All posts by Jacob A Irwin
Which Platform Should You Choose for Online Stock Trading?
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The following is a guest post from Jason Laurents. Enjoy!
Choosing a Platform for Online Trading
Investing in the stock market is by no means an easy task. Even more experienced traders have a difficult time calling the right investments, but that doesn’t mean a novice investor can’t do well for themselves. Even during this economic downturn, choosing to invest in the stock market can still provide excellent return on investments. Making the right investments is all about analysis, timing, and emotionless decision making. You also need a great broker.
Unfortunately, choosing to hire a broker can be expensive – especially if you choose one from a more distinguished firm. While these individuals have incredible knowledge about the stock market, they also charge high commission fees which can greatly reduce your return on investment, and quite honestly, not many people have the additional funds to hire such a broker.
Online Brokerage Options
However, for those wishing to avoid the high brokerage fees, there are numerous online trading platforms that can help with trading. These online trading platforms allow users to purchase stocks at relatively inexpensive prices and provide users with the most up-to-date analysis available so that they may make educated investing decisions. A few of the most popular platforms for online investing include:
• E-Trade
• Scottrade
• Fidelity
While each of these platforms has their own unique advantages and disadvantages, they are all industry leaders and generally good choices. Prior to choosing a firm, investors should read reviews including the E-Trade, Fidelity, and Scottrade review at different sites around the Web to ensure they are choosing the company that will best suit their needs and budget.
What to Look for in an Online Broker
Investors using online trading platforms also don’t have to worry about going at trading alone. Most of the online companies have brokers on staff who are willing and able to assist users and help them make good investing decisions. However, before signing up with an online trading platform, investors should always make sure that they are choosing a company with minimal account fees and low margin rates.
Conclusions
Trading stocks online can be a great way to invest additional savings, but investors should not let online trading become their only investments. The stock market is highly volatile, and those who don’t give their investments the time and dedication they need, risk losing their hard earned money. Diversification is, and always will be, the best way to manage your investments, and although only investing can produce worthwhile ROIs, no investor should ever rely on them solely for their savings.
How about you all? What is your favorite online stock and/or mutual fund trading brokerage?
What features do you specifically look for in an online broker?
Share your experiences by commenting below!
Jacob’s Thoughts – Listed below are my random thoughts as I was reading this article.
- @ Investing Strategy of Buying/Selling Individual Stocks –
- If you’ve been reading my blog for a while, you probably know that I am not the biggest fan of individual stock trading.
- Instead, I employ what’s called a passive investing strategy/approach.
- However, I’m not totally against people investing in individual stocks. In fact, I think it’s healthy to invest a little play money in stocks to test your hand at fundamental and technical analysis. However, I would not recommend that any one base their retirement funds on money invested in individual stocks.
- @ 3 Online Brokers Listed Above –
- Of the 3 online brokers listed above, I’ve only bought and sold mutual funds with Fidelity and Scottrade. I have never used E-Trade.
- Between the pair of Scottrade and Fidelity, Fidelity is definitely better for investing in mutual funds, mostly because they offer low-cost index mutual funds which trade free of commission within a Fidelity account.
- For individual stock trading online, I would not recommend Scottrade, Fidelity, or E-Trade. Instead, I would go with a discount broker such as Zecco.com or Sogotrade.com. Both of these offer trades for around $3-$4.
- @ Diversification –
- Diversification is extremely important in saving for retirement. If you must invest in individual stocks, be sure to own at least 5 stocks in different industries to obtain sufficient diversification.
- In addition, before investing in stocks, ensure that you have 1) health insurance and 2) an adequate emergency fund consisting of 6-9 months of expenses in a liquid, cash account.
***Photo courtesy of http://www.flickr.com/photos/ivanwalsh/3914312938/sizes/o/in/photostream/
Tour de Personal Finance 2011 Post-Race Show – Awards Ceremony, Race Recap, and Goals for Next Year’s Tour
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On June 24th, I made the somewhat “last-minute” decision to organize an event/idea that had been incubating in my head since about February of this year. What solidified from this jumbled mesh of ideas and random “shot in the dark” intuitions was the introductory post and goal layout for the 2011 Tour de Personal Finance.
Over one month later, the Tour de Personal Finance has ended, a winner has been crowned, and I can decisively say that the 2011 edition of the event has been a great success! The success could not have been possible without tremendous support from the participants and readers/voters. A big round of applause is in order for all of you!
Awards Ceremony
- Yellow Jersey – Winner of overall competition. Article voted “best” by readers. Way to go!
