The Low-Interest Debt Debate

A few days ago, I posted an article about our purchase of a 2009 Toyota Prius. One of the elements of the article that got quite a few readers angry was our decision to take out a 4% loan to cover much of the cost of the car, even though we had enough in our car savings to pay for the entire vehicle.

The argument against the loan is pretty simple: debt is bad. By having it, you’re indebted to someone else, condemned to make payments for quite a while or else risk wrecking your credit. Instead, pay cash for everything – no debts, no worries.

I agree with that philosophy to a large extent. Using credit to buy something you couldn’t otherwise afford is an extremely dangerous game. It can bite you hard if life doesn’t go as planned. I know this from experience – in April 2006, I let easy credit almost bankrupt my family due to overspending.

But what if you’ve done things the right way and saved up for a major expense before buying? Is it always the correct choice to make a major purchase simply by writing a check? When you write a check for a major purchase, you’re taking a large amount of liquid cash and investing it in a material item. The ability to use that cash for anything else is now gone (excepting, of course, equity loans, which usually don’t have great interest rates).

Now, at first glance, you seem to gain quite a bit from that exchange. After all, you’re not paying interest on the loan and you’re not required to make a payment every month.

But compare that to the situation where you have all of the money to pay off the debt sitting in a savings account. You can easily earn 2-3% interest on that money just by allowing it to sit there, doing nothing. Thus, the advantage of simply writing a check for your purchase isn’t quite as strong as simply not having to pay the interest on the debt. If you can write a check, for example, to cover a 5% debt, but you can earn 3% by holding onto the money in cash, your dollars and cents benefit is only approximately 2%.

Another factor worth considering is that having extra cash on hand always serves as a supplemental emergency fund. While savings intended for a major purchase should never be juxtaposed with a true emergency fund. having more cash on hand in the event of a major crisis does have value.

There’s also the opportunities that cash provides. If you put all of that money into your purchase and deplete your savings, you no longer have cash available to take advantage of exceptional opportunities.

Here are two examples of what I’m talking about. In late 2006, I made some extra money flipping Nintendo Wiis. I had a good run finding them in stores and I was able to buy them new for $250 and sell them in just a few days for $325. The only problem is that I didn’t have a lot of excess cash to do this – I actually had to do it on credit cards. Because of that, I didn’t want to take a big risk when doing it, so I only flipped one at a time – I’d get the $325 (or so), use it to pay off the debt in full (and use the extra $75 to pay a little more on my debts), then buy another one.

If I had a large bankroll at the time, I could have been flipping these by the armload. I knewwhere and when to go to get the systems and I also knew where to sell as many as I could get my hands on. I simply didn’t have the capital to do this. If I had, I would have been able to earn a very good return on my money.

Another example: in 2005, I had the chance to buy 72 packs of Magic: the Gathering cards for about $1,500. It was actually part of a much larger lot of trading cards from a shop going out of business. Here’s the catch – these particular packs could be flipped for $200 a pop. Those packs alone would have earned me over $10,000. Unfortunately, money was so tight at the time that I had to pass on the opportunity, even though I knew I could make very good money on the sale.

Exceptional opportunities do come along, and the rewards of those opportunities go to the people who can take advantage of them. Most of the time, that means the people who have easy access to liquid cash.

In the end, my feeling is this: having cash, even if it just sits in a savings account or a CD, is advantageous over putting that cash into a material item. Thus, if you do have the cash to buy an item in full, it’s worth considering keeping the cash and getting a low interest loan for the item.

The key here is low interest. If you cannot secure a loan that’s less than 2% or 3% higher than what you can get in a savings account, you’re better off paying for the item in cash.

That’s my stand on the subject. What do you think?

