The Bernard Madoff scandal is making the news again today. I haven't written much about financial scandals, rip-offs, and white collar crime, so now's as good a time as any, I suppose, to fill you in on a few things.

First off, let's just say that Bernie Madoff is a jerk. He took people's money in an elaborate Ponzi scheme and made off with BILLIONS. Gone are the days when MILLIONS of dollars ripped off will make the news circuit!

Madoff simply needs to be tried, sentenced, and forgetten about. "Investors" - you will NEVER get your money back.

IT'S GONE.

I put "investors" in quotes because a lot of those folks weren't investors. They were rich dreamers who wanted even more money than they already had.

They had an "In" to a supposedly too-good-to-be-true financial "system."

NEWSFLASH

If it's "too good to be true," it's too good to be true! Run - don't walk - away from stuff like this.

For as long as man has lived, there have been schemes concocted by shrewd, yet immoral and dispicable, people that seek to separate YOU from your MONEY.

The most famous, of course, was made famous by Italian immigrant, Charles Ponzi. He promised "investors" a 50 percent return on their money in a matter of days and he made good on his promise.

For a while.

He took new investor money and returned it, plus the 50 percent, to the gullible folks who gave Ponzi their money first. The last suckers got the shaft.

Of course, Ponzi went to jail and died poor. Just like Madoff ought to.

There are some lessons to be learned here.

1. The aforementioned, "If it's too good to be true" lesson. 
2. Invest like Warren Buffett - if you don't understand a "business," don't invest in it. Ponzi had no business other than taking people's money for himself.
3. If you hear about a scheme on a golf course, get in your golf cart and go home. Secure your money. Make sure your pockets weren't picked.
4. If it sounds like an "insider's secret," treat it as such. Insider trading is illegal for many reasons.
5. Invest in YOUR own business. Nobody else gives a damn about you or your financial plight. 

One last thing: There are legal Ponzi schemes, the most notable of which is Social Security. Yes, you read that right. It's a government-enacted program that is exactly a Ponzi scheme.

The reason that Social Security will go broke is that there are fewer and fewer "new investors" and the old investors want their guaranteed returns.

I'm not making any moral judgements here. In fact, I support Social Security. In its original fomulation, it was to be used as a social safety net that had more new investors than old. As long as that was the case, the system was sound and good.

But now that the demographics have turned upside down (many more collecting nowadays, not as many contributing, relatively speaking), the system is in peril.

Stay tuned for my solution to the Social Securty nightmare in a coming post. And don't get me started on Medicare! It's in a much more precarious state than Social Security ever will be, but you don't hear much about it.

Money isn't everything. It's the only thing. Wait. That's only for football.
Enjoy life. Spend time with your family.

Welcome to the March 2, 2009 edition of Kids and Money. It's been a while since our last carnival, so this is a BIG ONE. I've tried to put the submissions into logical blocks for easier reading.

Earning

Tisha Tolar presents Work at Home Discipline: Find Some posted at Empowering Mom.

jim presents Ten Recession-Busting Money Tips for Young Professionals posted at Blueprint for Financial Prosperity.

Pinyo presents Where To Sell Used Books And Textbooks posted at Moolanomy.


Spending

Matthew Paulson presents 8 Money Saving Ideas for Family Fun Night posted at American Consumer News.

Gary R. presents Traditional vs. Rustic Camp Sites posted at Camping Tips, saying, "An increasing number of campgrounds are offering visitors the choice of both traditional and rustic campsites."

Madison presents Money Saving Tips for Kids on Valentine’s Day posted at Kids and Money.

Silicon Valley Blogger presents Lower Your Car Insurance Rates! How To Cut Insurance Premiums In Half posted at The Digerati Life, saying, "If you've got kids, driving safely and carefully is a must. And doing so will most likely lower your car insurance rates as well." 

Barry presents Tug Of War Between Retailers And Frugal Consumers posted at Associate Money. 

Annette Berlin presents Printable Toys For Pre-Teens posted at Craft Stew, saying, "Older children get tired of toys fast. Rather than spending a small fortune to keep them constantly satisfied, let them create their own playthings from cardstock and a printer." 

jim presents How to Strong Arm Your Way to a Better Deal posted at Blueprint for Financial Prosperity. 

Savings Toolbox presents Tips to Save On your Summer Getaway posted at Savings Toolbox.


Saving

Deposit Accounts presents Savings Accounts for Children posted at Deposit Accounts. 

Mr. Banker presents High Interest Money Market Accounts (MMA) posted at Best Interest Rate Banks. 

Brian McKay presents CD Rates posted at MonitorBankRates.com, saying, "Finding a decent rate on a certificate of deposit account these days isn’t an easy thing to do. CD rates have been coming down so fast recently the average 12 month CD rate is nearing just 2.00%." 


