Below is an image of portions of the e-mail:

Paypal Scam E-Mail

One clue is that the To: field had nothing in it. So while the e-mail was sent to me, they didn’t directly identify my account in the to field.  Most people don’t display the to field in their e-mail program, so that is not a dead giveway. Next, take a look at the product number. Usually PayPal e-mails identify the source of the transaction, which in this case it did not explicitly, although later in the e-mail it displayed someone’s eBay user ID. Since the product number looks a lot like an eBay number, I checked that out and of course found no product listed there.

Another clue is in the following section:

PayPal Scam E-mail Section 2

Here the name of the eBay seller supposedly is John Deprimo, but shortly after that there is an important note indicating that Cheryl Blake has an unconfirmed address.

But the full giveaway is really the links — and usually that is the case. For example, there are three links in the e-mail. One is to an e-mail address. One actually goes to PayPal. And then there is the Dispute Transaction link (see the first image in the post). If you hover over this link in Outlook (and in most e-mail web clients worth their salt) the actual target of the link is show.  In this case it is not PayPal, but some URL to “sytes.net.”  And even though it says encrypted link, it is not — instead it all goes across http unencrypted.

So for many this may be old news to you. But it happens every day when someone gets taken by something like this. Use caution and review all of the material in an e-mail. Go to the site directly instead of through the e-mail if you are suspicious. And for PayPal in particular, consider using the electronic security keys that require that you type in a number in addition to your password for logging into your account.

As we discussed in the previous post, I have am confidence that Yodlee, CashEdge, Mint and Geezeo have a very high level of security to protect your information. As an individual, you are more at risk from phishing or having your own computer compromised whether by virus, trojan horse, or theft.  Keep in mind though that there is significantly more incentive for someone to compromise the financial websites security than there is for someone to steal just your individual information. Regardless of whether you choose to use an account aggregator, or simply log on to your financial institution’s web site periodically, it is a good idea to put some basic protections in place.

So what are some of the ways that you can protect yourself from all of these threats?

Check Your Account Statements Often

Staying Safe On-line

First and foremost it is important to keep an eye on transactions in your accounts. It seems logical to check bank accounts and credit card statements frequently. But you also need to check brokerage accounts and retirement accounts frequently. With brokerages and retirement accounts, you have no protection from the maintainer of the account if someone were to drain the accounts. Your only real protection is to detect that it is happening quickly and take action before a distribution can be made.

Some financial institutions, of course, have protections on what happens when the address on the account gets changed. They may notify you via e-mail or regular mail if this happens. This helps in the event that a thief attempts to change the address before requesting a distribution. But this protection is inconsistent across different companies.

When you check your accounts, you are really just doing a quick scan to make sure there are no unexpected distributions or transactions. This is a case where account aggregators can actually improve your security. With aggregators you only need to look in one place to view the transactions.

How often should you check your accounts?  Generally you should check them within the window of protection. For instance, credit cards usually give you the most protection from fraudulent activity. Visa and Mastercard Debit Cards carry similar protection to credit cards, but only if you sign for the purchase as opposed to using your PIN.  But with brokerages and retirement accounts you have very little time to react.

My recommendation is that you check your accounts at least every three days to provide enough coverage for any account type.

Use Passwords Wisely

Password safety is very important, but it is easy to get into a system where you use the same password for every account or most accounts. For the ultra paranoid, the only real way to be safe here is to use a different password for every account. That is probably a bit overkill, but I would recommend protecting certain accounts with a strong unique password. For example, your primary bank account with the majority of your cash should be well protected. Some of your lessor accounts like the account aggregator, where you cannot move money around, may have a less strict password.

Here are some of the steps you can take to improve your password usage:

• Remembering unique and strong passwords is always a challenge. You have to make a choice whether you want fewer passwords and you want to memorize them, or whether you want to store them somewhere.
• If you choose to memorize them, a good tip is to use the first letter in each word of a well known phrase. Then you can replace some letters with numbers or capital letters to improve the strength.
• My personal choice is to store them using Keepass.  I have been using the 2.x version (don’t let the beta designation scare you, it is a very stable utility). There is certainly a risk if your Keepass file is stolen, so keep the password to it strong — and make sure you protect the file as much as possible.  Keepass can generate very strong passwords, and make it easy for you to quickly find the unique password for any site.
• Create passwords that are at least 8 characters in length and contain both lower case and upper case letters along with some numbers.  An 8 character password with just lower case letters in it takes only about 5 hours to break. Adding some alternate case letters and numbers into the password increases that time to 25 days.
• Change your passwords periodically, around once every two years if there are no breaches on your accounts.  If one of your accounts is breached, change all of your passwords as soon as possible. Again this is an area where Keepass can help keep track of the passwords.

