

Now, I watch my finances daily, with a slight degree of paranoia. I suspect that any moment I’m not paying attention, a spending mishap or stock fluctuation will sneak in and alter my financial landscape. I am obsessed with a constant need to know where I stand against my goals, planning strategies and swelling with pride at every small stride forward. I thrive as I watch my debt dwindle.

Besides my mindset, my biggest obstacle to financial awareness was my hatred of math. There, I’ve said it. I despise balancing checkbooks, tallying accounts, and performing almost any analysis involving a calculator. And though I’m starting to get to know them better, balance sheets, cash flows, and other documents which look like corporate financials make my eyes glaze over.

I have outlined my own budget and expenses several hundred times in Excel, only to find I never want to look at them again. It’s just how I am.

While I had high hopes for MS Money and Quicken, I found them to be expensive and somewhat burdensome to work with. I spent hours categorizing things only to realize that I didn’t have the time at home to keep it up, nor did I find the reports all that helpful.

I kept wanting it to be simpler, clearer, cheaper. My finances at a glance, in one place, but accessible online from anywhere without needing to remember scores of passwords.

I found this to some degree in Yodlee’s account aggregation, encountering the service first as Wachovia’s “One Stop” and then as Fidelity’s “Full View”. Some use Yodlee MoneyCenter directly, I’ve heard, but I always access their services via one of my account providers.

Though the service can look and work differently based on implementation, it’s relatively simple. Essentially, there’s a one-time setup phase, where you add your accounts, and then each day you log in and refresh your data to view a snapshot of exactly where you stand financially.

Bank accounts, loans, brokerage, credit cards, 401K and other investments tally up to a neat net worth, with transaction information easily accessible. Even insurance, frequent flyer miles and my billpay service can be added to this view. I set it up once, and now log in every day, sometimes two or three times a day. I told you it’s an obsession.

The problem? It’s great to get such a high-level at-a-glance view, but it hasn’t grown with my needs. There are no analytical tools, no way to categorize and tag items and get different views or reports of the information presented or any helpful tips to improve my situation.

Until Mint, that is. Launched last week, this free online money management service features the security and ease-of-use of the Yodlee platform with a host of simple yet effective tools for categorizing, analyzing and ultimately improving one’s relationship with money.

Their web site makes some impressive claims:

Mint is the freshest, most intelligent way for you to manage your money online. Not only is Mint free, it saves you money. While existing personal finance software “solutions” require hours to set up, a passion for accounting (is that possible?) and hours of weekly maintenance, Mint is virtually effortless.

Can it be true? Can it really save you money? Most importantly, can it save me from the things I most dread, mathematics and accounting?

I’ve been beta testing their service for a few months now, and have formed some strong opinions so far. So, let me introduce you to Mint.

Wall Street Journal Complete Real-Estate Investing Guidebook
David Crook
(9/10)

Occasionally, publicity agents, publishers, or sometimes even authors, send me books with the request that I read and review what they send. That was not the case with this book.

A few months ago, I wrote about the cost of owning a home over 30 years based on information in the Wall Street Journal, and it generated a fairly intense discussion. The data presented show that ownership of your primary home is not a good investment. When people talk about their home appreciation as a function of current market price minus purchase price, they’re forgetting about the thousands of dollars in maintenance, repairs, and upgrades, which in any real investment would be added to the cost basis, reducing their real return.

The author of the article showed, from his own experience as well as extensive external data, that you could easily be $1 million into your home after 30 years.

I took some questions from Consumerism Commentary readers to the article’s author, David Crook, the editor of The Wall Street Journal Sunday. We exchanged emails and I presented a follow-up post outlining a realistic picture of the cost of home improvements. I added Crook’s latest book, Complete Real-Estate Investing Guidebook, to my Amazon wish list so I would remember to look for it while browsing a bookstore some day.

Not much later, a friend of mine (and occasional Consumerism Commentary commenter) who works at Dow Jones presented me with a copy of the book signed by the author. Thanks! Distracted by my move, I have finally finished the book.

David Crook’s Complete Real-Estate Investing Guidebook goes into the kind of detail “gurus” like Robert Kiyosaki make you believe you have to pay thousands of dollars at a seminar to receive. Don’t get me wrong, the book does include a requisite hook: “The 20 Things Every Real-Estate Investor Needs to Know,” but thankfully Crook doesn’t toy around with this concept. Instead there are specific, actionable ideas surrounded by examples and case studies throughout the 241 pages.