Investing 

retirehappy presents Warren Buffett’s Metric Says BUY! posted at My Retirement Blog. 

The Shark Investor presents Strategies For Raising Funds: Borrow Your Way To Wealth posted at The Shark Investor, saying, "How and when to use loans for investing" 

Carrie presents Learning About Investing as a Child posted at Less is More. 

RJ presents The Case for Investing in Index Funds posted at Our Financial Planner, saying, "No matter the age and experience, index funds can be your greatest friend. Thank you for hosting." 

Kelly Sonora presents 25 Forex-Related Twitter Accounts Worth Following posted at Best Forex Brokers. 

PicktheBrain presents The First Investment a Beginner Should Make posted at Beginner Investing. 


Money Management 

Len Penzo presents Using a Ledger to Teach Kids Money Management posted at Len Penzo . Com, saying, "Even kids as young as 6-years old can learn personal finance management skills via this simple bookkeeping plan." 

Lisa Mitchell presents Teaching Your Children About Money posted at Let's Talk Babies. 

Jacquelyn presents The Wise Parent & Child Money Guide posted at WParent.com - Wise Parenting Guide, saying, "Give your child an introduction to the subject of money by reading this article together. This will give your child a general idea about money." 


Credit

Silicon Valley Blogger presents Best Cash Back Credit Cards: Your Rewards For Spending posted at The Digerati Life, saying, "Thank you!" 

jim presents Best Student Credit Cards posted at Blueprint for Financial Prosperity. 

Finance Tips 101 presents Drowning In Debt? Bad Credit Loans May Need To Be Considered! posted at Finance Tips 101. 

Finance Tips 101 presents The Pros And Cons Of Personal Loans posted at Finance Tips 101. 

Finance Tips 101 presents Answers About Home Equity Loans posted at Finance Tips 101.

DebtLite presents What Are the Root Causes of Debt? posted at Debt Advice. 

Astrid Lee presents Suze Orman posted at World Healing, saying, "Article on advice by Suze Orman, the popular TV adviser on personal finance and about how get out of debt. Article also contains video show where she talks about how to determine how much to give to charities..." 

Finance Tips 101 presents Cash Back, Award Points, and Gas Cards posted at Finance Tips 101. 


College

Madison presents Midwestern Disaster Area Tax Impacts posted at Tax Gab, saying, "Expanded college tax credits for those affected by the storms last year." 

Finance Tips 101 presents Scholarship And Grant Information For Interested High School Graduates posted at Finance Tips 101. 

The Smarter Wallet presents Student Loan Programs To Pay For My College Tuition Costs posted at The Smarter Wallet, saying, "Thanks!" 

Madison presents Ohio 529 College Advantage $25 Sign Up Bonus posted at My Dollar Plan. 

OnlineCollege presents Choosing a College: A Simple Guide for Undergraduates posted at Universities and Colleges. 


Preparing for Baby

jim presents Preparing Financially for a Baby posted at Blueprint for Financial Prosperity. 

Concerning Kids presents Choosing The Right Pediatrician For Your Baby posted at Concerning Kids. 

Madison presents Our Family is Expanding… Financial Resources for Babies posted at My Dollar Plan. 

Pregnant Woman presents Identical Triplets - Three Bundles Of Joy posted at Pregnancy, saying, "Triplets occur in one of every eight thousand live births" 


The Stimulus 

The Smarter Wallet presents Will The Obama Economic Stimulus Check and 2009 Stimulus Plan Save The Economy? posted at The Smarter Wallet, saying, "How will your family be affected by the stimulus bill?" 

Brian McKay presents What's in the Stimulus Bill for You? posted at MonitorBankRates.com, saying, "We have listed all the benefits for individuals in President Obama's stimulus bill that was just passed." 

Ella Moss presents New Economy, or Buy American, Stupid! « Zodiac Times posted at Zodiac Times, saying, "So, the new stimulus package is passed, hopes are up, markets are down, and recession deepens. Everyone is blaming the housing market, unscrupulous bankers and inept previous administration. But very few seem to understand the true roots of our woes, and how deep our economic problems go." 


Miscellaneous 

KCLau presents Money Tips Group Writing Project posted at KCLau's Money Tips, saying, "Calling out for contributors to an e-book about personal finance." 

nickel presents Should You Pay Your Kids for Good Grades? posted at fivecentnickel.com. 

Money Tipper presents Bring Proof of Age When Flying With Young Children posted at Money Tipper. 

Concerning Kids presents Tips And Idea To Help Child Proof Your Home posted at Concerning Kids. 

Finance Tips 101 presents Alarming Identity Theft Statistics Are Cause For Concern posted at Finance Tips 101. 