Freeze Your Credit

I have not made it a secret that I think freezing your credit is one of the best ways to protect yourself.  There are some institutions that still use a Social Security as a user ID. Thankfully these are dwindling.  Although it won’t protect the specific account, freezing your credit will help protect your identity should a site that uses or stores your social security number be compromised.

Protect Your Computer

A complete discussion of appropriate ways to protect your computer and your home network is beyond the scope of this article, though I intend to cover it in the future. In the meantime, here are some high level tips for protecting your computer:

• Always use a router with a firewall for a home connection to the Internet
• For on the road, make sure a software firewall is installed
• Make sure you have up to date antivirus and spyware software
• Also keep the operating system updated, preferably by using the auto update feature
• If you have more than one computer, consider using aggregators or Quicken on the computer that is not used for day to day web surfing.  The computer you use for average daily use is where you are more likely to download and install things into the browser that could compromise your system.

For the Ultra Paranoid

If you really don’t like the idea of using the on-line account aggregators, you can always use Quicken or GNUCash to keep a view on your accounts. However if you are this concerned, I recommend downloading your transactions manually by logging into each site and downloading them from there. This way your credentials are generally kept between you and the financial institution (unless the financial institution itself uses Yodlee or CashEdge).

If want to use an on-line aggregator, Wesabe appears to be the safest of them all with its options to manually upload account data and a FireFox plugin to make that process easier. I am impressed with the flexibility of Wesabe’s security and flexibility — they recognize that not everyone wants to send their credentials to a central location. Also this manual approach and the FireFox plugin both work with ING Direct which has frequently caused problems with other on-line aggregators that don’t allow manual uploads.  Of course, this approach to uploading account information is less convenient than having the aggregator pull account information directly.

Conclusion

How safe you are with on-line banking really depends on the degree to which you do all of these things. If you are dilligent about checking your accounts, but don’t pay as much attention to your passwords or your home computer safety, then work to improve in those areas even if it isn’t an immediate change. The bottom line is that if you follow the practices outlined above regarding watching your accounts, using strong passwords, and keeping your computers safe, you should be able to use Quicken, GNUCash, Mint.com, or Geezeo with enough confidence.

This article is the introduction to the series.  When we talk about retirement, there are a couple of factors that are important to understand:

1. Retirement does not just mean “quit working.”  On this site it really means finding financial freedom to do what you want to do. That could be reduced or no work hours. Or it could mean starting a business, volunteering, or opening a daycare for grandchildren.  Retirement is just a convenient word for that, but financial independence is the real goal.
2. Reality matters here. If you do not have enough money already saved and invested to be financially independent with a portfolio growth of 6 – 10% annually over ten years, then you won’t be done in ten years.

Before we get started on investing, let’s do some pre-work. Specifically we need to determine the following:

• Are you debt free or nearly debt free?
• What is your risk tolerance?
• How much money do you need to be financially independent?

Are you debt free or nearly debt free?

With 10 years left to go before retirement, you should be on your way to being debt free with the exception of a mortgage. This isn’t easy, and it isn’t reality for everyone. However, it is where you need to start.  Debt quickly cancels income, which hurts your ability to accumulate wealth. Debt represents risk to you. Paying off debt gives you a guaranteed return matching your interest rate (unless the interest is deductible for you). Aside from overextending yourself and not having cash on hand (an emergency fund), there is little risk to paying off debt.

Some people want to compare the interest rate with the return on investments they could have.  Usually they forget risk in that equation.  For example, if you have a home equity loan at 8% from rates before the housing market crash, payments to that loan “earn” 8% while the stock market jumps up and down.

But really the bottom line is that you cannot feel financially independent with significant debt, and debt makes getting there that much more difficult. A mortgage is the only debt that you should not pay off before investing, since the home tied to the mortgage will gain value over time.

What is your risk tolerance?

This is a huge factor in deciding what to invest in. Many people moved happily along with their 401(k)’s until the 2001 tech crash and the latest recession turned them into “201(k)’s”.  If you have a low tolerance for risk, your investments need to reflect that. However, the sobering truth is that if you tolerate no risk in your portfolio, you will get little to no growth relative to inflation. Your entire contributions will need to support your financial freedom. A lot of people have moved their retirement investments into cash and conservative investments because of low risk tolerance. No one gets wealthy by investing without risk. Whether that risk is by investing time and energy into a new business, focusing intensely on your career, or putting money in the stock market.

Let’s say you are open to risk. Is there such a thing as too risky?  There absolutely is. Bernie Madoff and Enron have shown us this. No one person, no one stock should have all of your money, ever! They key is to spread the risk across areas that you are comfortable in.