Limited-Edition Ford Racing History Artwork Unveiled at SEMA; Limited-Edition Print Sales to Benefit JDRF

• Special limited-edition Ford Racing history artwork is unveiled at the annual SEMA show as part of the Ford press conference

• Famed automotive artist Sam Bass created the artwork at the request of Edsel B. Ford II, with proceeds from sales of limited-edition autographed prints benefiting JDRF

• Drivers and Ford race vehicles featured on the special artwork include Henry Ford (Sweepstakes), Trevor Bayne (No. 21 Fusion), Dan Gurney/A.J. Foyt (Ford Mark IV), Bob Glidden (NHRA Thunderbird), Jackie Stewart (Tyrrell F1), Jim Clark (Lotus-Ford Indy car), John Force (NHRA Mustang) and Parnelli Jones (SCCA Mustang)

 

LAS VEGAS, Oct. 30, 2012 – Just as Ford Racing drivers try to lock down major 2012 championships on the track and consumer holiday shopping begins off the track, Ford Motor Company is unveiling a special limited-edition Ford Racing history print today at the SEMA show that will be sold to benefit JDRF.

 

This special Sam Bass artwork celebrates Ford’s storied 111-year racing history, with proceeds from the limited-edition prints benefiting JDRF. Commissioned for his private collection by Edsel B. Ford II, great-grandson of Henry Ford, the original artwork dramatically portrays some of the greatest moments in Ford Racing history.

 

There will be only 500 numbered prints created, all hand-signed by Edsel B. Ford II and Sam Bass, and retailing for $449 on www.fordimages.com. All proceeds from sales will benefit JDRF.

 

Print No. 1 will be on display at the Ford stand at SEMA, and will be sold as part of a special online auction on eBay. The link to bid on Print No. 1 is http://item.ebay.com/180992921115. Both eBay and Channel Advisor are waiving their fees to support this charitable effort.

 

In addition, a collectible Fathead^® peel-and-stick graphics piece featuring the artwork, Ford and JDRF logos will be available at the Ford merchandise trailer during the show.

 

The lower center of the artwork, in black-and-white, features Henry Ford himself, on top of his Sweepstakes racer, which he took to an upset win over Alexander Winton, the greatest racer in America, on Oct. 10, 1901. Ford’s victory, with mechanic Spider Huff perched on the side to assist him, helped him gain the investors to start Ford Motor Company in 1903. That race is considered the start of the Ford racing program. Below Ford is a rendering of the cut-glass punch bowl he received for winning that day, a prized racing artifact lost for more than 60 years.

 

To the left of Ford is the 1965 Indianapolis 500-winning Lotus-Ford 38/1 Indy car driven to victory by Jim Clark. The Lotus-Ford was the first rear-engine car to win Indianapolis and it changed the sport forever. Clark’s victory for team owner Colin Chapman was assisted by NASCAR’s Wood Brothers Racing team, which was brought in by Ford to pit the car that day.

 

Just above the Lotus is the famous No. 15 Boss Mustang driven by Parnelli Jones to the 1970 SCCA Trans-Am Championship. The late 1960s and early 1970s were considered the golden era of Trans-Am racing, and no car and driver better represent that era than Jones and his Bud Moore-prepared Mustang.

 

Just above Jones is the NHRA Mustang Funny Car of racing legend John Force. Force drove the Mustang to his record 15th NHRA title in November 2010, coming from behind on the final day to capture a victory for the ages. The championship – at age 61 – was even more special due to the fact Force had fully returned from serious injuries that almost ended his career just three years earlier.

 

To the right of Force and just below the Ford oval is Elf Team Tyrrell of Jackie Stewart, who took the Ford-powered car to his third and final Formula One World Championship in 1973. Stewart, certainly one of the greatest F1 drivers of all time, scored the final victory of his career with this car in Germany, ending with 27 wins in just 99 starts.

 

To the right of Stewart’s car is the Motorcraft Ford Fusion of Wood Brothers Racing, the longest-running NASCAR team in history. No. 21 is shown as a new 2013 model NASCAR Fusion at Daytona International Speedway, recalling the Woods’ most recent victory at the 2011 Daytona 500 with Trevor Bayne. That victory was the fifth Daytona 500 win for the Wood Brothers, and Ford’s 600th in NASCAR Sprint Cup.

