Programs and Financial Counselors

Wow…  I guess I am getting back into programming.  I added a folder for my custom programs in the Start menu.  

Anyways, moving on…

I spent some time over my break skimming through various things by other financial authors my parents had picked up.

I’ll start with Suzy Orman.  I don’t remember the specific book title, but I’ll cut through and say her general policy is the shotgun approach and shows no focus or intent.  Several of her ideas were strange and I wouldn’t recommend reading anything else by her.  Her rather “strange” suggestion was to borrow money from your 401k to pay off credit cards.   That doesn’t make much sense, because it doesn’t deal with the underlying problems that caused you to get in debt in the first place.  I think she fits in the category of “debt is a tool” people.  Her lack of focus is evidenced by her attempts at debt reduction.  Her idea is to line debts up by interest rate, and add $10 to every debt you have.  So the high interest thing get paid off first.  The wiser idea is to line everything up by payoff balance.  Then, pay minimums on everything except the smallest debt.  On the smallest debt, pay everything you can and get rid of it as fast as possible.  The goal is to see improvement so you don't fall off the horse and quit because you started with $15,000 is high interest payments when you could have wiped out $200 in months as opposed to years.

I don’t recommend that, but then I don’t have a talk show and a million dollars.  Still doesn’t make her right.  I much prefer the intent focus presented by Dave Ramsey and his idea that you should deal with one problem at a time with full force, and you should only mess with the enxt problem when the first problem is complete.  It makes no sense to invest money if you have no emergency fund and you have to cash out your investments to handle emergencies.  The goal with investments is to get them going and build compound interest by adding and not subtracting from them. 

This post has been brought to you by my three year old.  So if you see any random letters here or there, it was probably him.