Black Coffee: Smart Investments, Dumb Collectibles & Dubious Guitar Solos

It’s time to sit back, relax and enjoy a little joe…

Welcome to another rousing edition of Black Coffee, your off-beat weekly round-up of what’s been going on in the world of money and personal finance. Here’s what caught my attention over the past week…

Spammers are a funny lot. Those who try to pull money scams are the funniest, mainly because they are so damn stupid. I received yet another email this week from some loser trying to convince me I am the heir to a £5.6 million fortune belonging to a dead man from Great Britain I’ve never met.

The best part of the email I received from the “deceased’s” “lawyer” was the subject line, which was entitled: “2nd Notice Again!” Heh.

I think most people with a working brain would call that a third notice.

Blogs I’ve Been Following This Week

Monevator – How Compound Interest Can Save Our Pensions. For a brief instant, I had half a notion to contact the Investor, who is based in London, and have him deal with the dead chap’s crooked “lawyer” — in exchange for a percentage of my “inheritance,” of course. But then I read his pragmatic post, which, in a roundabout way, reaffirmed why it’s smarter to make your own fortune leveraging, what Albert Einstein famously called, the most powerful force in the universe. Than again, there are other legitimate ways to build wealth too. For instance:

Afford Anything – I’m Investing 100 Percent of My 2012 Income. Says Paula: I work alone. My impact is limited by my time and skill, instead of being multiplied by the talent of my team. Uh huh. Which is why working with a team of talented individuals will never work for me — the “impact” of my contributions is essentially zero. (I know. Only the nerdy readers will do the math and laugh at that one.)

Financial Uproar – What Role Does Luck Play In Accumulating Wealth? Uh oh. It looks like Nelson got irritated by another blogger who, he felt, insinuated that most folks who carefully build a nice nest egg and stay out of debt do so because they’ve been able to avoid setbacks in life. If I had to throw in my two-cents, I’ll say it’s 90 percent effort and determination, and 10 percent good/bad luck. In other words, well over 90 percent of us have no one to blame but ourselves with respect to our current financial situations.

Investor Junkie - Are Your Collectibles Really an Investment? If it is something truly rare and in-demand, like a vintage automobile, sure. Then again, if it’s something marketed as a collectible at the point of sale, but mass produced and purchased by millions — like 99.999999 percent of all baseball cards manufactured from the late 1980s onward — then no.

And Here’s Some Other Posts You Might Enjoy…

Barbara Friedberg Personal Finance – The 9 Best Stocks to Own Now

Darwin’s Money – Would You Ever Pay for an MBA with Your Own Money?

Frugal Zeitgeist - Luxury Perks of the Rich

Money Reasons – Home Security: Deciding to Spend or Not to Spend

Everyday Tips and Thoughts – What I Learned from a Long Break

Couple Money - Is Bankruptcy Sinful and Bad or Right and Moral?

Canadian Finance Blog - Is Gold in a Bubble?

Not Made of Money – 6 Things You Should Reduce This Year

Budgets Are Sexy - A Perk of the Crap Economy?

Sustainable Personal Finance - Sustainable Living with a Growing Family

Square Pennies – Top 10 Free Workout Videos on YouTube

The Way-Back Machine: Past Posts Of Mine You May Have Missed

From February 2009:

My Kids’ Loan Interview with the Bank of Dad – It’s hard to believe this post is almost three-years old. As an experiment to find out how much my kids (who were 11 and 9 at the time) really knew about money, I promised to give Matthew and Nina a little interest-free cash if they only agreed to a brief interview. They didn’t disappoint me.

Credits and Debits

Debit: The US Treasury recently reported that the deficit for the 2011 fiscal year was an eye-popping $1.313 trillion. On the bright side, that’s almost a trillion dollars less than the year before.

Debit: Meanwhile, the United States officially closed out the 2011 calendar year with the National Debt at $15,222,940,045,451.09. That represents a troubling debt-to-GDP ratio of 100.3 percent.

Debit: Throw in another $61 trillion in unfunded liabilities for Medicare and Social Security, and you can see the deep financial doo doo we’re all in; it’s currently well over $500,000 per household.

Credit: With all that debt on the books, you’d expect the Washington pols to cut back just a tiny portion of our leviathan government bureaucracy.

Debit: Instead, they’re increasing their credit limit by another $1.2 trillion. I know.

