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Plain Money ideas

About “Plain Money”

Getting a Grip on Your Money was published in 2002 and had a good five-year run. It was featured on nationally syndicated talk shows, published overseas, and used for group discussions in a variety of settings. The book is still available from Amazon.com and free leader resources are available but now that its active promotion has ended, this site seeks to promote and extend the “plain money” theme of the book.



Categories
Plain Money ideas

Can you automate good investing habits?

Blooom piggy bank logoThe Plain Money approach to investing isn’t fancy — it’s just developing some good habits: buy and hold index funds, keep costs low, keep things in balance. But in some 401(k) situations that’s not easy. You may have multiple accounts, some left over from earlier employers. To do the job right, you need to keep up with the available investment choices and make sure your portfolio doesn’t get out of line.

Or you could use a service like Blooom, which I’m currently testing. So far I’m impressed! I have some tax-advantaged accounts from a couple of earlier jobs and several others with my current employer. I signed up with Blooom and it took only a few clicks to get my accounts in much better shape. Here’s what Blooom did for me:

  • Using only the assets available and keeping my balances with my current provider, found lower-cost alternatives with similar performance.
  • By requesting rebalancing through my current provider, lined up my asset allocation with my investment goals.
  • Set up future rebalancing to keep my asset allocation in line with my goals.

The cost is affordable: $10 a month for a single account. If you have multiple accounts (as I did), there are discounts. Quick chat support helped me get everything set up.

The one disadvantage was that Blooom could not manage all of my accounts with my provider — and those unmanaged accounts are heavily invested in bond equivalents. So I had to adjust my Blooom-managed accounts away from bonds to get my overall percentage of stocks and bonds right.

In my judgment, Blooom will repay its modest monthly fees many times over, just in finding ways to reduce investment fees. And it already has shown me some investment alternatives (low-cost passively managed assets, of course!) that I didn’t know were available in some of my older investment accounts.

You can even get your first month free at this link for Plain Money readers:
Try Out Blooom. If you do try it out, please let me know your experience. I’ll update this post from time to time and let you know how things are working out.

That link again: Try Out Blooom free for a month.

Full disclosure: If you do try out Blooom, I will receive an affiliate referral premium.

Finally, this obvious question: “Hey, you’re a Ph.D. in economics, can’t you figure out what Blooom does by yourself?” And the answer is yes, in principle, but I don’t have the time or patience to investigate everything about my old investment accounts. Blooom is essentially automating the principles that I advocate in Getting a Grip on Your Money.

Categories
Observations

Teaching note

I love to teach using Socratic dialogue, with a few extra twists thrown in. This video explains:

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academic mice

Virtuous sign

One of our academic mice puts up a yard sign in three languages, but what does it say?

 

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Observations

Econometrics

When I teach econometrics it’s fun (really!), but there’s a lot of power in econometrics for good or ill. Econometrics can be used honestly to study and understand the material world (my favorite use) or dishonestly to advance the agendas of corrupt politicians, executives and others. At one point the practice of econometrics got so bad that a leading practitioner wrote an article, “Let’s Take the Con Out of Econometrics.” That’s the agenda in my class — no con job, just deliberately seeking the best that econometrics has to offer.

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Plain Money ideas

Beating the market?

Have a look at this financial institution’s commercial, especially the beginning:

Did you see that smart investor take a picture of that tech box and immediately get information on the stock of the company that made it? The implication is that the investor can now trade ahead of the market — for example, buying this promising tech company before others find out. Seriously? Do you think a tech startup can take a new device and actually deploy it before the smart money knows? If this app encourages you to make stock decisions based on random encounters with new products, you’d be better off (as an investor) taking a hammer to that smartphone. Instead, buy and hold index funds.

A final funny note: The title of the ad is “Where Smarter Investors Will Always Be.” The behavior depicted in the ad is “Where Ignorant Investors Underperform.”




Categories
academic mice

About “academic mice”

“academic mice” is a light-hearted strip about academic life that I draw. New contributions are sporadic at best, but I hope you enjoy what’s here (simultaneously posted to Facebook)!


Categories
academic mice

They don’t look

If you’re a good academic mouse, you never look at your student ratings on ratemyprofessors.com — or at least you don’t let on.

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Observations

A few rogue notes

Just a few things about Rogue One: A Star Wars Story (I’ll leave the big reviews to others):

  • I like the Star Wars universe, so I’ll happily go there. Yes, I’m a fan.
  • In Rogue One, nothing surprised me. Of course, the overall plot line was well known, since in Star Wars IV: A New Hope [SPOILER ALERT!] we see that the rebels do successfully get the plans to the Death Star and Luke blows it up. But more than that, even at the micro level every scene was highly predictable (blaster battle, covert mission, blaster battle . . . you get the picture).
  • Jyn Erso was a great character, well-played by Felicity Jones (a Star Wars lead being a woman without the film self-consciously pointing out, “hey, look, our lead is female!”)
  • I liked the back story about why the Death Star was so vulnerable to a lucky hit by Luke — the conscientious act of a scientist who had been forced to help the evil Empire.
  • When  Jyn Erso and Cassian Andor met their end — the end of any rebel on an impossible mission — we got a fading into yellow light instead of a tender farewell. Not only was it easier on the fan base; it also leaves open the possibility that we’ll see Jyn again. As uproxx.com says, “Nothing is impossible when you are one with the Force and the Force is with you.”

And finally, as usual I have mixed feelings about the Force. It’s a neat storytelling device, but in our world there is a stronger force and a deeper magic: “There is no greater love than to lay down one’s life for one’s friends.” (John 15:13, New Living Translation)




Categories
Observations

Election year advice

In election years, people sometimes ask me who should get their vote, based on economic policy. I don’t make endorsements, but I do try to help people understand some things about economics and candidates:

  • They can’t implement their policies. In almost every case, an elected official is unable to act alone, but instead must compromise and build coalitions. If you like a candidate’s stand on trade or the minimum wage, fine — but don’t assume that electing that person will get you the policy.
  • Their policies wouldn’t have the intended effects. Political campaigns tend to overstate the effectiveness of policies. Raise tariffs on foreign goods? Fine, but don’t expect a bunch of jobs to come flooding back to the U.S. Take the minimum wage up to $15 per hour, no exceptions? OK, but if you’re a non-economist you’ll probably overestimate the effects.
  • Political campaigns understate uncertainty. The fact is, we often don’t know what the effects of a policy will be. It’s hard to admit that in a political campaign but we economists know it’s true. The range of possible outcomes from any given policy is vast.
  • If you rely on social media, you’re too sure about economic policy. Facebook, for example, is great for keeping up with friends but a really poor way to stay informed on economics. Why? Because you’ll see a lot of opinions you already agree with — and not so much from the other side. Thus it’s possible for you to link to a really strong article and get nothing but affirmation from your friends. You’ll think only a dope could believe differently.

Be especially aware of Facebook links to articles that say “there’s no evidence” on a particular side of an economic controversy. If it’s a controversy at all . . . trust me, there is evidence on both sides. I have a graduate degree in economics and I’ve been studying economic policy for 40 years now, and I am much less certain about the effects of a $15 minimum wage than the average Facebook poster, pro or con.

So who should get your vote? Look for a candidate who shares your values, and disregard promises about economic policy.

WONK ALERT: This is “down in the weeds,” but in case you want to know, here are the two big problems that make economic policies less effective and more uncertain than political campaigns lead you to believe: