Carnival of Personal Finance Favorites

Mrs. Micah put together a great Carnival of Personal Finance this week.   Here are some of my favorite entries:

Free Stock Market Tips has written a great post, Is Trading For You? It hit home for me, considering my recent ponderings about whether I should be more actively engaged in managing our small stock portfolio.   The conclusion of the article is that investors with small portfolios (we definitely fit that category) will spend more in trading fees than they will earn in returns.   I have to say, this goes along with my gut feeling that I’ve always had about investing, which is that I’m better off in an index fund that I just contribute to and leave alone.

My Dollar Plan has compiled a list of 25 Reasons To Love Credit Cards.   She has 89 credit card accounts (!!) and plays the credit card arbitrage game, which would give me cold sweats.   But I’m firmly in her camp of loving my credit card.   We pay our bill in full every month, so we don’t pay interest.   We get about $150/year in cash back awards, and pay $19/year to have the card.   It’s linked to our bank account, so when I go online each morning to check our bank statement, I can see the credit card statement too.   And paying the bill is just a matter of transferring cash from the bank account to the credit card.   Of course we have had billing errors and mistakes in the account over the years.   But I don’t see that as “evil” behavior on the part of the credit card company.   That would be a pretty pessimistic view, considering how many other types of companies I’ve dealt with that have also made various errors along the way.   I’m an insurance agent, so I spend my days dealing with insurance carriers, and the errors are many – that’s just part of life, not specific to credit card companies.   How we handle corporate mistakes says a lot about us – do we flip out and accuse the company of evil-doing, or do we calmly request that the problem be fixed and go on with our lives?   Credit cards are a lot like life in general – they are what you make of them.   Make poor choices, and it will cost you.   Consistently make good choices, and you’ll be fine.   But one way or another, we’re each responsible for the choices we make.   The credit card debate is on – there are several posts in the carnival about the relative merits and evils of those little plastic rectangles.   Check them out and see where you stand.

The Dough Roller has put together a comprehensive post comparing the performance of low cost and high cost mutual funds.   Turns out that over long periods of time (20 years), the mutual funds with the best performance have an average expense ratio of 1.00.   When I look for funds, I never consider the ones with expense ratios above 1.0, so this is good news for me.

All in all, a good carnival.   Lots of work for Mrs. Micah, and lots of good posts.   Happy reading!