Friday Reading: Merry Christmas and Happy New Year

It’s been another year. I thank you for your reading and commenting on my articles. I hope you found at least some of them helpful. If I don’t post again before the new year, let me say it now,

Merry Christmas and Happy New Year!

The new year will bring some changes. For one I will have a new job (more about that later when it’s finalized).

Some noteworthy articles I read in the last two weeks:

Are Income Replacement Funds Better than Annuities? by Mike Piper at Oblivious Investor

If I have only two choices: 100% in an income replacement fund or 100% in an annuity at age 65, I would say yes, an income replacement fund is better than an annuity, especially with a low-cost fund by Vanguard. If it’s only for longevity insurance covering basic needs, then an annuity may be OK. Just because you may be able to do better managing several funds on your own doesn’t make an income replacement fund worse than an annuity.

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IRS Issues Guidance For New 3.8% Medicare Tax On Net Investment Income by Michael Kitces at Nerd’s Eye View

The S-Corp dividends (with active participation in the business) apparently go into a limbo in a good way. They are neither earned nor unearned for Social Security and Medicare tax purposes. A huge loophole right there! I think they should definitely count as earned.

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How James Cramer made me 22 percent in 22 days by Allan Roth at CBS MoneyWatch

Investment advisor Allan Roth traded against James Cramer’s sell recommendation and made 22% in 22 days. It shows how much you can make if you make the right calls! The lesson is when you see a good opportunity, you should put more money behind it.

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Lousy 401(k) Plan? – Strategies to Make the Best of It by Roger Wohlner at The Chicago Financial Planner

Don’t be discouraged by a bad 401(k) plan. Contribute to the max anyway. A poor 401(k) still beats investing in a taxable account. Chances are you won’t be with that plan for 30 years. When you switch jobs, you can rollover the balance to your own IRA.

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The Apple Price Premium: Are Mac Computers, Ipods and Iphones Worth the Extra Money? by Harry Campbell at Your Personal Finance Pro

For work reasons they gave me an iPhone 5. I find myself still grabing my 3-year old Nexus One running Android when I’m at home.

The lack of inter-application communication in iOS is appalling. In Android, every app can announce to the OS it’s a target for sharing. Every source app just tells the OS it wants to share out something. Then every sharing target shows up in a list. The Android OS brokers this many-to-many relationship. In iOS, I’m at the mercy of the source app. If the source app X didn’t implement sharing to app Y, I just can’t go from X to Y.

In Android I type a few letters and choose a word from a list of suggestions. In iPhone I have to type more letters to get only one suggestion that’s often not what I want. Come on Apple! You are 3 years behind!

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Spreading Out Investments Over Time by Michael at Long-Term Returns

The forever question about lump sum versus dollar cost averaging. Buying on a dip would be a third option. If you are not too greedy, more often than not you will see a dip. I’m planning to do it again with my 2013 IRA contributions. Let’s see how long I will have to wait for a 2% dip.

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Should You Secular Market Time? by Rick Ferri at RickFerri.com

I skipped this article when I only saw the title. I thought the obvious answer would be no coming from a well known advocate of passive investing. I was surprised.

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High-Profile Studies Overrate Going to College and Picking the Right Major by Andrew G. Biggs and Abigail Haddad at The Atlantic

The authors made some good points there. They basically said those who choose to go to college or pick science majors already have better skills and abilities. They would make more no matter what. Maybe. I think the only objection to going to college is cost. I read Ivy League schools are actually cheaper than public universities for students from middle class families . So you might as well go and pick the right major whether doing so is overrated or not.

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What happens to your credit score if you cut up your HSBC card? by Brent Hunsberger at OregonLive

Basically nothing. I closed my oldest credit card back in 2007. My credit scores weren’t affected.

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Increasing Taxes? Not that worried. at The White Coat Investor

I’m not that worried either. Comparing only with the previous year is silly. One could say everybody already had 10 long years of lower taxes. Now it’s time to go back to normal. I’m very disappointed that our leaders don’t have the courage to tell people this simple truth. If the 2001 and 2003 tax cuts were a mistake that we couldn’t afford, correct the mistake. Don’t perpetuate it.

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Another Kind of 1 Percenter at I Am 1 Percent

How did this guest post author and his wife get to a net worth of over $7 million in their mid-40′s? Not by paying less for New York Times subscriptions or booking flights 6 months in advance.

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Who’s Afraid of Chained CPI? by Zachary Karabell at The Atlantic

I’m not. I like what this author said: "There is nothing sacrosanct about the current measures, and no sacred cows are at risk with the president’s proposal to adjust the CPI to reflect a more fluid measure."

***

Any Monkey Can Beat the Market by Rick Ferri at RickFerri.com

Monkies throwing darts not only match the market average but 98 out of 100 actually beat it! Don’t believe it next time you hear someone say nobody can beat the market. It’s not true.

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Software picked, likely related posts:

• Bought Nothing on Black Friday
• Friday Reading: 401k Fees
• CreditCard.org Top 100 Blogs to Watch in 2007

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