Relax presents The happy way to spend money posted at The Wise Curve, saying, "we are happier when we spend money to gain experience than buying material goods" 

jim presents Total Cost of Owning A Dog posted at Blueprint for Financial Prosperity. 

Concerning Kids presents Helping Your Healthy Child Stay Fit For Life posted at Concerning Kids.

That concludes this edition. Submit your blog article to the next edition of Kids and Money using our carnival submission form.

Past posts and future hosts can be found on our blog carnival index page.

Technorati tags: kids and money, blog carnival.

I just bought an Epson Artisan 800 All-In-One printer. This thing is totally cool. Wireless. Networked Ethernet. OR USB. High quality photo-realistic printing as well as an ADF tray. Scans, faxes, copies, prints. Brushes your teeth. If you're really nice.

Now, I see that the Silicon Valley Blogger, over at The Digerati Life, is giving away an Epson Workforce 600!

Sheesh. Guess if I win I can auction one off on eBay...

Anyhow, go check out how you can enter the contest.

Money isn't everything. It's the only thing. Wait. That's only for football.
Enjoy life. Spend time with your family.

It's been over 100 degrees here for the past week or so; it's supposed to be in the 80s this week (whew!). We've had quite the time trying to beat the heat. A couple of years ago, we put in a central A/C system. This past year we put in an attic fan. While the attic insulation looks sufficient, it might be a good idea to replace it with some higher R-value material. I've even put a film on the west-facing windows.

It's all helped. A little.

Short of getting the whole house insulated (an expensive proposition for us as our house is very old and needs holes drilled from the outside in to inject the insulation, and then new paint to cover the patched holes) and installing a patio/awning on our west side, we've run out of ideas. Save for one (though I don't think it will help us here since the air outside at night never cools much during a heat wave -- a whole-house fan. The idea here is that you have an enormous fan installed in your ceiling, open all your windows in the evening, and have the fan suck in the cold air from outside and exhaust into your attic all the hot air from the house. Many people swear by them.

Summer Hacks: Save Money And Stay Cooler with a Whole-House Fan

Depending upon its size, a whole-house fan uses only 10% to 20% as much electricity as a central air conditioner. Also, it uses significantly less electricity than a window air conditioner, yet it keeps the entire house more comfortable, not just one room. Installing one generally provides a good payback on the investment.

So, if you're inclined to install one, read the above article. On paper, it sounds like a great idea.

Often, we place money at the forefront of our lives. In fact, it seems as though money makes the world go 'round. I have a companion site to this one that's entitled, Your Money Is Your Life.

Having money, and, more importantly, knowing what to do with it, makes life easier. You can afford to go on vacations or to buy safe organic food for your babies. You can buy your wife a ring to commemorate your tenth anniversary, to show her you care.

You can afford private schools. Or tutors. Or a fuel efficient, safer car than your 1986 Camry beater.

But money is not the "Be all, end all." There are many families who make less than you who are happier and can save more. They have a retirement fund. Their children will be able to attend a good college. They plan. They have different priorities.

Life sometimes hits you right between the eyes. Your mother could be stricken with cancer. Your child may get involved with drugs. Your wife could leave you. Remember this:

"No matter what horrible thing you're going through, when it's all over it only takes three seconds to sum it up. Remember that."

This comes from one of my favorite non- personal finance blogs, dooce. There is light at the end of a tunnel. And it's not a locomotive coming your way. Think about your issue. Make a plan. Execute the plan. Reflect on it. Refine it as you learn more and make progress.

Department of Homeland Security Michael Chertoff announced the biggest ID-theft bust in history last Tuesday.

Federal indictments unsealed Tuesday in Boston and San Diego against 11 individuals outlined an extraordinary global scheme that siphoned 40 million customer credit and debit card numbers out of the networks of nine major U.S. retailers and placed them - for a price - in the hands of individuals around the world, who in turn used them to make purchases or withdraw cash from ATMs.

Sounds pretty serious.

Chertoff called the indictment a "milestone" in the evolving history of cybersecurity.

"It's an opportunity, in fact an obligation at this point, for everybody involved in this scenario to take a careful look at the security systems in place," Chertoff said in the San Jose offices of the U.S. Secret Service, which investigated the case.

 I'd have to agree with this. The crime ring incorporated "wardriving" (finding open networks to exploit) and then created an online database to buy and sell credit card numbers, among other things. This cooperative effort was lucrative, too:

At least one of Gonzalez's co-conspirators enriched himself to the tune of $11 million, according to the indictment. Gonzalez himself allegedly profited by at least $1.7 million and purchased a 2006 BMW, computers, a Glock handgun and a condominium in Florida where he let a co-conspirator stay for free in exchange for help in the scheme, the indictment alleges.