- The Yellow Jersey winner for 2011 is Donna Freedman with her article entitled, “This isn’t your grandparents’ recession.” A brief description of the article is shown below:
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Ever since the recession began I think there’s WAY too much blaming of the victims. I’m good and sick of hearing pundits grumble about how lazy and soft Americans have become, and how we ought to take a few lessons from the Great Depression. Here’s the thing: The world was a different place back then. Heaven knows I’m no apologist for slackers, credit-card spendthrifts or people who won’t take anything but the “right” job, but a lot of the advice our elders offered/modeled isn’t relevant today. Plenty of folks are in big trouble not because they’re lazy, but because of complex personal, local, national and global economic issues.
- Podium Placings – The 2nd and 3rd placed articles that are on the podium with Donna Freedman are shown below. Congrats for making it so far in to the competition!
- 2nd Place – Paula from Afford Anything with her article entitled, “If I Had a Million Dollars, I’d Go Into Debt.” A short description of her article is shown below:
- What would I do if I won a million dollars? This post describes how I’d invest every last penny, scrutinizing tax benefits, risk, returns, real estate, and why I would go into debt — yes, I would go into debt — if I were a millionaire. And don’t just take my word for it: Einstein backs me up, and so does third-world poverty theory. Read this post to find out more.
- 3rd Place – Jesse from PF Firewall with his article entitled, “What The Piano Tuner Taught Me.” A brief description is as follows: You can learn a lot from a person by their chosen profession even if that profession is not something you fully understand or are familiar with. Their passion, their spirit, their seemingly perfect fit with the intricate details involved – these things are clear when someone truly loves what they do. That and much more is what I learned from Howard the piano tuner. Read this article to learn more!
- White Jersey – Goes to highest placing, new blog (blog that was started less than one year ago).
- The White Jersey winner for 2011 is Paula from Afford Anything. Her article (“If I Had a Million Dollars, I’d Go Into Debt“) made it to the final, championship (17th) Stage.
- Quite impressive for a blog that was only started back in March of 2011! I wish I had grown my readership and support base that quickly when I started blogging! haha
- Green Jersey – Goes to the blog whose article wins a single stage “the fastest.” In other words, the Green Jersey goes to the blog who wins a single stage by the biggest margin against their competitor.
- The Green Jersey winner for 2011 is Jesse from PF Firewall. His article entitled, “What The Piano Tuner Taught Me,” won one of the Stages in which it was competing by an 11:1 ratio over his competitor! Quite impressive! Nice work Jesse! The sprinters of the Tour de France (such as Thor Hushovd and Mark Cavendish) would be proud of you! Your next goal will have to be to win 6 stages like Cavendish did this year in the Tour de France!
- Polka-Dot Jersey – Goes to the best placing blog article entered which details information on “climbing” out of the debt “mountain”.
- The Polka-Dot Jersey winner for 2011 is Glen from Free From Broke. His article entitled, “The Greatest Impact On My Finances And My Best Financial Tool,” made it to the 3rd Round of competition and features a great story about he and his wife created a powerful combination to get out of debt and keep their finances healthy! Nice work Glen!
Race Recap
The 2011 Tour de Personal Finance began on July 2nd (same day as the first Stage of the 2011 Tour de France) with 46 participants/blogs.
In order to start and finish in the same approximate time period as the actual Tour de France, the competition proceeded quickly through the first round with 8 blogs (4 intermediate sprints per day). Each sprint was given 3 days for voting to occur, and because of the time frame needed to keep pace with the Tour de France, no adjustments were made in voting based on weekday/weekend scheduling. In the last two Rounds of competition, voting was extended to a four day time period to give everyone a chance to vote.
You can view the complete story of how each Stage played out by viewing the 2011 Tour de Personal Finance Bracket.
When all was said and done, the month-long event featured the following statistics:
- 17 total Stages
- 26 blog posts
- 753 total comments/votes – Wow! That is an awesome amount of participation! Thanks to everyone involved!
- 3,000 page views of Tour de Personal Finance Stages and posts.
- 2,083 unique visitors to Tour de Personal Finance Stages and posts.
2011 Reflections and Goals for 2012 Tour de Personal Finance
As I mentioned above, I think that overall, the 2011 edition of this event went very well.
Listed below are the things that I very much enjoyed about this event the past month:
- It’s enabled me to interact and get to know many new bloggers and readers.
- I’ve learned a lot by reading some of the best articles from each blogger’s site that have participated in this competition.
- I liked how the race started and end of the race stages coincided with the start and finish of the 2011 Tour de France. I thought that was really cool!
Listed below are some things that I see as areas for improvement:
- First, in this year’s event, we had 46 participants. Even though this is a round number and event pairings/bracket placements were chosen with a random number generator, the participants in the “lower-half” of the bracket had one less Round of competition to get through. Even though I don’t think this ultimately affected the final placings, it is something I could see improving in the coming years.
- Because of this, I’d like to start promoting the event earlier next year and get a total of 64 blogs involved to make everything evened out.