 

Below the Fusion is the famous Motorcraft Thunderbird NHRA Pro Stock car of Bob Glidden. Glidden was the king of Pro Stock racing, ending his career with a then-record 85 victories. He also won 10 NHRA Pro Stock championships, including five in a row, with his family race team.

 

Finally, in the lower right corner is the Ford Mark IV race car that won the 1967 24 Hours of Le Mans. The No. 1 car remains the only all-American car, powered by an American engine, prepared by an American team with American drivers to win Le Mans overall. Racing legends A.J. Foyt and Dan Gurney drove the car to victory, the second of four Ford wins at Le Mans in the late 1960s.

Ford Mustang and F-Series Pickup Named ‘Hottest Car and Truck’ of 2012 SEMA Show

• SEMA Award honors the most popular vehicles chosen by specialty equipment manufacturers to be the best platforms for accessorizing and showcasing this year’s hottest products, according to SEMA

• Ford Mustang officially recognized as “Hottest Car” at the 2012 SEMA show for the first time – a testament to the strong popularity of Mustang with enthusiasts

• Ford F-Series pickups officially recognized as “Hottest Truck” at SEMA for the third year in a row

LAS VEGAS, Oct. 30, 2012 – Ford Mustang and F-Series pickups are officially the “Hottest Car and Truck” at the 2012 SEMA show in Las Vegas. The SEMA Award – presented today – recognizes the most popular vehicles the organization’s members feature in their displays during the weeklong trade show.

 

Before this year’s show opened, SEMA officials walked the floor of the giant aftermarket expo and counted the number of new 2012 and 2013 cars and trucks exhibited in booths. More Ford Mustangs and F-Series pickups are on display than any other car or truck – testament to the popularity and appeal of Ford vehicles.

 

“We’re pleased and proud SEMA members agree with what our customers have been saying – that Ford Mustang and F-Series are the industry’s hottest car and truck respectively,” said Ken Czubay, Ford vice president, U.S. Marketing, Sales and Service.

 

The launch of the new 2013 Mustang in the spring was strong, with Mustang sales this year up 18 percent over last year. Ford F-Series continues its 36-year record as the best-selling pickup in America, on pace to be the best-selling vehicle in America for 31 straight years.

 

Aftermarket exhibitors aren’t the only ones featuring Ford Mustang and F-Series in their booths. Ford is also featuring more than 10 Mustangs and F-Series trucks, showing off the extreme versatility of these iconic Ford vehicles.

 

Several examples of custom Ford Mustangs and F-Series trucks at SEMA this year include:

 

• 2013 Ford Mustang GT built by DSO Eyewear
  This 2013 Ford Mustang GT by DSO Eyewear enhances Mustang’s aggressive new look with dramatic eye appeal and even more raw power. The Mustang GT signature curves and kicked-up haunches feature a 3dCarbon body kit and brilliant BASF tri-coat white exterior finish with deep black contrast paint. The 420-horsepower 5.0-liter Ti-VCT V8, already the most powerful production V8 in Mustang history, is amped to 750 horsepower courtesy of a Ford Racing Performance Parts intercooled supercharger kit and Whipple Industries 2.9 twin-screw supercharger. Chassis enhancements to the race-inspired GT suspension include Eibach Pro-R2 coilover kit, Eibach adjustable sway bar kit and Brembo front/rear GT brake systems

• 2013 Ford Mustang by M2-Motoring
  The first Ford Mustang rolled off the assembly line in Dearborn, Mich., on March 9, 1964. Each Mustang generation that followed introduced its own unique style and excitement. This 2013 Ford Mustang concept by M2-Motoring combines the ideals of several different Mustang eras with the newest design and engineering technology available today. From custom 20-inch Savini forged wheels to lightweight carbon fiber to high-flow fuel injection, advanced design and engineering technology makes this Mustang concept an incredibly responsive and powerful modern muscle machine

