This book review is a long time coming! It’s been sitting on my desk for a long time, but a week of paternity leave has allowed me to finish it and put my thoughts about it down on paper (figuratively, of course).

Secrets of a Stingy Scoundrel: 100 Dirty Little Money-grubbing Secrets is written by Phil Villarreal and is available from Skyhorse Publishing. It’s laid out as a guide book – with even its small size tempting you to throw it in your backpack as you leave the house in the morning. However, don’t let its appearances fool you – the book is in no way a guide book to how you should actually save money. Well, not if you have morals at least.

The book contains a list of ideas that you and your college buddies would come up with after one too many drinks and someone asked the question, “dude… how many ways can we come up with to mooch off people?” It’s only in this intoxicated state that anyone would suggest tip #95: pouring the milk left over from your morning cereal back into the carton. After a few of these money-grubbing secrets you’ll quickly realize that this book is best reserved as a gag gift for your tight-wad friend, or for that awkward corporate white elephant gift exchange. Tip #21, dumpster-diving outside college dorms at the end of the semester, isn’t very practical for most people, but Phil’s description of the adventure will make you laugh. So will his idea to collect every coupon he can get his hand on (tip #9) in hopes that the 1/100th cash value of each one will one day add up to big bucks.

Now I must admit there are a few “rare gems” in the book that normal people may use. Tip #33 for example, describes some humorous tactics while negotiating with car dealers. We all know how much I hate car salesman, so I encourage the use of this gem as often as necessary. Tip #42 is also a good one – negotiating with your bank’s customer service rep to waive insanely high ATM or late fees (hint: threatening to close your account usually seals the deal).

So if you’re looking for some humorous bathroom reading or need to find the perfect gift for the roomate who just won’t chip in the $5 for cable because he “never watches TV” then go ahead and pick up the book. If you’re looking for serious financial advice and other money-saving tips, might I suggest a little gem called beancounterblog?

I wrote a couple months ago about Kevin Trudeau. I picked up his tome Debt Cures They Don’t Want You to Know About from the library out of morbid curiosity.  I haven’t finished the book, but there’s one quote that’s just priceless.  This quote sums up the book and the attitude Trudeau is selling with his book.  He says:

“Most debt and credit books on the market today talk about how to cure debt by curbing your spending and ‘cutting out fat’.  They make you think that it is something you did that created the wild debt problem.” (pg. 218)

That’s an interesting perspective.  Never-mind your wild spending habits, because the credit card companies are out to get you.  It’s not your fault at all.  Granted there are people out there who have had some kind of trouble with a job loss or medical problems where their credit soars, but that’s not the majority and people are ultimately responsible for what happens to themselves.  You are the gate keeper to your life and your money.  It is absolutely misleading for Trudeau to say imply that you are not responsible for your debt and all the other books are wrong.

It’s not that I don’t think credit companies haven’t done shady things, but only you can protect your money.  Debt cures should be about learning to manage your assets.  Not everybody is in serious debt (mortgages and cars excepted), so they must have learned to control their spending and consciously chose what they want to buy.  Trudeau also refers to the movie Maxed Out numerous times.  While the movie is rather good, I think he abuses the stories in the film to make his case.

I will write more on the book once I have completed it.  It’s not a total piece of trash, but I certainly wouldn’t recommend it.

Karen Blumenthal wrote an interesting article in the Wall Street Journal August 25, 2009 entitled “How I Got Burned by Beanie Babies“.  She relates her experience in the Beanie Baby hype to recent bubbles we’ve experienced.  The article is not ground-breaking, but it deals with a lesson that never seems to sink in.  The article can be summarized with this quote: “In a speculative environment, just about the only ones who profit are short-term traders.”  It’s a tough lesson that is too often learned the hard way.  There were a lot of people who thought that Beanie Babies would hold their value, enough to cover college for their kids.  Turns out that’s only true today if the kids get a full-ride scholarship.