- If I were running this contest in an ideal world, I would want the voting for each Stage to start and stop on a weekday in order to take advantage of the increased readership that happens during the week. However, in order to keep up with the pace of the Tour de France, the contests had to be started/stopped on weekends, as needed.
- I’d like to get everyone’s input on this subject – do you think it’s more important to align the event with the actual Tour de France or to provide better timing for weekday voting for each article?
- I think that at a minimum, for the 2012 edition (with 64 participants), I will at least start the even 1 week prior to the start of July.
- Lastly, in the coming year’s of the Tour de Personal Finance, I’d like to offer some sort of prize to the winner(s) of the competition.
- At the very least, I would like to offer a gift card to the yellow jersey winner sponsored by my site.
- However, what I will likely try to do for 2012 is to promote the event earlier (using the traffic stats above) and get some sponsors (maybe even a title sponsor).
- With the money generated from sponsorship, I would then look to donate half of it to the charity that the winner elects.
- What does everyone think of this idea? Anybody have any ideas for companies/websites that would be interested in this sponsorship?
How about you all? What did you think of the 2011 Tour de PF? What would you like to see the different or the same for next year’s event?
Share your experiences by commenting below!
***Photo courtesy of http://www.flickr.com/photos/phillipo/3574507782/sizes/l/in/photostream/
You’re Homeless. How Would You Improve Your Situation?
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- In my possession, I have $20 and a valid Driver’s License.
- I am living in a mid-sized Midwest United States city with an adequate bus/trolley system for public transportation. In this way, transportation is not a limiting factor.
- I do not have a college degree(s), but did graduate from high school (or have the equivalent G.E.D certification).
- I have clothes that enable me to fit in with regular people. In this way, I don’t automatically appear homeless.
- Minister at Your Local Church
- Irregardless of my personal religious beliefs, probably the best source of information for where I can receive aid from the local community would be a minister/pastor/reverend at a local church.
- These individuals have experience with local community aid organizations, and can serve as a true “one-stop-shop” for how I should proceed in getting assistance.
So, that is how I would personally proceed in “stabilizing” my situation. However, just to give you all an idea of the types of organizations available to aid homeless people, I’ve put together a short list below.
- Homeless shelters
- These are organizations, such as The Salvation Army, that provide rooms for homeless people.
- You can find homeless shelters in your city/state at the following link – Homeless Shelter Directory.org
- Food banks
- Provide free meals to those in need.
- You can find food banks in your city/state at the following link – Find Food Banks By State/City
- Airport Valet – I’ve heard that some of these guys/gals make $100,000 per year. Just think – if you get $1 in tips per bag, that could add up quickly!
- Restaurant Waiter
- Tour guide/Bus or Shuttle Driver
- Sonic Drive-In Worker
- Porta-Potty Cleaner – This doesn’t involve tips, but due to the grotesque nature of the work, you can make $50,000 per year.
- Telephone Telemarketing – I’ve heard that people can make $15-$20 per hour with this. Plus, it’s air-conditioned!
How about you all? If you were homeless, what steps would you take to improve your situation? Have you ever known any one that was homeless?
Share your experiences by commenting below!
***Photo courtesy of http://www.flickr.com/photos/roughgroove/2473248707/lightbox/
Cavalcade of Risk # 136 – Riskiest Sports Edition – July 27th, 2011
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Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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Welcome everyone to the July 27th, 2011 edition of the Cavalcade of Risk. The Cavalcade of Risk, as is implicated by the name, is a bi-weekly blog carnival that features the top articles regarding risk management.
My Personal Finance Journey is honored to be hosting the Cav again this week. The last time we hosted (on March 23rd of this year), we featured a bunch of very interesting articles and centered the Carnival around the theme of the riskiest jobs in the United States. What we saw was that fishing and logging-related jobs weighed in as the riskiest occupations, with MANY more deaths per 100,000 workers than the other top-ranking riskiest jobs.
Continuing on with this theme of exploring high risk activities, the theme of this week’s carnival is the top 3 riskiest sports in the world. But, without further ado, let’s get on with the Carnival.
Listed below are this week’s Top 3 Editor’s Picks! Enjoy!
1. Jason Shafrin presents Does Physician income increase from treating more complex patients? posted at Healthcare Economist.
This article presents a very interesting aspect about the ever-changing economic landscape of medical care. And, it was something that I could relate to since several members of my family are physicians as well.
From what I’ve heard from my family members, more and more doctors these days are getting paid based on the number of patients they see, not the complexity or time each case takes to treat. Even though this doesn’t make total sense and I don’t understand the thought process that the hospitals/payers employed to arrive at the strategy, it seems to be the reality of what is occurring. Jason’s article seems to support this trend as well.