• 2012 Ford F-250 XLT Crew Cab by Kelderman Air Suspension SystemsFor this 6.8-liter Power Stroke^® V8 turbo-diesel, Kelderman Air Suspension Systems teamed with Tim Nicolau Designs to provide eight to 10 more inches of lift, powder-coated, chromed and painted suspension components, an AccuAir TouchPad air suspension management system and Sway-A-Way remote reservoir shock absorbers. This Super Duty is ready to go anywhere, with looks to match

• 2013 Ford F-150 FX2 Sport Super Cab by Truckin’ MagazineA 3.5-liter EcoBoost^® V6 powers this Truckin’ Magazine creation, which features track-like handling with a lowered stance, a high-performance brake package and more luxurious interior. A unique wheel and tire combination and a custom stripe kit complete the aggressive look and feel of this dynamic build

Who are You?

Imagine you’re meeting a person for the first time – say, at a community barbecue. You have ten words with which to introduce yourself.

What do you say about yourself?

Do you mention your job? Do you mention your religion? Do you mention your family? Do you mention your social connections? Do you mention the area where you live, perhaps nodding to your nice home? Do you mention your most passionate hobby?

What is it about you that you consider so core to your identity that it’s the first thing out of your mouth when you’re talking about yourself?

(I usually lead with my family, for reference’s sake.)

Each of us has something so core to our identity that it’s the first thing we tell others about ourselves. It’s the thing that drives us to do what we do, often for a whole multitude of reasons.

Of course, we all know that life is more complicated than that one thing. Our lives are often full of conflicting needs and directions.

I will say one simple thing, though: every conflict we have in our lives that interferes with that one central thing is something that’s dragging us down.

As I said above, I lead with my family. For a long time, my personal spending was in direct conflict with that one core thing, and I could feel that conflict all the time even if I didn’t understand it. That conflict kept me up for many long nights and it finally led me to making some pretty major changes in my life as I fixed the problem.

I also found that how I spent my time was something of a problem. Evenings out with the guys might be fun in the moment. Business trips might feel like they’re advancing my career. Both of them, though, left me with an empty feeling. I was betraying that one core value.

The more I work toward making sure that all of the elements in my life are in line with – or at least not in conflict with – that one key value, the better off I am in every aspect of my life.

So, what’s your core value? What’s that one thing you would tell others about your life? What’s the one thing that makes you tick?

Are the things you do with your money really in line with that core value? Do you spend money in a way that takes away from that key thing?

If you’re in that situation, you might be surprised how much it reverberates through your life. I know this from experience: when your spending choices put the things you care most about in jeopardy, you feel it in unexpected ways all throughout your life.

Listen to that core value. Follow that core value. Work to make everything in your life line up behind it, even if that means giving up on some lesser things. An iPad might be great, but does it really compare to how it feels to cuddle with your wife or to have a newborn baby resting on your chest? Browsing the web might be a fun distraction, but does it really compare to how it feels to really succeed at work?

Sometimes, when you look at your life in a new way, the hardest choices become rather easy.

50 Best Money-Saving Blogs and Websites

Whether the recession ends up being a single, double, or even triple dip (heaven help us), one thing we've learned over the last few dollar-stretching years is that it is NEVER too late get your savvy on, get smarter about how you spend your money and live a rich, creative, abundant life with whatever you've got to work with.

On the quest for fabulous frugality, we've met a lot of like-minded savvistas and felt it was high time we formally introduced them to you.  Whether you're tightening your financial belt for the short term or the long (long! long! long!), let these whip-smart, out-of-the-box-thinking writers, bloggers, savvistas and communities inspire and be your partners in living the savvy good life for less.  Everyone grab a buddy, because remember what mom always said: “Savvy in Numbers!”

