Worth Mentioning #25

Every have days where you feel like your head was put on backwards?  Forgive me since this feels like one of them, so we’ll just be quick with the Thank You’s today.


Love From Others

Love For Others

  • My favorite reading this week was a 4-part series of posts from Bankers Anonymous on compound interest and DCF calculations entitled The Most Powerful Math In The Universe Goes Untaught.  Like some of our efforts on our own blog to normalize talking about math, Bankers Anonymous argues that we’re missing out on some vital financial education with these two relatively basic math concepts.
  • On the other end of the spectrum, L Bee and The Money Tree argues that while Personal Finance is Personal, there are some absolute truths.  My favorite is: “If you know all your debt collectors by name, you’re not doing it right.”
  • And in the perfect illustration of why we hate HOAs, Budgeting In The Fun Stuff shares her recent interactions with Home Owners Association Bullies.


1 comment to Worth Mentioning #25

  • Karen Anne

    I remember years ago seeing William Buckley on some talk show discussing Social Security. This was a guy who was supposed to be brilliant. He totaled up what someone had been taxed of Social Security over, say, 40 years, and said something like, See, the contributions will be exhausted by benefits paid in the first 2-3 years. No mention of compound interest whatsoever.

    Just out of curiosity, when I got my statement from SS showing what I’d been taxed over the decades for it, I wrote a little program and plugged in the amounts, assuming 5% interest compounding. That was a reasonable guess when you take into account interest rates were double digit for awhile in the 1980s. And I added in it’s decreasing by the benefits once I started collecting, but the balance still earning compound interest.

    The result is I will never break even. If I live to 95, the government will still be sitting on a respectably sized pile of my money. I suspect everyone my age (late 60s) is in the same boat.

    This led me to conclude (1) Buckley was a financial ignoramus, (2) even though he apparently had pots of money he had no idea how it was managed, and (3) I wonder if the people who criticize Social Security (which is solvent, by the way for at least a couple more decades) as feeding off the young, etc. have any idea of how it actually works financially