2. Russell Hutchinson presents The History of Life Insurance posted at Chatswood Consulting Moneyblog.
It was no surprise to me to learn that the concept of insurance is not new. However, I didn’t realize just how “not-new” it really was until I read this article. Russell’s article at the link above gives some very interesting accounts of insurance being seen 5000 or more years ago! Pretty cool stuff!
3. Henry Stern, LUTCF, CBC presents Risk Management and Cell Phones posted at InsureBlog.
Cells phones have really become a universal item for people to carry around with them. In fact, it’s becoming more and more prevalent for people to not have a home phone at all and just use their cell phone for all of their calling needs.
While this does streamline a person’s life quite a bit, it also can create significant distractions – especially for people that get cell phone calls while they are driving. Henry’s article shares some interesting results from a comprehensive study showing that even hands-free cell phone calling while driving is not any safer than using a regular cell phone. This is definitely food for thought…
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3rd Riskiest Sport – Horseracing
Personally, I would never have expected that this activity would rank so high on the list. But, I suppose that any time you combine high speeds with beasts weighing in at close to 800 lbs that could run over the riders, you have some danger that could happen!
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And, listed below are the best of the rest!
Stefan presents Calculate the risk of investments using the Altman Z-score posted at Skuzet, saying, “Always wanted to know how you can calculate the risk you take with your investments? Use the Altman Z-score to calculate the investment risk of your investments. Better though, use the Altman Z-calculator to calculate the risks on several selected stocks.”
Nancy Germond presents Most Exit Interviews Are a Waste of Time posted at Risk Management for the 21st Century.
Jaan Sidorov MD presents More On The Impact of Health Information Technology on Medical Practice: Errors of Ommission posted at The Disease Management Care Blog.
Well – that concludes this edition. Thanks for tuning in!
You can submit your blog article to the next edition of Cavalcade of Risk (scheduled for August 10th and hosted by Jason @ Healthcare Economist) using the handy carnival submission form. Past posts and future hosts can be found on our blog carnival index page.
Also, if you are interested in hosting the Cavalcade of Risk in the future, just send Henry (the organizer) an email by clicking here.
***Photo courtesy of http://search.creativecommons.org/?q=dangerous
***Riskiest sports ranking source – http://bet-grand-national.com/dangerous-sports.html
My Personal Finance Journey Vs. The United States of America – Round 2 – What Interest Rate is Your Savings Account Earning?
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For the past three months, we were running a poll on the left sidebar of the site. This poll was seeking an answer to the question below:
What annual interest rate are you receiving on your savings account?
With savings account interest rates being almost sickeningly low these days, the goal of this poll was to make sure that we’re all doing the best we can in maximizing our savings account returns.
In the course of the three months that the poll was running, we received a total of 41 votes, with the answer distributions as shown in the pie chart below:
As you can see in the chart, the majority of people on My Personal Finance Journey are receiving an annual interest rate of 1% or higher. This is very good! Great job readers!
Second place was an interest rate in the range of 0.76% to 1%, and third place was an interest rate of 0.05% of less.
How Does This Compare With The Rest of The United States?
So, we were able to see that the majority of MPFJ readers are earning 1% or higher in interest on their savings account totals. Having established this, we then wanted to see how these numbers compare to the rest of the country.
According to BankRate.com, the national average interest rate for savings and money market savings accounts is 0.17%.
Examining the results in the pie chart above, over 78% of MPFJ readers are earning a higher interest rate than the national average. While this is a really good result, there is still room for improvement. With online banks such as ING Direct offering 1% interest rate savings accounts with no fees and no minimums, there really is no excuse for people in this day and age to be in any category below the 0.75-1% interest rate group.
Of particular concern to me is the 14.6% of voters in the 0.05% interest rate or lower category. These people are most likely not taking advantage of online savings account options. For example, Bank of America and Wells Fargo (some of the biggest brick-and-mortar US banks) savings account are only currently offering a 0.05% annual interest rate. For those readers that fell in to this interest rate category, I would highly recommend checking out the BankRate.com savings account comparison link above to find an online bank that is offering a higher interest rate. You can easily connect these online accounts to your brick-and-mortar bank’s checking account, and many of them are offering interest rates above 1% per year. Please let me know if you have any questions!
A big thanks to everyone for voting in the poll and generating some good on-site discussion about this very important topic.
The next 3-month poll (up now on the site in the same top left side-bar location) involves the topic of mutual fund expense/fee ratios. In today’s economy, many people use mutual funds to invest for retirement in their 401k and/or IRA accounts. However, since there are thousands of mutual fund options to choose from, it’s imperative to select funds that offer the lowest fees possible while still accomplishing your investment strategy. One way that I accomplish this is through the use of low-fee index mutual funds. But, more on that later after the poll results are tallied! I look forward to seeing how the voting goes!