There are no get-rich-quick schemes here. Crook routinely warns the reader against promises of no-money-down investments and “something-for-nothing hucksters.” The author’s advice is meant to be taken by a novice investor over a period of time, perhaps up to 12 months or longer just to get started on the first property.

After Crook sets the premise that the house you live in is not an investment for the purpose of income, he goes on to explain how to find the money to get started, emphasizing the importance of leverage. The author presents detailed formulas for evaluating properties in order to find good values in real estate, suggesting that the best purchases would be at a 30% discount from the property’s market value.

A significant chapter is devoted to explaining in detail the tax benefits of real-estate investing. The government in this country starting with the Founding Fathers has always encouraged land development, and this continues to the current day. Here is Crook’s comparison:

A person making a $135,000 salary would probably end up paying $20,000 to $25,000 a year in federal income taxes, plus $7,000 more in Social Security and Medicare taxes. A stock investor earning $135,000 a year in dividends would pay $20,000 a year in taxes. The landlord’s tax bill [on $135,000 rental property income]? About $1,800.

In the next few chapters, David Crook writes about smaller residential investment properties, larger residential properties like apartment complexes, and commercial buildings. Each type of investment has its own benefits and drawbacks and an investor may be a good fit for one type while not the others. For example, Crook discusses the need for staff, including “supers” and rental managers, when it comes to investing in multifamily buildings.

The author explains the differences between six different forms of ownership (sole proprietorship, general and limited partnership, C and S corporations, and a limited liability company) and what investment situations call for which types.

I found it interesting that Crook gives the reader a “way out,” asking for the would-be investor to question whether he or she truly wants to be a landlord. He admits that the type of work necessary to be successful is not a piece of cake. Other gurus would be happy to let you believe that all you have to do is wish, and you can make money in real-estate investing.

The section on Real Estate Investment Trusts (REITs) is informative. These investments are presented as a way to use the stock market to invest in real estate, perhaps for those who can’t stomach being a landlord. He discusses recent REIT performance and explains what type of investments to look for based on recent performance and growth opportunities.

The final chapter includes the aforementioned 20 Rules, but rather than being built up throughout the book as a secret to be revealed, it is basically a summary of the most important points already discussed in detail.

Crook takes a page from Stanley and Danko’s The Millionaire Next Door in his description of real-estate millionaires.

The vast majority of rich people are distinguished by one overwhelming, dominating trait: They’re frugal. They drive old cars, live in modest houses and wear average clothes. They are rich, not because they are lucky or they have found some secret formula to wealth, but because they work hard, keep a long-term perspective and spend little.

Readers who get comfortable with David Crook’s Complete Real-Estate Investing Guidebook have a good chance of determining which type of real-estate investment (if any) is right for them and becoming successful after the appropriate time and effort.

I will be giving away one copy of Complete Real-Estate Investing Guidebook from Amazon.com, so stay tuned for an announcement of how you can be the lucky winner.

When I decided that I didn’t want to break my back moving my heavier furniture down one flight and up at least one more, I also decided that I wanted someone else to do that for me. I could have done more research when choosing a moving company, as I was hoping for a recommendation from a friend or co-worker. No one was able to quickly provide any information, so I did what most people do, I checked the Yellow Pages.

I felt I’d be more comfortable going with a national company with name recognition, and my eyes focused on the listing for Two Men and a Truck. I had seen their trucks around before, white with black lettering, and the simplicity of their concept and the student-on-the-cheap attitude invited me to do more research.

Thanks to Epinions, I was able to find out more about the company from past customers’ perspectives. There were, as I would have guessed, many favorable and many unfavorable reviews, with the positive outnumbering the negative. One thing I had to keep in mind is that each office of Two Men and a Truck is independently operated and therefore wildly different experiences would be expected from location to location. There were no reviews for my local office specifically.

I filled out a form online and quickly received a quote. The move would be $120 per hour, plus one hour drive time. They don’t charge by the pound, so there’s no risk of weight fraud. The hourly rate was a little high, but it’s comparable for the area. A move on a Saturday carried a minimum of 4 hours while a Sunday move required 6 hours. To schedule the move on a weekday, the minimum charge would be “only” for two hours. I decided that it would be worth it to work from home a half day and schedule the move on a weekday afternoon.