MONEY
1.    Squawkfox  is a budget drill sergeant and will whip you into savvy shape faster than fast.  Now drop and give her 10 before you read The Real Reason You’re Broke  
2.    And Then She Saved  blogger Anna Newell Jones had mega-debt until she went on a spending “fast.”  Find out how you can do it here . 
3.    The Simple Dollar  managed to get out of debt, save $600k (!) and lives his dream of making his living as an artist. Try this savvy no-brainer, Spending Less Than You Earn .  
4.    RetailMeNot . We don’t buy a thing without checking this super-useful site for coupons first. 
5.    Mint.com  lets you link up all your accounts, giving you uber-helpful at-a-glance breakdowns of where your money flows and goes each month. Sign up here  but don’t miss out on regular money-saving columns.
6.    Budgets Are Sexy  is another “got out of debt and lived to tell the tale” dream blog.  Don’t missHow I Accomplished My Goal of Full-Time Blogging .
7.    Unconsumption  helps clarify the whole consumer debt conundrum alongside fun and useful repurposing posts like “Wine O’Clock .”

HOME
8.    Thrifty Fun  is our fave mega-hub of everything related to saving money at home.  They’re a fab resource for homemade gifts, crafts and decorating, particularly around holidays, birthdays and special occasions. 
9.    Ikea Hackers  is for those times you gotta go with the cheap, Scandinavian flow, but you really want to make a piece zing! Check out “What to do with your kid’s artwork ” 
10.    Not Just a Housewife  turns clearance-rack sow’s ears into silk purses almost every day, with super ideas for savvy décor.  Check out this FAB mason jar wall planter  (swoon!).  
11.    ElegantThrifter  points us toward so many Martha-quality makeovers like this repurposed Hi-Fi-turned sideboard , you’ll be hitting your local thrift shops in search of throwaway gems you can prettify yourself.  
12.    FrugalBabe  and Mr. FrugalBabe are happily self-employed (from home! with kids!) and make it all work with savvy strategies like mega-harvesting, preserving and canning their own goods . 
13.    Daily Danny  designs and decorates with an eye on budget-friendly, upcycling home solutions.  Read: How to Find $500 Really Fast . 
14.    DIY Life  is a soothing site to hit when you feel like tackling projects on your own.  They’re also savvy enough to tell you when it’s time to put down the power tools and call the pros.  Check out: 10 Home Projects You Should Never DIY  
15.    Design*Sponge . While not overtly budget-minded, Design Sponge nevertheless inspires us to make our home a sanctuary of loveliness so we’re less tempted to throw money away willy-nilly on dining and entertaining out.  D*S’s Before & After projects like this geometric rug  are pure inspirational manna from the heavens.

FOOD 
16.    Field to Plate  educates us about seasonal produce picks, meaning spending less money, enjoying more flavor. Bookmark What’s in Season in Your Region 
17.    Dinner Tool  lets you plug in ingredients you’ve got on hand so you can whip up a meal in a flash without wasting a thing.  They’ve even got budget and healthy options for keeping it savvy and sweet.  
18.    Allrecipes  is another supah-bad ingredient search site and pulls up so many community-generated recipes, you’ll never waste another half-pound of produce again.  
19.    Wise Bread  has frugal everything, from food to travel to personal finance.  Don’t miss their Frugal Living columns like these 25 Quick, Cheap Lunch Ideas .  
20.    99 Cent Chef  makes really great food with really cheap ingredients.  Try Peas, Mint & Salmon Pasta .  
21.    Smitten Kitchen  has made “dining in” sexy again making unique recipes from “everyday” ingredients. Check out author Deb’s drool-worthy photos and Roasted Tomato Soup With Broiled Cheddar .