How about you all? How does your current savings account interest rate compare with either the national average or the results of the site poll? Do the poll results seem consistent with what you’ve experienced as well?
Share your experiences by commenting below!
Ask the Readers – Opinions on the Recent Netflix Pricing Change and Gas Price Level Needed for Behavior Change?
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Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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It’s been a while since I did an “Ask the Readers” post here on My Personal Finance Journey. In fact, the last one I did was all the way back on January 1st of this year when I asked if everyone was being patient about investing in their 2011 Roth IRA or if they were already contributing money to it (like I excitedly was).
Needless to say, it’s been too long! To make up for this, I’ve got a double-feature “Ask the Readers” post for you all today!
Ask the Readers Question # 1: How Has the Recent Netflix Pricing Program Change Affected You?
Netflix is often regarded among frugal living fanatics as a safe-haven or oasis where we can obtain our DVD, movie, Blue-Ray, and TV series entertainment fix for much less than it costs for monthly cable television. Indeed, I am no exception to this rule, being a loyal Netflix user myself.
Because many of their subscribers are very dedicated practitioners of frugal living, it’s no surprise that there has been a significant outcry against the recent increase in pricing of their monthly DVD and instant streaming program options.
As I was putting together the information for this post, I was searching around Netflix’s home page and was somewhat alarmed to see that they don’t clearly list their new prices for their different rental programs. The only way to clearly find this information is to be logged in to your account. In order to shed more light on the new prices, I’ve attached a screen-shot of the different pricing programs at the end of this post. From what I can tell, it appears that they have increased their prices by around 33%.
Ask the Readers Question: How has the change in Netflix’s prices affected you? Did you downgrade rental programs or pay the added costs to keep the same program?
Personally, I have been on the 2 DVD’s out-at-a-time unlimited rental + unlimited instant movie streaming for $15 per month for the past 2 years. When I was informed of the recent increase in the price of this program to $20 per month, I simply told myself that the extra $5 per month isn’t worth it to watch instant streaming movies/TV series. Therefore, I downgraded to the $11.99 per month 2 DVD’s at-a-time program.
Thanks Netflix! You now receive $4 less per month from me! Way to go! However, overall, I am still a big Netflix fan. I believe they still provide a better service than BlockBuster.com and is MUCH MUCH of a better deal for me than paying for cable each month.
Ask the Readers Question # 2: At What Price Does Gasoline Have to Increase to In Order for You to Change Your Everyday Driving Behavior?
According to GasBuddy.com, the current average price per gallon of gas in the United States is $3.69.
Many of my friends drive almost 40 miles to and from work. At a total of 80 miles and figuring 20 mpg average fuel consumption, this adds up to almost $14.76 expenditure in gas per day. Assuming that they make approximately $30 per hour in their job (before tax), the means that they work 30 minutes per day just paying for gas. If you think about it, this type of expenditure can be become very significant over the long term.
Ask the Readers Question: At what price would gas need to rise to in order for you to change your everyday driving behavior?
Personally, I think that my absolute breaking point for when I would definitely have to change my driving situation is if I was having to work 1 hour per day to pay for the gas to get me to my job. If that was the case, I would try to figure out some way to either carpool or move closer to where I work in order to reduce the expenditure. However, I would most likely try carpooling before it got to the 1 hour per day level.
I look forward to hearing everyone’s take on these two topics!
Reference Figure – Netflix Rental Program Prices (not easy to find unless you are signed in and are a current subscriber)
7 Reasons Why Being a Financial Blogger Could Be Better Than Being A Financial Professional
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Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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One comment/question I get asked about once per month is something along the lines of the following:
I enjoy reading your blog! It seems like you’ve got a pretty good base of knowledge about personal finance. Have you ever thought about working the financial industry?
It’s a very interesting question and one that I have given some thought to from time to time because I really do enjoy learning about personal finance. In fact, it probably wouldn’t be all that hard to switch careers because I did get an undergraduate degree in finance as well as engineering. However, my answer is always pretty quickly generated as a firm, “No.”
The reason for this is because while I enjoy learning about finance (and personal finance in particular) as a hobby, being involved in science as my primary career has always been more fulfilling at the end of the day. However, if I were to be in the financial industry, I would probably want to do one of the jobs below (the 2nd one listed would be my first choice actually):
- Work at Vanguard assisting with index mutual funds and trying to make them more competitive by decreasing expense ratios.
- Work as a fee-based financial planner, helping individuals and families get out of debt and save for retirement.
Because I want to make a science-based job my primary career and do personal finance as a hobby, blogging is a perfect fit for me!
And, the other day, I was doing some brainstorming and thought it would be fun to share 7 reasons that I came up with why being a financial blogger might actually be better than being a financial professional. I’ve listed these below. Enjoy!