When I called for more details about the quote, their office manager exteaplained that their crewss were fully booked for the day I scheduled, but they would be able to pull a crew from the North Arlington office—farther away—without any additional travel charge.

On the day of the move—yesterday—I received a call about 30 minutes before their scheduled arrival time. The directions they received from the office were not very good and they were getting lost. I directed them properly and they arrived 15 minutes early. After explaining what I wanted to have moved and filling out the paperwork (liability waiver, etc.), the crew, two men named N. and K., went to work.

They did a decent job protecting my furniture, not that what I have is worth much. I was concerned that they didn’t wrap my mattress in plastic, but once it was lifted onto the truck, they did a good job of protecting it. To my surprise, rather than carrying the lighter items down the stairs outside my old apartment, one man passed items over the balcony to the other.

After the truck was fully loaded, I gave each guy a bottle of water and they followed me to the new apartment. When they arrived, they drove around to reposition the truck and began unloading. During the whole process, the crew was friendly and conversational. They saw my bicycle on the balcony and we talked a little about riding.

As they were finishing up I offered a couple of cans of soda. K. reassembled my dining room table, adding in the leaf, and I did the closing paperwork with N.

The entire process took a little less than the two hour minimum charge, so I’m very pleased with my decision to schedule the move on a weekday, “saving” at least $240. After they were finished, I offered them soda, provided them directions back to the Turnpike, and sent them on their way. The only problem I had was with my entertainment center. I noticed it was scratched up badly after they left. I could just repaint the black shelves, but I probably won’t. The center was passed down to me from a friend, and I’ll likely get rid of it when it’s time to buy a new television.

Here’s the full breakdown of the cost:

All in all, it was a good move, and I would recommend them to anyone else in the area who needs to move, keeping in mind that any branch of the office—or any crew—might provide an experience that is not quite as good.

Cash, Cars & College: A Young Person’s Guide to Money
Janine Bolon
(6/10)

When it comes to book reviews, I am usually contacted by the publishers, press agents, or public relations teams. When an author takes the time to email me directly, I pay more attention. I was contacted a few weeks ago by Janine Bolon, the author of Money…It’s Not Just for Rich People!, to review her latest book, Cash, Cars and College.

The book is more like an oversized pamphlet, at 91 pages (including appendices) with large print. The intended audience consists of students between the ages of 12 and 19, but I think the book is most effective for the young end of that range. There are only a few major concepts in the book, and they are explained well for the reader, even taking into account a wide variety of experiences and parental lessons a young teen may have.

Bolon explains that money doesn’t move in a straight line (in, then out), but rather in a cycle of living, saving, and giving. With this idea, money is more likely to come into your life when you give it away. To take full advantage of this cycle, Bolon instructs through some age-appropriate activities to split any income you receive (except for money from your mom for buying clothes, for example) into five buckets based on her 40/60 Principle.

• 40% goes to living. This, the “40%” in the 40/60 Principle, is the money you spend on yourself.
• 20% goes to short-term savings. The description in the book matches what I’ve written about in the form of an emergency fund: savings for unexpected expenses.
• 20% goes to long-term savings. While it’s not completely explained in these terms, this is your retirement fund. If I had known to save money for retirement when I was 12, I’d be much further along than I am now, having started when I was 26 or so.
• 10% goes to a philanthropy of your choice. From the book: “This cash demonstrates your willingness to share the good things that the Universe has given you—thereby showing that you can be trusted to continue receiving (and sharing) the good thingsof the world.”

• 10% goes to a spiritual institution of your choice. While again not explained in the terms we’re familiar with as adults, this is the typical tithing that is taught in the Bible. More importantly, this money is used for giving back to the community of which you’re a part. Bolon does suggest for those who have no religious affiliation to use this 10% for additional philanthropic donations to keep the cycle flowing.

  The above points form the basis of the book. They are in fact “points,” as Bolon has created a five-pointed star to illustrate each destination for income. Around these five points, Bolon fills the book with good advice, perfect for a young teenager. For example, Bolon imparts the lesson: “Do what you like, the money will come.” This certainly encourages kids to improve their skills for whatever type of activity they are most interested in.