TRAVEL 
22.    Kayak  remains our number one pick for nabbing a savvy airfare deal.  We know there are others but this one always seems to turn up the price we click on.
23.    Airfarewatchdog  is our go-to for booking flights when we’ve got a destination in mind and a little extra time before we pull out the credit card.  Just sign up for airfare alerts, keep your eyes peeled and buy when you see the price you like. 
24.    Travelzoo  rounds up megadeals on hotels and travel packages all around the world.  Sign up for your favorite cities and keep an eye out for a “keeper.”
25.    IgoUgo  is our fave info-sharing site for the best scoop on deals and destinations from your fellow travelers.  Just type in your city and check out what users have to say.  
26.    AirBnB  is our new fave site for scooping up accommodation deals all around the world.  Forget budget-busting hotels when you can stay in a comfy, stylish flat in Paris for $60/night or Berlin for $40/night.  (True story, email us if you want deets)

GREEN LIVING 
27.    Treehugger  is a metropolis of green info and also has a super-sweet forum  for all your queries and quandaries about living a more sustainable, budget-friendly life.  
28.    The Daily Green  is a one-stop green-your-life shop with savvy money-saving ideas like these19 Easy Winterization Tips .  
29.    Green Upgrader  constantly makes us think twice before throwing something away.  TryRepair[ing] Old Shoes to Save Resources and Cash  
30.    Grow and Make  is the go-to site anytime we need green solutions such as these cheap, homemade, all-natural cleaners .  
31.    The Green Mom Review  reminds us that child-rearing doesn’t have to become a giant financial and consumer-waste pileup.  Try these Green Tips for Back-to-School .

FASHION 
32.    The Swapoholics  remind us that it’s never too late to get some swapping action going with your girlfriends--y'all will end up saving a ton revitalizing the stuff y'all have already got.  Find or list a swap here .  
33.    The Budget Fashionista  will inspire you to adopt the motto: frugality doesn't have to equal frumpality (well, almost. ;-).  Required Reading: Recession Proof Your Closet . 
34.    Cheap Jap  will restore your love of thrifting with her savvy sifting tips and brilliant finds.  Get inspired by her sartorial hit-the-jackpot post Damage-Free Digging .  
35.    PS I Made This  is a wonderland of DIY fashion and home projects often made from nothing more than everyday household objects.  Try this Hepburn-worthy chunky pearl necklace . 
36.    Cheap Chicas  whips up super savvy style with budget-friendly buys that won't put the slightest pressure on your wallet.  Don't miss 30 Looks for under $150 .  
37.    EcoSalon  puts sustainable fashion and beauty ideas right in the palm of your green hand.  Try5 Fashion Trends to Thrift Right Now .

BEAUTY & HEALTH 
38.    Makeup Alley  is an uber-smart beauty product review/board/swap webopolus that helps you try or find out which products are worth the dough before you blow your wad.  
39.    Jezebel .  Our favorite repository of topical sass has recently started turning out a pretty fine column, “Worth It ” spotlighting beauty products the writers swear by (but don’t get for free, because they are SERIOUS journalists, not beauty bloggers, dur)  
40.    Makeup and Beauty Blog  not only has smartly-written reviews galore, they’ve also got a sweet, regular “bargains’ column we love to hit when we’re looking for a cheap thrill. 
41.    NouveauCheap  not only treats you to fab affordable beauty finds, they also lasso up sweet super-coups* as well. (* = coupons, dur.) 
42.    My Home Remedies  is surely not the site to go to if you’re having an emergency, but for minor cuts, scrapes and colds, we’ve found many a cheap, helpful home remedy on their friendly and useful boards.  
43.    Weight Watchers  appears to be the only program that teaches sustainable life-long weight loss and maintenance. We regularly cruise their Fitness and Food  columns for budget-friendly, liveable solutions.  
44.    Greatist  gives you zippy, peppy, actionable ideas for boosting your activity, fitness and health goals.  Don’t miss The Greatist Challenge Series: Fitness on a Budget .