7. Thoughts of financial bloggers can be conveyed 24 hours a day.
Unlike financial professionals who have to meet with clients to share their ideas, all of the advice and ideas a blogger has to offer is splayed out on a website which can be accessed even when he or she is sleeping. This is one of the cool things that attracted me to start blogging!
6. Bloggers don’t have to answer to clients asking why their investment account balance went down.
From what I’ve read, financial advisers who work with wealthy clients especially have a lot of pressure placed on them whenever their managed account balances go down. Naturally, bloggers don’t have to worry about this.
5. You can have international clients and an international audience.
Blogging enables you to set up your little corner of the Internet and make your ideas accessible to anyone in the world at a computer. Furthermore, you can have clients (advertisers) from all over the world and execute business remotely.
4. Financial bloggers can blog from anywhere in the world.
With blogging, you don’t have to work in a busy office building or a crowded stock trading floor. You can work from the comfort of your own office or home from any location.
3. With financial blogging, you don’t need a finance degree or any special financial certification.
One of the great things about financial blogging is that it is open to anyone who has an interest in it and can generate good conversation, opinions, and logical thoughts. In fact, many of the financial bloggers I know come from diverse backgrounds, and many are engineers.
2. Bloggers do not have to worry about conflicts of interest in what we write about.
For example, investment advisers at a firm like Edward Jones get paid based on commission when you trade stock. So, they get paid only when you buy/sell stock. In other words, growing your account balances isn’t their number one goal because it is not based on how they are paid.
This, in my mind, creates a severe conflict of interest which bloggers do not have to worry about.
1. Financial blogging is not official financial advice.
This is my personal favorite for why financial blogging could be better than being a financial professional, as it relates to the very nature of what financial blogging is.
The purpose of financial blogging is to create discussion and give people ideas to research further. It is not to be used for direct financial advice, as the advice is that comes from a financial professional. However, just between you and me, the advice of some of the good bloggers out there is probably worth every bit as much as the advice from financial professionals.
For example, the disclaimer that is on the bottom of every page of My Personal Finance Journey is shown below – “The information provided on this site is not financial advice, and I am not a financial professional. This is not a recommendation to buy, sell, or trade securities, or to invest in any specific product. I can buy, sell, or hold any positions mentioned on this website at anytime. Thanks for visiting!”
Note: if you’re a financial professional, please realize this list is meant only for fun (not an attack on the financial industry) and that I admire you all very much for what you do.
How about you all? What do you feel would be some of the advantages of being a financial blogger over a financial professional? What are some of the disadvantages?
Share your experiences by commenting below!
***Photo courtesy of http://search.creativecommons.org/?q=blogger#
Tour de Personal Finance 2011 – Final Championship Sprint on the "Parisian Champs-Élysées" of Personal Finance
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Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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The 2011 Tour de Personal Finance has been an absolute 100% success (far beyond anything I could have imagined!). A big thanks goes out to everyone that has participated in the Stages and to the hundreds of voters who have stopped by to support their favorite authors/articles.
Later this week, I’ll write up a Tour de Personal Finance recap, post-race show, and awards ceremony to talk about what happened this year and how I envision the event growing in the coming years. But, that’s enough of that commentary for now!
Without further ado, let’s continue on with the final, 17th Stage (the final championship sprint) of the 2011 My Personal Finance Journey Tour de Personal Finance (to follow all of the action, click on the Tour de Personal Finance category link and scroll down to read all the posts involved in this subject).
Also, if applicable, I will give a brief description of the stage of the Tour de France that took place the same day as the competition.
How to Vote
You can vote for the one article (since there’s only one intermediate sprint today) you’d like to see proceed in the Tour by commenting in the comments section below and telling which are your favorites.
I’ve listed a keyword after each post title to make it easy to vote (as a made-up example, you can just comment: Sprint 1: Mutual; Sprint 2: 401k, etc.) Be sure to comment which one you like the best out of each set of two! Criteria for the best article is completely up to you, but you can use these factors as a guide: 1) post of your favorite blogger, 2) most interesting post, 3) most thought-provoking post, 4) most unique post, or 5) most actionable post.
Here is today’s competitions:
-
This isn’t your grandparents’ recession (Grandparents):
Ever since the recession began I think there’s WAY too much blaming of the victims. I’m good and sick of hearing pundits grumble about how lazy and soft Americans have become, and how we ought to take a few lessons from the Great Depression. Here’s the thing: The world was a different place back then. Heaven knows I’m no apologist for slackers, credit-card spendthrifts or people who won’t take anything but the “right” job, but a lot of the advice our elders offered/modeled isn’t relevant today. Plenty of folks are in big trouble not because they’re lazy, but because of complex personal, local, national and global economic issues.