 It's the same old story: Find the weakest link and break it:

The fact that the alleged hacking took place at retail outlets - and not banks, for example - suggested that the suspects were targeting weaker links in the network, Dunkelberger said. In some cases, the indictment said, the network and credit card data were unsecured; in others the suspects were able to crack the encryption. 

 I'm truly glad that DHS caught the thieves. But here's the punchline: The ring, and its concomittant crimes, occurred beginning in 2004! Four year later, we find this out?

One thing I'm sure to do is forget to take something when I run errands. You know, a return at Target (or the receipt), the key you need to get a copy of at Orchard Supply, the grocery list, etc.



My wife and I have established a system that consists of the following complex set of components:

• A box


• Dining room table (optional)
  
  

The box is on the dining room table near our front door. We place our car/house keys there and anything else we want to take with us. It's impossible for us to go very far without our car keys, since we run almost all our errands with the car. So placing the keys in the same box as where we put all of the stuff we want to take with us helps us "remember" those things.



It's not full-proof, of course. We could forget to put something in the box. However, we don't run many errands and putting things in the box over the course of the week gives us time to remember those things that we really need to deal with.



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Prime Time Money tagged me with the challenge to "Find one step you can take to make your financial system better or more organized."



Being the philosopher I am, I turn to Confucius,  who is rumored to have said (did I tell you I'm a skeptic, a cynic, and sarcastic?)

A journey of a thousand miles begins with a single step

My single step was buying a little software program in the late 80s (I was still a kid! Really, I was) called Managing Your Money which led me to the inspiration and contributor to the software, Andrew Tobias. I found out that Tobias was a personal finance author (what are those? You mean there were experts before blogging?); one of his books was humorously called "The Only Investment Guide You'll Ever Need."



In this book, I can truly say that I learned at least 95 percent of what I know today about personal finance, investing, banking, and saving money. I also learned 100 percent of what I know about wine (which is still very little, by the way).



Tobias is an advocate of index fund investing, buying in bulk (he provides the ROI calculations, too), yet only investing money that you can truly afford to lose.



And he's lost a lot! He's lost his shirt in Broadway and off-Broadway plays, futures and options, commodities of all sorts, real estate, collectibles, and limited partnerships in oil and gas. You name it, he's invested in it, and he's lost money in it.



He goes through the various ways he's lost money to illustrate the idea that you just cannot win in the investing game by going for broke and paying tons of fees. The experts in commodities, for example, will always clean your clock. These speculative "investments" are zero sum games: One guy wins, you lose.



Contrast this with the stock market, where one man's gain isn't necessarily another man's loss. We can all win; or, in other words, a rising sea lifts all boats. The stock market, even though it's sucky now (financial term for "underperforming"), is your best bet for long-term growth of your money.



I still follow Andrew Tobias. Though he talks a lot of politics on his site, the focus still is on financial planning, frugality, and investing. He's funny, witty, and smart.



So that was my first step:



Finding somebody to follow.



Many choose "gurus" like Dave Ramsey, Jim Cramer, or Ric Edelman. I found Andrew Tobias. It's been a great find!



Now, whom shall I tag?



brip blap

Frugal Dad

How to Make 7 Million in 7 Years™

Quest For Four Pillars

Generation X Finance



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There are a ton of things that we know about the credit card industry because we're smart Money Hackers. But there are some things we don't know, or that we knew but then forgot because they're so...well, obvious. It's ALWAYS a good idea to read each of your credit card's Terms and Conditions (T&Cs) to find out the specifics, but these 10 items are industry-wide, governed by VISA and Mastercard (and American Express and Discover, to lesser degrees).

Here are some of my favorites:

1. Merchants do not have to accept your card if it is unsigned.


2. Merchants cannot establish minimum purchases. Often, you'll find that the small "mom and pop" type stores place "$10 minimums" on credit purchases. They cannot do this. But we all go along with it. They also cannot charge you a fee for making a purchase below their self-imposed "minimum." However, you'll find that neither issuing banks (like Bank of America) nor VISA/Mastercard will actively enforce this rule.
   
   In short, you'll have to walk away. The merchant can refuse service to anyone for any reason (as long as it's not discrimination as defined by a federal or state statute or law.

I see #2 all too often. I've called issuing banks and VISA and Mastercard and none of them seem to care about their own rules. Make it a point, though, that you will not shop at places that break these rules. They're there, after all, to protect you. Plus, if you pay more just to make a purchase a credit card purchase, being money-wise kind of goes out the door, doesn't it?



10 Things You Might Not Know About Your Credit Card



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Hi all, I'm getting my knee scoped on Wednesday and expect to be out most of the day (I mean OUT); blogging may be a little haphazard the first few days after surgery.



Of course, I have some posts set to run while I'm out, but there won't be any spontaneous newsworthy posts.



Until then, wish me luck!



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