FAMILY & CHARITY 
45.    Simple Mom  hacks the home scene with smart tips, worksheets and eye-mazing projects likeWhat to do with Bad Paintings .  
46.    Freebies4Mom  has about a bazillion freebies every day.  Get on their RSS feed or follow them on Twitter , STAT! 
47.    Social Moms  is a warm friendly blankie of useful, money-saving info.  Snuggle up to What to do With Leftover Baby Cereal  for starters.  
48.    Money Saving Mom  doesn’t go bananas with crafts you can’t use, just dishes up super deals and ideas for living simply and affordably.  Check out 3 Ways You Can Save Money Without Changing Your Spending . 
49.    Savvy Sassy Moms  deals out fun, fab mom solutions like a budget-super-star. Try her Tips on Throwing a Green Birthday Party . 
50.    Charity Navigator  is the first, last and only site we hit before we want to do that savvy donation thing.  Find out how savvy (or not!) your fave charity is before you dig deep.

Six Persistent Money Myths That Seem To Stick Around

One of the most frustrating aspects of running The Simple Dollar is reading comments where readers, who are intending to do the right thing, actually spread misconceptions and falsehoods based on some false money myths that are floating around out there. I thought I’d correct six of these misconceptions right here, right now – and I’m sure that some of these will stir up some real discussion.

1. Investing in stocks is expensive, with fees up to and over 2% eating you alive.

This might have been true back in the 1970s, but with online discount brokerages and direct connections to investment houses, you don’t have to drown in brokerage fees. There are a lot of great options out there, but here are the two that I use (the best ones).

For individual stocks, I use Zecco. Zecco offers a handful of trades per month for free – no brokerage fees at all. They are able to afford this by putting advertising for other products on their site. There are also premium features available, but for the individual investor who just wants to buy and sell a few stocks on the side, it’s the best deal out there.

For mutual funds, I use Vanguard. Vanguard allows you to invest directly with them with no fees. They offer a huge number of index funds, most of them charging very low expenses, usually below 0.2%. You can manage everything online, easy as pie, and get started investing very quickly.

The idea that you have to pay huge brokerage fees to invest in the stock market is a myth from the days before the deregulation of the brokerage industry. In today’s world, there are a lot of investment options available and, as you can see, some clearly target the frugal investor.

2. Debit cards are less secure than credit cards.

If you look at the actual federal laws that describe the basic consumer protections for debit cards and for credit cards, then debit cards offer slightly less legal protection than credit cards. They’re actually equal (you’re only liable for $50) within two days of your realization of the fraud, but after that, debit cards offer less protection.

However, virtually all credit and debit cards offer far more protection than this. If you see a Visa or a MasterCard logo on your debit card or on your credit card, it means you have zero liability on fraudulent purchases.

As long as your debit card has a Visa or MasterCard logo on it and you tell any business to use your card as a credit card rather than a debit card if they ask (meaning you don’t enter your PIN), your debit card affords the same protections as a credit card. This is because, even though they’re often criticized for encouraging people to get into credit card debt, Visa and MasterCard both give people quite a bit of consumer protection.

3. Things are set up so that the rich get richer and the poor get poorer.

I used to believe this myth as well, but it simply isn’t true. Things are set up to reward people who work hard and who provide a lot of value to others, and believing in the myth that “the rich get richer and the poor get poorer” simply ignore the people who regularly come from nothing to become a success (often by working incredibly hard and using their talents in an intelligent fashion) as well as the people who have plenty and squander it away.

The truth is that if you work hard, work intelligently, and work to continually build value for yourself, you’ll do just fine in life. If you make the choice to just put in your hours at a 9 to 5 job and then play hard on the weekends, you’re also choosing to stay in the same socioeconomic class. If you make the choice to excel at your job and then spend at least part of your off hours starting a side business and/or improving yourself, you’re putting yourself in place to move up.

It’s not about “the man holding you down,” it’s about the choices you make every single day. The next time you sit around with your pals talking about how the system is set up against you, ask yourself if you couldn’t be doing something right now to improve your situation – or improve yourself.