Credit: Yes, they could impose additional taxes on millionaires like the 1.9 percent surcharge proposed by Senate Majority Leader Harry Reid (D-Nevada), but that would raise only $11 billion annually.

Debit: Putting that in perspective, if that surcharge were in force during the 2011 fiscal year, the US deficit would have been $1.302 trillion instead of $1.313 trillion. Why bother, other than to pander to the class-warfare crowd?

Credit: The truth is, our nation doesn’t have a revenue problem — it has a spending problem. So more taxes are clearly not the answer, folks. The only effective solution is to cut spending.

Debit: Speaking of Big Government, Department of Energy regulations that effectively killed the popular 100-Watt incandescent light bulb went into effect on January 1st.

Debit: Did you see this? CNN is reporting that more delinquent borrowers facing foreclosure are using tactics that delay the eviction process, allowing them to live in the house scot-free for up to three years, depending on the state they live in. Unbelievable, isn’t it?

Debit: On a related note, new home sales in 2011 were on track to make last year the worst year in almost half a century. I guess it’s kind of hard to sell new homes when people can live rent free for years on end.

Credit: Get this: A Swedish woman who lost her wedding ring 16 years earlier was ecstatic after finding it attached to a carrot she pulled from her garden — which only goes to show that you really can please a woman with a, ahem, one-carrot ring.

Credit: Finally, a North Carolina man was arrested last week after he allegedly walked into a local Walmart, grabbed $476 worth of stuff, including a microwave oven and a vacuum cleaner — and then tried to pay for it with a $1 million bill. He probably would have got away with it too if the cashier wouldn’t have called the manager due to a lack of change.

Other Useless News: Frampton Comes Alive!

The very first record I ever bought was Frampton Comes Alive! by the great Peter Frampton. The double album’s closing number, which I am listening to now on my iPod, “Do You Feel Like We Do?” still gets me goin’ every time. And, no, I don’t care that Guitar World, incredulously, ranked the lengthy talk-box-infused sonic showcase from Frampton’s epic 14 minute 15 second magnum opus as the 14th worst guitar solo of all time. Go figure.

If you happen to enjoy what you’re reading — or not — please don’t forget to:

1. Click on that “Like” button in the sidebar to your right and become a fan of Len Penzo dot Com on Facebook!

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And last, but not least…

3. Don’t forget to subscribe to my RSS feed too! Thank you.

By the Numbers

A miniscule sample of new state laws that took effect on January 1, 2012:

$150 First-offense fine for failing to comply with a new Illinois law requiring consumers to show an ID when buying drain cleaner. Yes, really.

0 The number of “happy hours” you’ll find in Utah now thanks to a new state law banning drink specials. Yes, really.

18 Minimum age you must be to legally use a tanning bed in California. Yes, really.

0 Amount of fertilizer you can now legally put on your yard in New York state between December and April. Yes, really.

Fed up, yet?

Top 25 Referrers for December

It’s the first weekend of the month, which means it’s time once again to thank the top 25 referring websites to Len Penzo dot Com.

1. MSN: Smart Spending
2. Lifehacker
3. Money Talks News
4. The Simple Dollar
5. Kiplinger
6. Budgets Are Sexy
7. Wisebread
8. Canadian Finance Blog
9. Monevator
10. The Globe and Mail
11. Time Magazine: Moneyland
12. Oblivious Investor
13. Newmark’s Door
14. Green Panda Tree House
15. Frugal Under 40
16. Lazy Man and Money
17. Money Help for Christians
18. Money Beagle
19. Cash Money Life
20. Control Your Cash
21. Afford Anything
22. The Quest for $85,000
23. (tie) Credit Karma
23. (tie) Darwin’s Money
23. (tie) Don’t Quit Your Day Job
23. (tie) JoeTaxpayer
23. (tie) Stop Sweating the Big Stuff
23. (tie) Yes, I Am Cheap

Thank you to everyone who refers their readers to this little ol’ blog! It’s much appreciated.

The Question of the Week

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Letters, I Get Letters

Every week I feature the most interesting question or comment – assuming I get one, that is. And folks who are lucky enough to have the only question in the mailbag get their letter highlighted here whether it’s interesting or not!

From Sharon:

I saw your 2012 prediction post and I really enjoyed it. Are you sure the Mayans were wrong about the world ending in 2012?

Relax, Sharon. The Mayans couldn’t even correctly predict their own demise.

I’m Len Penzo and I approved this message.