Don't Quit Your Day Job…

In a recent article here at DQYDJ I posted a chart which graphed worldwide interest in ‘Frugality’ and ‘Personal Finance’ based upon the amount of interest registered by Google. There’s actually another interesting takeaway from that picture – interest in the term ‘Personal Finance’ is losing steam in the United States. Interest understandably grew during the recession, and it spikes in the beginning of every year, but interest is definitely trending downward. It opens up an important discussion: Are Americans losing interest in personal finance?

Check out our carnival entries and featured links for the week!

High oil prices and a declining dollar – the complex interaction between a war in Libya and a declining dollar (and a strengthening Euro, go figure!) means all commodities priced in dollars which are declining slower than the dollar, remaining the same, or increasing in price, are increasing for us Americans using dollars.  This sort of rise isn’t included in inflation measures - fuel and food prices are considered too volatile so are left out of the ‘core’ inflation rate.  However, we need food to survive and fuel to get around, so you’re definitely feeling the effects.

How has the recession been affecting the job market? A new report from the research firm Towers Watson says that workers are tending to stick with the same employer as long as possible in the midst of the current recession (US Workers were surveyed in November and December). The number of workers in the survey who say they want to work for a single company or two or three companies is an impressive 79%.

The release of the Employee Benefit Research Institute’s 2010 Retirement Confidence Survey is something that really interests a person like me. For years I’ve been digging into personal finance and economics texts in the ravenous pursuit of knowledge in the fields. However, occasionally a report like the RCS comes along and allows me to really benchmark my own behavior against that of my peers – other Americans. What does the report show? In my opinion, many people aren’t taking the whole investing for retirement thing seriously.

What would you say if someone offered you money to report your tax-evading friends? If you are staring at the screen incredulously, allow me to introduce you to Uncle Sam, who wants to make it worth your while to report on your loose-moraled tax cheat friends (and acquaintances!). If you know someone who is particularly dastardly, you could even make bank- the IRS will reward you 15% of the underpaid amount, up to a whopping $10 million!

Links from the week of January 4!

… isn’t always good for the individual investor. For example, the S&P 500 has rallied back more than 400 points since March, but the Federal Lending Rate is somewhere between 0 and 0.25%. The rate has all sorts of consequences for Main Street- it mostly affects short term rates. In the carnage, even asset classes that were once expected to provide a little more return have suffered- as of today, the average money market rate is a mere 1.07%.

How accurately can the stock market (as modeled by the S&P 500 Index) predict future recessions? If one charts the S&P 500 over the years and marks when recessions begin, is there any indication that the market senses it early? How accurate are the predictions? Can the market be used to prepare for downfalls? In short: somewhat, yes, very, probably not.

Here’s a shocker… Housing in 2008 was less affordable than in 2007, by one important measure. The government defines affordable housing (either renting or owning) as paying less than 30% of your pre-tax income for shelter. In 2008, 600,000 additional people (from 2007) met this criteria of paying more for housing. Unexpected.