Whenever I see an article titled like the The Wall Street Journal’s, Ten Money Moves that Will Always Pay Off, I always read it. Always. I have no idea why I am attracted to lists like this. It may have to do with the search for that elusive financial unicorn? or the quest for knowledge?
These list type articles rarely provide any new wisdom, but either provide me with a refresher of what I could be doing better or annoy me because I don’t agree with everything or think it is way too simplistic.
This recent list of ‘guaranteed’ investments provide a perfect example of what I am talking about:
- Max out the 401(k)
- Give up the Vacation Home
- Max out IRA or Roth IRA
- Pay off Credit Card Debt
- Fire your Banker
- Get your Tax Refund Early
- Buy Inflation Protected Bonds
- Buy A Bread Machine
- Play Hardball with your Insurance Company
- Get a Freebie from a Bank
None are financial unicorns, and some don’t even make sense in terms of guaranteed investments to pay off.
Those Guaranteed Safe Investments that Make Sense
Paying off debt and getting your tax refund early seem to be the only ones on here that will work for everyone. As the article succinctly points out,
You’re probably paying at least 15% interest. You may be paying a lot more. You’d have to earn maybe 17% before tax on an investment just to keep pace. Boring? Nobody’s making 17% these days. So pay off your credit-card debt and brag to all your friends that you just beat Wall Street.
While I generally believe receiving a large tax return isn’t the worst thing in the world, I agree that regardless of the size the government shouldn’t hold on to it longer than necessary.
The inflation protected bonds, also probably belongs in this category, at least for now.
Those Safe Investments that are Questionable
While maxing out retirement accounts would be good for me, is it a sure investment? I would venture to say anytime you are talking about the market there are no sure things in the short run. Similarly, fighting/switching insurance companies and banking institutions, could make sense, but much more information would be necessary.
I haven’t been able to optimize the credit card rewards system just yet, but that is what the WSJ meant when it said get a freebie from a bank.
Weird Choices to Fill In
Then there are just filler ones – Give up the vacation home? Really?! How could that possibly be in the same list as the other sure investments? Buying a bread machine? Fire your bank?
Since the basics of personal of finance are easy main stream media sites need to fill up content.
What do you think about the list? Do you usually read lists like these?