Blumenthal relates her experience with Beanie Babies to several bubbles and a little about how the hype builds.  A lot of things are like that.  One thing that comes to mind for me are sports cards.  I remember collecting baseball and hockey cards thinking that someday my collection would be worth a lot of money.  Unfortunately, cards don’t hold their value very well, speaking generally.  Rookie cards tend to be the prized possession, but those aren’t even a guarantee.  In 1991/2 I purchased an Ed Belfour* rookie card for $8.00.  Apparently If I’d waited almost 20 years, I could get the card for $1.25** at Check Out My Cards.  I can now pay for .5 nano-seconds of my kids college education.  Even if I could sell the card for $8.00 today, I’d still technically be losing money because inflation.***   That’s not the only card that hasn’t turned out to be the gold mine I expected (I’ll touch on some of my other sports card investment fantasies in a future post).  Granted, there are cards that hold their value and are worth the money, but they are rare and generally are at least 40 years old (They tend to have names like Mantle on them).

It all goes back to the quote above that short-term investors are the only ones to make the money.  There’s no way to predict when a bubble will burst.  Even when an expert nails it, it’s still just a guess, educated and informed as it may be and s/he may be wrong the next time around.  I’m not saying you need to avoid the bubble entirely, just know that you need to get in and get out quick.  My problem was I bought the hockey card at it’s peak.  I don’t think the price went up much past $8.00.  That’s why you need to know what you’re in for, because you may be left holding the bag (you’re lucky if that’s all you’re holding).  That being said there may be instances that holding on may be worth it for the extreme long hual, but you still want to get in low.  Once the real hype has already begun, it’s probably too late.  You need to be able to hold on longer than the crash.  Beanie Babies may be valuable again someday, along with my hockey card, but that may not be for another 100 years.  Then there’s always inflation.

The key to not falling victim is to avoid the emotional rush.  It’s not unlike the emotions that gamblers feel in the casino when they think they might just hit the big one.  Honestly, I find it hard to feel completely sorry for people who lost in the housing bubble or a Madoff scheme.  So many went in thinking they would make a killing and they should have known the risks (Those who returned money after making a killing with Madoff honestly deserve the Medal of Freedom).  On top of that, they should have been aware that things were too good to be true.  It’s that rush or emotional signal saying “you’re gonna make a killing” that hijacks the sensible center.  BUYER BEWARE is the single greatest advice for anything.  But I digress.  I’ll close with another Blumenthal quote “If your investing horizon is too short to take the chance, you should avoid taking the risk.”

*At the time Belfour was a standout rookie goaltender for the Chicago Blackhawks.  Many thought he would be the Wayne Gretzky of goal-tending.

**That’s 50% of the regular price even.  The worst is I ended up with the very same card a week or two later in a pack.

***Today I’d have to sell the card for $12.65 to make a profit.

When traveling abroad, one thing you always need to look out for are the pick-pockets. Well, in London a new phenomenon has emerged called “Put-pockets”.  Rather than stealing your wallet, these former pick-pockets are sneaking small amounts of cash into the pockets/bags of unsuspecting folks.  It’s organized and the cops are aware of the plan.  So, if a pick-pocket gets caught, can he try and claim he was really just a put-pocket?

Giving to charity is certainly noble, but is it always the best thing? Well it might not be if your selected charity doesn’t get much of your dollar to the mission you think you’re supporting. But how do you know how well a charity does in this regard? Try Give Well. They rate charities on their efficiency in supporting their stated mission.

We may be in an economic crisis at the moment, but there are still people who maintain a positive outlook.  One of those people is Alex Tabarrok.  Below is his speech from the TED (Technology Entertainment Design) Conference held this last February.  His talk focuses on globalization and the positive effects it has had on other nations and why things will continue to get better. Though it clocks in at about 15:00, it’s well worth it.

Kiplinger’s Personal Finance has a nice article called 20 Ways to Waste Your Money.  It’s an article that shows some ways to spend your money a little more wisely.  Some of the ideas have been discussed on this blog, but I found some other excellent points as well.  One point that was new to me was about using the dollar store.  I tend to avoid those stores, but it’s actually a good place to get greeting cards of 1/7 of the regular price.  I found the article good for all economic times, not just recessions.

Here’s and iteresting video brought to you by Reason TV. It’s about the stock crash that Japan suffered in the late 80′s and how the current US economy mirrors that event, down to it’s reaction.