Don’t Quit Your Day Job – Personal Finance, Economics and Investing

A collection of good links and carnival hosts from the week starting August 31.

Sometimes budgeting tricks undertaken by the Federal Government boggle the mind. Take, for example, the Treasury debt ‘held’ by the Social Security Trust Fund. The trust fund operates much like a pyramid scheme… except investors are new generations of workers and they have no way to opt out.

This article is not about Social Security. It’s about the Federal Deposit Insurance Company, better known as the FDIC.

I hope I convinced you in my earlier article you’ll soon be dealing with higher taxes. I’ve got some more slightly depressing news for you… you might be dealing with a reduction in the amount you can contribute to your 401(k) in the near future.

Yes, as Robert Powell says in this MarketWatch article, to go along with retirees not getting an increase in their Social Security payments, you may be losing some of your ability to sock away money in your 401(k). Nice.

Ever made a mistake in investing? Yeah, I bet you have. I have too.

The reasons that investors make mistakes are numerous and hard to detail, but the Wall Street Journal took a really good shot at it today. Covering everything from the pain of selling at a loss to mental accounting, it’s one of the best personal finance articles I’ve read in a long time. Oh, and I read a lot. Everyone has biases which make mistakes possible, the question is how can we recognize them and adapt? Read on…

A collection of links and thank yous to carnivals and good stories from the week.

There’s nothing worse than having something taken from you that you once had. As Alexis de Tocqueville remarks so elegantly in Democracy in America, “The heart of man is not so much caught by the undisturbed possession of anything valuable as by the desire, as yet imperfectly satisfied, of possessing it, and by the incessant dread of losing it.” Citi Cards stared down the rule makers, and unfortunately for their responsible customers, they blinked first. Maybe I’m being too melodramatic, but what I’ll illustrate in this article is merely symptomatic of the sweeping changes you may see in the credit card industry in the near future.

First for some good news: the United States still has a debt rating of AAA, according to Moody’s. However, it’s probably in the country’s best interest to keep an eye on increasing deficits before they get too large. That’s what the site I’m linking you today helps you do – keep an eye on the real time US deficit, and some of the unfunded liabilities on the books. I present: the U.S. Debt Clock.

Recently I received an out-of-the-blue request from Keith Morris, the editor of the new LifeTuner Chat Carnival and the Community Manager for LifeTuner, to write an article for the upcoming carnival on “Financial Lessons Learned the Hard Way”. First off, I’d like to thank Keith for tossing an invite my way and having the optimism to think that I might have something interesting to contribute. I hope I can offer you some first person narrative which you enjoy enough to finish. That’s the thing about introspective pieces… I wonder the utility my experiences have to you readers? Well, let’s toss aside the deep commentary and cornucopia of supporting links for a second and do some old fashion writing. Who’s with me?

I’d be remiss if I didn’t highlight Warren Buffet’s post today in the New York Times. Buffet is never lacking with a quote or an opinion, and on the topic of deficit spending he’s no different. Hilariously, he refers to the massive influx of liquidity into the economy as “Greenback Emissions”. I definitely agree with Buffet on this topic; we’re in for a pretty good amount of inflation if the government doesn’t dial back it’s money printing efforts.

According to this post at Real Clear Markets, foreclosures in July in the United States are overwhelmingly concentrated in a few states. Yes; you know that the sunbelt states have been hit hard by the mortgage crisis, but the pain must be spread around nationwide, right? Well… maybe not as much as you think. California, Florida, Nevada, and Arizona make up a whopping 57% of the nation’s foreclosures.