- If I Had a Million Dollars, I’d Go Into Debt (Debt): What would I do if I won a million dollars? This post describes how I’d invest every last penny, scrutinizing tax benefits, risk, returns, real estate, and why I would go into debt — yes, I would go into debt — if I were a millionaire. And don’t just take my word for it: Einstein backs me up, and so does third-world poverty theory. Read this post to find out more.
Barring a major accident out on the open road, the Australian, Cadel Evans, will end the day as the overall winner of the 2011 race.
Cadel took the race lead by doing a consistent ride throughout the high mountain stages and then throwing down the gauntlet with a STELLAR final time trial yesterday in Grenoble to take the yellow jersey only the day before Paris!
Alberto Contador, the all-around favorite for overall victory this year, came up lacking in the final mountain stages of this year’s race. In my opinion, Contador most likely was the best rider in this year’s Tour de France, but since he doesn’t focus his training solely for victory in the Tour (he wants to win races in May and September as well), he wasn’t in peak form. This just makes me realize and appreciate how hard and rare it is to find a rider such as Lance Armstrong who can win the biggest bike race in the world for 7 years IN A ROW without making a single mistake. It really is a testament to Lance’s ability as a rider.
***Photo courtesy of http://www.flickr.com/photos/petitbrun/5664890889/lightbox/
How Do Your Car Insurance Rates Vary Based on Age, Gender, and Geographic Location?
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Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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One of my favorite topics to ponder over and research is the cost of living differential based on certain demographic factors. Of these, probably the most interesting (to me) is the difference that is often seen in the cost of goods and services based on geographic location. It’s amazing how much you can save simply by locating yourself in the right place!
In my experiences of living in New Jersey, Pennsylvania, Arkansas, and Virginia, I’ve unofficially found that car insurance is no exception to this phenomena. During my time in PA and NJ, I found that many of my friends were paying upwards of $3000 per year in car insurance. When I told them that several people I know in Arkansas pay $1200 per year, they were simply amazed!
Because of the drastic difference in the price of car insurance I’ve heard from my friends and wanting to save money on car insurance being a topic applicable to almost everyone, I thought it would be an interesting thought exercise to do a little online research to see if significant price differentials exist based on other demographic factors.
Investigation Setup
Insurance Provider
According to CarInsuranceCompanies.com, the largest car insurance provider in The United States is State Farm. State Farm has a total of 75 million policy holders, corresponding to 18.7% market share. This is quite impressive!
When I first started looking in to this investigation, due to State Farm’s popularity, I was hoping to use their car insurance quotes tool to generate car insurance premium prices based on the different demographic information we input. However, since you have to input the specifics of your current car insurance coverage, using State Farm’s quote tool would be far too complicated for a broad analysis like we are looking for.
Because of this, my focus shifted to reviewing previously-published studies on the Internet.
How Do Car Insurance Premiums Vary Based on Age?
In my quest to find a specific answer to this question, the best resource I could find was the table below from Bob @ Christian PF (originally published on Insurance.com). I added a % Difference column to Bob’s original table in order to specifically see the change in premium rates at different ages. It definitely makes for some interesting analysis!
From the table above, the most shocking finding is that it appears that between the age of 16 and 25, car insurance premiums decrease by almost 50%! Wow! That’s truly amazing! However, having been a driver during college and especially high school and seen the increased risk factors for young drivers, I cannot say I blame the insurance companies for charging high premiums. It’s probably smart business with how likely 16 year old driver’s are to get in a wreck.
In my experience, the specific risk factors present to drivers in high school are as follows:
- Driving with a full car of people – In high school, within each group of friends, there can exist a pretty significant range of ages (significant in high school terms being 1 year – haha). Because there are fewer numbers of drivers, more people are likely to pack in to one car. Naturally, with more people in the same car comes more talking and distraction, leading to an increased risk of accidents.
- Loud music – High school kids are also more apt to listen to very loud music (subwoofers with huge amplifiers were a popular item among my high school crowd!). This loud music can take the driver’s attention away from the road and increase the risk for accidents to occur.
- Driving being a “novelty” – Since driving is a new experience in high school, kids are likely to spend an enormous amount of time simply “cruising” around town. Many times, this takes place late at night, which can increase the exposure of the driver to accidents and/or drunk drivers.
Continuing with the analysis of the insurance rates based on age, it appears that prices generally decrease until retirement age (maybe when Alzheimer’s disease starts to kick in?). However, prices do increase slightly in the mid 30’s. One hypothesis I have for this increase is that drivers often have young children at the age, which can lead to increased distractions and more accidents. What do you all think?
How Do Car Insurance Premiums Vary Based on Geographic Location?
The best resource I found answering this question was the table below from The Insurance Information Institute.
