Why Financial Plans Are Worthless

Carl Richards is a CFP Professional who blogs about financial matters at his own site, Behavior Gap, and on the Bucks portion of the NY Times online. He really understands what's important with plans, planning, and the whole process. And for those of us who think in Venn diagrams (can I see a show of hands? One, two, . . . ok, so all two of us) he usually has a treat like the one below.

His newest post "Why Financial Plans are Worthless" is especially good.

Warren Buffett on Gold

“It gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.”

Top 10 Investment Tips from the Ancient Texts of Classic Rock ‘n’ Roll

Justin here. I found this absolute gem of a article on the CFA Institute's website. Written by Thomas Collimore, CFA, (Director, Investor Education for CFA Institute) it has some great tips and might even make you hum some classic rock. Here's a sample:

8. “Lady Madonna,” The Beatles (1968)

“Lady Madonna, children at your feet,
Wonder how you manage to make ends meet.
Who finds the money when you pay the rent?
Did you think that money was heaven sent?”

Plan, plan, and then plan again. Committing yourself to a realistic investment plan requires understanding your resources and obligations as well as the essential attributes of your future desired lifestyle. As you plan your investment strategy, leave room for investment underperformance. Committing your plan to writing may force you to address issues that you might otherwise glide over.

Go here for the full list of tips inspired by hits from bands like The Eagles, Led Zeppelin, Rolling Stones, and Aerosmith touching on topics such as Expenses, Longevity Risk, Taxes, and Professional Designations. It's rare to find something worth reading that's this easy to read. Good work Mr. Collimore.

The 'Are You Unemployed' Game Show

Justin here. The folks at Mint.com have done it again. Here's a great video explaining real unemployment. Kinda makes you think that the "great" news last week wasn't all it was cracked up to be.

Everything I Needed to Know . . .

Justin here. Everything I needed to know about fighting a recession, I learned from Tate Street Coffee House. I took this picture the other day while drinking my regular coffee (w/ half and half, spenda, and a packet of raw sugar); it says it all:

Innovate - See the bar there? TSCH is offering wine and beer now. Not just Keystone Light either, but an organic brew made from hops grown by owners Matt and Anne. Brilliant.

Do it Yourself - See that guy painting the ceiling during business hours? That's Matt, the owner. He does a bit here, a bit there. Never closes down business, never pays painters. And it gives the customers something to talk about and check in on. Two Birds/One Stone.

Know Your Customers - Again with Matt . . . he, Anne, and the other employees seem to know everyone by name and they ask about their interests and genuinely want to know their customers. I've rarely seen it done better.

Who Is Paying Taxes?

Justin here. We're getting near year-end and so taxes are on the brain. I ran across this graphic from Mint.com. They do some really great visual explanations (they recently did one on reverse mortgages) but, seeing as though my second language is "Charts and Graphs", they could probably make a diagram about paint drying and I'd be fascinated. Enjoy.


Personal FinanceSoftware – Mint.com