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Sometimes, I change my mind

May 10, 2012

ImageI thank you, my readers, for giving me feedback on my columns. Some have said they enjoy them, some have said they agree with what I have written, and others have challenged something I have written.

To tell the truth, I don’t always agree with myself, either — I sometimes change my mind about my viewpoint after I write a column. While thinking about what to write this week, I thought about some of my past columns, notably topics about which I have changed my mind.

For the longest time, I believed we needed to switch from paper dollar bills to dollar coins. It is very clear that coins last longer than bills, and even when figuring the cost of production to the average length of use, dollar coins still are cheaper than our current bill system.

Unfortunately, when the Government Accounting Office (GAO) did a report on this, it found that the government would have to mint 50 percent more coins, as many dollar coins would end up in people’s change jars.

In the end, this would make dollar coins more expensive than dollar bills. Also, most Americans prefer the dollar bill to a dollar coin. The GAO did say the government would save more money by switching to coins, as people would store them as opposed to spending them. To learn more about this, do a web search for “Seigniorage.”

I also regret the column I wrote about Meredith Whitney, who incorrectly predicted hundreds of municipal bond defaults that did not occur this past year. Looking into this a little more, it appears her analysis was spot on. 

There are numerous towns, cities, and counties across the country that are in dire financial shape. Whitney may have been off on her timing, but it would be pretty reasonable to expect more municipal defaults in the next couple of years. 

The lesson to learn from this is that even when the expert analyses have the right information and a strong analysis, they are sometimes wrong. This is why you can’t predict how individual stocks will do. There are times when the experts get it wrong, so it is foolish to think you can hop on the internet a couple of hours a week and time the market or an individual stock.

After not having a credit card for a couple of years, Kerri and I signed up for a rewards credit card this past year. Our logic was that we might as well get a little back for the money we spend.

So far, this appears to be a winner. We pay off the credit card on a weekly basis and enjoyed four free hotel nights at a beautiful resort in Phoenix about a month ago. There is no way we could have stayed there if we had to pay the daily rate, which was close to our monthly mortgage payment. 

This being said, I do think we spend a little more than we used to when we used cash and debit cards. We will give this system a little more time and will report what we decide in the end.

Getting rid of cable television is a definite slam-dunk winner. At the time, I wondered if I would miss watching TV. I had a few favorite shows I watched regularly such as “The Office.” Now, a year later, I can honestly say I haven’t missed it at all, except occasionally during football season when I have to check out scores on the internet or watch on the one network channel I can catch on my bedroom television with rabbit ears.

Even though we have Netflix, I’ve probably only watched about 30 minutes of TV at home in the past month. Also, the shows that I used to have to watch on a weekly basis aren’t that important any more. We have saved about $50 a month and I’ve spent my time doing things that are a little more constructive. 

As I wrote in my initial column, this may not be a good option for everyone, but if you are considering it, give it a try. After we switched, our cable company has called and sent a plethora of letters trying to get us back. The company has offered us a rate I asked for while we still were customers, but we definitely are not going back to cable. You can buy quite a few groceries for $50. 

While I’ve changed my mind some, I’m even more convinced on a few principles. So, what changes my mind or solidifies my convictions?

Even though I have my ideas on personal finance, I continue to learn by reading a lot about this topic and analyze the information. I try to not let my feelings get the best of me, but base my opinion on logic and what previous solid research tells us.

These practices don’t only work in personal finance, but in a wide range of areas from education to government to workplace success. Be willing to look at both sides of an issue critically, and then make the decision that is right for you. 

Don’t believe something just because someone on TV or the radio or this newspaper says it is so. Take the time to research, analyze, and decide for yourself.

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