So pick where you are at with one of the following (this will be important in future editions of this series):

• Conservative – You don’t ride roller coasters, and you tremor in fear at the thought of your retirement investments looking like a roller coaster.
• Moderate – You enjoy the thrill rides and roller coasters, but only on a few vacation weekends out of the year. You aren’t willing to put half of your money “at risk.”
• Aggressive – You realize what goes up can and will come down, you don’t read the news or you disregard the news, and you believe in the economic machine of our global economy

How much money do you need to retire / be financially independent?

This is not as difficult a question as it seems. Though you can save more to be comfortable and to reduce risk, the simple answer is that you need enough money so that the earnings meet or exceed the income of your “day job”. You can get buy with a bit less if you have no debt at all and most of your income is going to increasing your savings. A common suggestion is that you be able to replace 80% of your pre-retirement income. My suggestion is aim for 100% and re-evaluate every 5 years. If at that point you can replace 80% or more and are comfortable with that amount (for the rest of your life) then you are set.

Types of Investments

We are almost at a point where we can start looking at investments. When we talk about investing, while keeping in mind your risk tolerance, we must identify the key requirements of any investment that you make:

• You must understand the investment. You don’t have to understand it enough to run a mutual fund, for example. But you must understand what it invests in, how it grows, how the management company makes its money, and how the financial adviser that suggested it makes his/her money.
• You must accept volatility. Only a bank account, money market account, or a CD is going to have a guaranteed or nearly guaranteed rate of return.  Assuming you decided that your risk tolerance is at least enough to allow some growth over inflation, you will have to accept volatility in the market of whatever the investment is.

There are many people who are quite savvy about investing and meet both of these requirements hands down. This article series  is not really intended for that audience — those folks already know how to make money in the market, likely in both down and up markets. If you like your ETFs, your hedge funds, your variable annuities, and your gold, you won’t like my plan.  But if you are like the majority of people out there, you have a cursory knowledge of most investments and you do not want to become an expert in many different investments. So it really comes down to just a few investment types that I would recommend:

• A U.S. Market Index Fund
• An emerging market index fund (foreign markets like Brazil, China, India)
• Real Estate (either a Real Estate Investment Trust, REIT, or renting out property)
• Guaranteed fund, CDs, Money Markets, and Savings Accounts

Whoa!  I left a lot off of the list, right?  I don’t believe so. The reality is that investments beyond this group get more difficult to understand and manage. As we get into the remaining articles in this series, we will cover these investment types in more detail.If you wish to get more fancy than these options you certainly can. But my plan, and my recommendation to anyone, for the most part sticks within these categories.  I will describe later in the series some ideas on how to get a bit more aggressive, or how to “try out” other investments within your retirement portfolio. But as we cover this series the biggest question will become: what kind of mix of investments do you need?  This all comes down to your risk tolerance and the years you have left until financial independence / retirement. And that is why I am covering these topics in stages. So keep an eye out for the next article in the series!

So here we go…

1) Win the Lottery!

The upside of this approach is simply outstanding! Basically being handed millions of dollars for almost no work at all, how much better can it get? Some lotteries get into the hundreds of millions.  If you are considering this route, the basic approach to achieving your dreams is to go to a store, typically with a “Quick” “E” and “Mart” somewhere in the name. Once there, ask the person behind the counter for a ticket and hand them money.

There is a lot about the upside, but are there any drawbacks to this approach to financial freedom?  Well a few to keep in mind:

• You have to pick the winning numbers for the big lotteries. It turns out they don’t just give you a check.
• If you win the money, you have to do some math to figure out if you should take the lump sum or receive money over many years.
• You might have to share if someone else wins! Yuck…
• Things don’t always turn out well for the winners. Many times they end up worse off after winning than before. Maybe it was all about the experience!

Oh and one more thing… The chance that you become wealthy with this approach is somewhere around one in 195,249,054.

So for winning the lottery, Elusive Wealth says:

Don’t play the lottery unless you are also equally willing to set the dollar that would pay for the ticket on fire.

2) Sue Someone into Oblivion!

So winning the lottery isn’t for you, you need other options. Another way to score some fast cash is to sue someone.  You can either take the “easy” way by falling on someone’s sidewalk, suing them, and hoping they have a lucrative umbrella policy. Or you could go the more ethical route of accidentally spilling hot coffee on yourself and bringing litigation against McDonalds for not stopping it somehow.  Yes, this can be quite an attractive approach to wealth building!  However, with this there are also a few caveats:

• The odds of winning a baseless lawsuit probably are not much better than winning the lottery.  I couldn’t find any good statistics on this, I am sure it depends on the lawyers and the particular case.
• Some lawsuits may require actual physical injury before they can seriously be considered.
• If you are considering this, have you ever heard of ethics?

Well, you can also consider a combo play by actually suing the lottery.  This especially comes in handy if you play an instant lottery game where the last winning ticket was already played somewhere.

Elusive Wealth says:

Stick to suing only when you have a legitimate gripe that seriously caused a financial loss.  If that is the case though, go for it!