Examining the table above, it’s not surprising to me that 7 of the top 10 most expensive states for car insurance either are Northeast states or contain many Northeast state retirees (Florida). However, it’s surprising to me to see Louisiana on the list as having such high car insurance premiums (pretty much the same as New Jersey). Does any one have any guesses to why this is? I thought Louisiana was a pretty rural, low-traffic state…
The states with the lowest cost for car insurance premiums were Iowa and North Dakota. This makes intuitive sense to me since these states typically have low traffic and low population density. What’s wild is that car insurance rates in these two states are over 50% lower than rates in DC and New Jersey.
How Do Car Insurance Premiums Vary Based on Gender?
According to a recent study published on PRweb.com about California car insurance premiums, the average annual policy for a male driver was 20% higher than for a female driver. They also found that the gender-pricing gap decreases as driver’s get older, with a fairly minimal gap being present above the age of 25.
However, at the age of 18, car insurance policies for male drivers can be upwards of $1,500 more than for females. Pretty wild stuff!
There is, of course, logic behind why the car insurance companies charge more to insure male drivers (except in five states where it is against the law to charge different rates for females than for males). According to the study, males are 196% more likely to be involved in a fatal car crash than a female.
In my opinion, the reason that guys are more likely to be involved in a fatal car crash is simply because we are not as smart as women when it comes to cars (sorry guys). In my experience, guys are more likely to participate in dangerous activities simply for the sake of “playing” with their car, whereas women typically just want to use the car to get where they are going.
For example, guys would be tempted to participate in the following activities, whereas I would think that girls would have no interest in doing so…
- Going 140 mph on the interstate simply to see how fast their car can go.
- Go shopping cart bowling at 80 mph slamming the shopping cart in to a concrete post.
- Go down a hill in a neighborhood street at 75 mph (in a 25 mph zone).
- Doing doughnuts in a parking lot or a field simply for the fun of it.
Needless to say, it’s very interesting to explore the fundamental psychological and economic differences between being a male and female. I think the next topic that I will explore regarding these gender gap differences will be seeing whether males or female typically get cheaper life insurance. It should be an interesting investigation!
How about you all? Have you experienced these or any other trends in car insurance premium rates?
Share your experiences by commenting below!
***Photo courtesy of http://www.flickr.com/photos/madaroni/4964347820/sizes/l/in/photostream/
Tour de Personal Finance, Stage 16, Round 5 – Posts 1-32
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Welcome to My Personal Finance Journey! If you are new here, please read the “About” or “First-Time Visitor” pages to find out more about us. If you would like to receive free updates on articles like this by email, then sign up here or you can subscribe to the RSS feed. Also, check us out on Twitter or Facebook. Thanks for visiting! Keep on learning!
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Without further ado, let’s continue on with the 16th Stage (the first and only Stage of the 5th round of competition) of the 2011 My Personal Finance Journey Tour de Personal Finance (to follow all of the action, click on the Tour de Personal Finance category link and scroll down to read all the posts involved in this subject).
Also, if applicable, I will give a brief description of the stage of the Tour de France that took place the same day as the competition.
How to Vote
You can vote for the one article (since there’s only one intermediate sprint today) you’d like to see proceed in the Tour by commenting in the comments section below and telling which are your favorites.
I’ve listed a keyword after each post title to make it easy to vote (as a made-up example, you can just comment: Sprint 1: Mutual; Sprint 2: 401k, etc.) Be sure to comment which one you like the best out of each set of two! Criteria for the best article is completely up to you, but you can use these factors as a guide: 1) post of your favorite blogger, 2) most interesting post, 3) most thought-provoking post, 4) most unique post, or 5) most actionable post.
Here is today’s competitions:
- Getting Started With Your Money Idea (Idea): Don’t know where to start or how to promote yourself? This article gives you the starting steps as well as a stack of ways to advertise and promote for free or very cheap. It is also an excerpt of my book 365 Ways To Make Money.
- This isn’t your grandparents’ recession (Grandparents):
Ever since the recession began I think there’s WAY too much blaming of the victims. I’m good and sick of hearing pundits grumble about how lazy and soft Americans have become, and how we ought to take a few lessons from the Great Depression. Here’s the thing: The world was a different place back then. Heaven knows I’m no apologist for slackers, credit-card spendthrifts or people who won’t take anything but the “right” job, but a lot of the advice our elders offered/modeled isn’t relevant today. Plenty of folks are in big trouble not because they’re lazy, but because of complex personal, local, national and global economic issues.
It appears that the Tour organizers are trying to deliberately keep the race as close as possible as long as possible.
Tomorrow and the next day are uphill finishes, and there is a 41 km individual time trial the day before the race finishes in Paris. These challenging Stages should put a positive ID on a winner! My money is on Alberto Contador for taking out the win at the end!
***Photo courtesy of http://www.flickr.com/photos/brettlider/211108923/sizes/l/in/photostream/