The Sunday Review #16: Cartoon Contemplation Edition

It would probably take a whole post…may be more to convey the message in the cartoon…so I will just leave you guys to savor it in your own way. If you know of any good source of money related cartoons, please feel free to share.

Moving on to some interesting articles of the week.

• The Dangers of Financial Paralysis - And How To Get Out Of The Rut by Trent @ The Simple Dollar. Learning from his experience, Trent proposes a 6-step plan to get into action to improves your finances. Sometimes I wonder if it is more of a financial “inertia” than a “paralysis”. It’s not like people don’t do stuff….they do it, but they just want to keep doing what they have been doing all along….even if that’s what got them in the rut in the first place.

• Dividend by Blain @ Stock Trading 101. The post answers basic questions like “what is a dividend?” and “why companies pay it?”. Short and simple with no investing jargon.

• Get A Pre-Approval Letter Before Shopping For A Home by Henry @ Binary Dollar. Henry advises on looking for a home only after have a mortgage pre-approval letter in your hand. If I understand it correctly, he implies that the letter might be useful in negotiating home purchase prices. If you want to pursue it further, click here for more details.

• The Stock Market is the Engine of America’s Prosperity by Jeremy @ Generation X Finance. The post carries an interesting 50 year old video which explains the fundamentals behind the concept of stock market.

• Key Differences Between Traditional and Roth IRA by Sun @ The Sun’s Financial Diary. Must read for people who are just starting to think about retirement. With the help of some key points, Sun nicely explains how Traditional IRA differs from Roth IRA.

• 5 Ways To Survive A Volatile Stock Market by SVB @ The Digerati Life. SVB discusses how she copes with market fluctuations and analyzes a few possible responses to the rapidly changing stock market scenario.

• Your Home: Asset or Liability by Lazy @ Lazy Man and Money. This gathered interesting comments. Here is a taste:

An asset is anything that has value. The benefits he spouts about relate to income producing assets (ie rental property). Generating cash flow with an asset is great, but it is not the defining characteristic. His point is that your primary residence generates negative cash flow, which is true, but certainly does not mean that it is without value. I’m sure we could all rent out rooms in our homes to make it what he calls an asset, but who wants to do that? Kiyosaki is little more than a used car salesman who targets the poor and uneducated to sell his books to.

Here is an excerpt from another comment:

Those who treat their homes as investments are going to end up shorting themselves either by disappointing returns on the sale, or the perception that your house is something that you own to provide you with money instead of a comfortable life for you and your family.

Any thoughts on this?

• The Difference Between Risk and Fear by Super Saver @ My Wealth Builder. What’s the relation between fear and risk? Can one be measured in terms of the other? In my opinion, fear is a response to some kind of a “perceived risk”, and the perception of risk varies from person to person. Here is a related thought - when faced with a risky (dangerous) situation, two types of people will be *fearless*: 1. people who are prepared to tackle the risk, and 2. people who are totally ignorant of the risk. Fear resides with people who are able to perceive the risk, but are not prepared handle it.

• How to Use Leverage to Make Money on eBay by Ben @ Money Smart Life. Ben shares some of his eBay secrets in this one.

I buy heavily discounted items at wholesale, outlet, or unclaimed goods stores then sell them on eBay. I borrow money for everything I purchase by charging it on my credit card. I take possession of the merchandise, list it for sale the same day, and haven’t yet paid a cent.

• 5 Questions You Should Ask Yourself before Loaning Money to Friends or Relatives by ISPF @ Grad Money Matters. Some quick tips from ISPF on lending money to near and dear ones. I have lent some money in the past to friends…but each time I was hoping for the best (that I will get repaid) and preparing for the worst (”what money? you didn’t give me any money”).