4. I can save a huge amount of money hitting big sales.

Lots of people get very excited about Black Friday (and other huge sales), and why not? They offer impressively low prices on consumer goods of all varieties – you can save big money, right?

Actually, sales are designed to encourage excessive and premature purchasing. They show off these low prices on certain items to get you into the store and get you into the buying spirit. I’ll see an ad and think, “Wow, that game is on sale for only $40? I’ll pick it up!” Then, I’ll go into the store, spend $40 on that game (that I shouldn’t be spending), and then spy something else I “need,” like a big pack of AA batteries. Before I know it, I’ve spent $100 on stuff I shouldn’t have bought and could very easily live without.

Even better, some retailers actually mark things as being on “sale,” but in fact they’re markedup compared to their basic original price. My uncle personally did this when working at a major retail chain in the 1980s and 1990s – when applying a “sale” sticker to an item, he’d first put a sticker on below it with a hugely inflated price, then affix a “sale” sticker on top of that with a markdown from that inflated price, returning it to a price that’s still higher than what it was to begin with.

Sale prices are fine if they match up with something you’re already planning to buy, but if you see something in an ad and the sale price is convincing you to buy it, then that sale isn’t saving you money – it’s costing you, big time.

5. Refinancing your house when interest rates drop will always save you money.

A couple I know well refinances their home seemingly every time the interest rates drop a bit. They almost got hysterical with me when they found out that I wasn’t refinancing after the recent drops in interest rates. “You’re throwing away money!” they shouted at me.

The truth of the matter is that refinancing isn’t always the best choice – in fact, unless the difference between the rate you have now and the rate you would have is more than 1%, it probably isn’t worth it. There are several reasons why.

First, when you refinance, you have to pay a big fee up front. Do you have $3,000 or so to drop up front on this refinance? Sure, it will lower your monthly payments, but for many families, that’s a lot of money to just drop on a whim.

Second, the average homeowner moves long before their mortgage ends. If you pay for a refinance and then move in three years, you’ll almost always take a nice loss on that refinancing. Refinancing can be great if you plan to stay put for a while, but if you’re even remotely considering a move in the future, it may not be the best choice.

Third, the time investment hunting for the best refinance rate can be quite high, too. In order to find a really good rate, you’ll likely have to beat the pavement quite a bit to find it. What is your time worth to you in this hunt? If you spend forty hours tracking down the best rate, getting all of the paperwork done, and getting everything signed up, that’s a significant cost as well.

If you’re even considering refinancing, use a refinancing calculator and see how long it will take for your refinancing to be worth it. For us in our situation, I think it will be, but I think there will also be another interest rate cut in a month or two, so I’m going to hold off for the moment. Remember, refinancing is never an automatic “yes!”

6. If I have any significant money at all, I’d better get a financial planner.

With the huge amount of information available online and in books, you’re better off investing by yourself for several reasons:

Financial planners often charge substantial fees. Even if an investment advisor were able to find the absolute best investment for you, they still would be charging you some fees on top of that. If you can put in some legwork, do some reading, and find the right investments for yourself, you’ll keep those fees right in your pocket.

Financial planners are sometimes paid to steer you to certain investments, often subpar ones. When you pay someone else to manage your money, you’re expecting that they will steer you towards the best investments for you – and most financial planners will. However, there are some out there (I’ve interacted with one, myself) that will steer you into investments that aren’t necessarily the top of the line. Why? Because they’ll get a kickback by steering you there. This is rare, but it does happen – whenever you entrust someone else with your money, you are taking on some level of additional risk.

So why should a person ever use a financial planner? Financial planners are useful if you lack the confidence (or time) to manage your own money. If the thought of managing a significant amount of money worries you (or the thought of doing research on investments overwhelms you), then hire a planner – the ability to sleep at night is likely worth the fees and the small risk associated with it.

Just remember: you can do it yourself. It’s not that hard, and the relatively small amount of extra time you’ll spend on learning and doing it yourself will be well compensated by not having to pay fees.