  Bolon also explains the virtues of frugality, and for some kids, this will be the first they’ve heard of the concept. She also tackles credit card debt and compound interest in such a way that young adults will understand but not find boring. These concepts, as well as others, are reinforced with exercises at the end of each chapter, similar to—but yet much different than—exercises at the end of the school text books with which readers of this age will be quite familiar.

  The goal of this book is to set these young adults on the path to financial maturity, and here’s her list for getting started on that path:

• Break the (piggy) bank. This refers to the money destinations listed above, based on the 40/60 Principle.
• Plow the ground. Open up two accounts at the bank with your money for short-term and long-term savings, and let compound interest go to work.
• Catch a porpoise. Bolon wants everyone to determine their passion in life—“porpoise” being a pun on the word “purpose”—which will guide them through their choices.
• Drive on. Continue learning about money by reading more books that will lead towards financial independence.
• Branch out. I addition to books, find other resources, such as magazines and, dare I say, websites.
• Stay engaged. Learn all kids of new things continuously, and never stop exercising your brain.

• Relax! Let the world do what it is supposed to do while you take care of your responsibilities, but it will take a long time. Be patient.

  Janine Bolon’s Cash, Cars & College is a good introduction for kids getting an allowance or babysitting, with a small income coming in. Now that they have money to call their own, they can benefit from the author’s suggestions for spending, saving, and giving. Bolon handles the section on giving without preaching and without overly emphasizing religion, which I appreciate. All in all, Cash, Cars & College will set young adults on the right path towards financial maturity, if they follow the exercises and make her suggestions part of their permanent philosophy.

  Why did I give only 6 stars out of 10? I think teenagers in the work force for the first time, say as a waitress or a fast food worker, might have some questions not covered by the book. For example, how do taxes fit into the 40/60 Principle? Are taxes paid from the 40% “living” category or does the entire pool of cash consider only after-tax income? A 12 year old may not be concerned with this question, but a 19 year old might be. Also, I don’t remember much discussion of cars and college in the book, though they are included in the title. Nevertheless, this short book is full of quality suggestions and exercises that can provide good talking points for parents with their children.

  As always, I give away the books I receive for review. Look for a contest of some sort in the next few days. If you’re the parent of a teenager, pay close attention.

Excuse Me, Your Job Is Waiting: Attract the Work You Want
Laura George
(7/10)

A few days ago, I finished reading Excuse Me, Your Job Is Waiting, by Laura George. This book follows in the footsteps of another, Excuse Me, Your Life Is Waiting. The premise of both books is the “law of attraction,” which is generally interpreted in popular culture as the idea that events are influenced by the attitude of those involved. Positive thinking helps encourage positive outcomes.

Of course, none of this is scientifically proven, at least not within this book. However, there are enough anecdotal testimonies to convince people the concept is “true.” In this convincing, positive outcomes can be attributed to positive thinking and negative outcomes can be negative thinking.

I’m convinced, for the most part. Whether positive thinking actually influences outcomes in a cause-effect relationship, I’m not entirely sure. Positive thinking certainly makes one feel better, and this attitude can be picked up by others involved in active communication, and can be perceived as a connection, making everyone feel better about the relationship. If you’re on a job interview, this is a good thing.

The book goes much farther with this idea. Read the rest of this article »

Cameron Johnson features testimonials from T. Harv Eker and Donald Trump on the dust jacket for his new book, You Call the Shots. The book also includes a foreword by David Bach. However, this book outshines in many ways what I am used to seeing (over and over) from the typical financial gurus like Trump and Bach. Like the others, this book promises something unique: the 19 essential secrets of entrepreneurship. Unlike other books I’ve read, Cameron approaches the book through sharing personal stories about growing up, dealing with expectations, learning about the world of entrepreneurship, and building a wide variety of businesses.

I won’t summarize Cameron’s complete entrepreneurial résumé, but it’s interesting to see his development from an eight-year-old fan of Donald Trump, unafraid to put himself “out there” and get the attention of an individual who likely had better things to do than go out of his way to make a random kid happy, to a savvy business owner. Donald Trump was only one of Cameron’s inspirations, however. Read the rest of this article »