3) Get a Scam Named After You

Financially this one may rate above both suing someone and winning the lottery, if you have got what it takes.  Once you get a scam named after you, you know you have it made!  Madoff, Ponzi, and Stanford (Group) all know what I am talking about. Not only does this path to wealth come with riches, it is matched equally by fame!  Unfortunately there are some downsides:

• You can’t actually get the scam named unless you get caught.
• This is a touch less ethical than suing someone for no reason.

Elusive Wealth says:

Don’t even try scamming, unless you can make the scam both legal and official sounding, like “credit default swaps.”

4) Get a Job, Save Your Money

This option may look a bit out of place on this list, because it is the only one that results in actual, legitimate earned wealth. However, before I encourage anyone to go this route, I have to honestly lay out all of the downsides:

• To get wealthy with this approach, you might just need an education. The good news is, this isn’t always true. In fact many people do quite well without a college degree.
• To get a job, you have to apply for them and compete for them.
• Once you have a job you have to work.
• Saving money means not spending some of it.

Seems like getting a job has as many negatives of anything else on this list! Maybe it is not the best way to go. But consider this: people have done amazing things with the U.S. average household salary ($50,000) and even less. The truth is that by staying away from debt and making good choices, you stand a better chance of getting wealthy this way than any of the above options. Sure there can be some serious road bumps along the way, especially health issues and healthcare. If you think it can’t happen though, then that may be a major part of the problem. This IS how most people become wealthy.

Elusive Wealth says:

This is really the only option worth considering… what did you expect?

To start this discussion, let’s take a look at some statistics on the distribution of income in the United States. Maybe from this there is something to learn, or perhaps its just interesting data.  First let’s look at some of the 2005-2007 census data. Statistics show that we have 111.6 million households. So what is the relative wealth breakdown of those households?

Income Levels (2005-2007 Census Data)

The median income during this time period is right around $50,000. If you are significantly lower than that, you might be struggling to make ends meet. If you are higher than that, you might have a good income, especially relative to the rest of the country… but even then you might not feel like it is sufficient. And if you are way off the charts, you might be Obama-rich (congratulations if that is the case)!

So how do these numbers differ from the past?  Below is the same data from 1993.  You can see the trend as fewer households are in the under $15k range, and significantly more households are in the greater than $75k range.

Income Levels (1993 Census Data)

In 1993, the median income was $31,553 compared to the $50,000 number for 2005-2007.  During this time period (1993 to 2005) the consumer price index grew from 213.7 to 284.3, an increase of 33%. The median family income grew over 58%. So why are incomes outpacing consumer price index during that time period?  One of my thoughts is that a certain portion of that increase is represented in the increase of dual income families.

At the same time that households appear to have more money relative to the cost of goods, people have felt increasingly more strapped. Take a look at some data from Pew Research (The Median Debt-to-Income Ratio for Households With Debt Holdings) that really highlights what I believe to be a major contributor, if not the largest contributor, to any disparity in wealth and the “fading middle class.”  This graph shows the median debt to income ratio of high, middle and lower income earners in 1992 and 2004:

Median Debt to Income (1992 and 2004)

Notice the tremendous growth in debt compared to income! We can consider what goes into that. For instance, I have no doubts that rising health care costs are a contributor. But I also believe that our excess is a factor as well — our Starbucks, BMWs, and our willingness to take on house we cannot afford.. If you compare the income data, it seems we should feel better about our position not worse. And certainly it is difficult to see the middle class disappearing from the income data. Compared to inflation it seems middle class should be getting richer. But this debt is a tremendous burden. And doesn’t Congress provide a wonderful example of keeping debt within reason?

What are your thoughts on what contributes to this drastic increase in debt?

Because of the removal of MS Money from the market, the discussion of alternatives such as Mint.com and Quicken On-line came up. These tools are considered on-line account aggregators because they typically connect to your accounts at various institutions and download statements. Below is a list of common account aggregators:

• Mint.com
• Wesabe
• Yodlee
• Geezeo
• Quicken On-Line

The most common concern of using these on-line account aggregators is security. How safe are these on-line account aggregators?

Mint

Current Security Measures

First let’s take a look at the security the sites do provide, before we get into the possible weaknesses. We are going to focus on Mint.com, though all of the sites provide similar security. Mint.com’s security features can be viewed here. But here is a basic rundown of those features:

• Anonymimity
• 128-bit SSL encryption
• Secure facility protected by biometrics palm scanners and 24/7 security guards
• Bank-level data security standard (encryption, auditing, logging, backups, and safe-guarding data)
• The site has the VeriSign seal.
• Mint has anti-phishing protection provided by RSA

So what does all of this mean? Well, first, anonymimity means that Mint does not ask for personally identifying information, for the most part. This includes data like name, social security number, etc. However, they do ask for e-mail. The point here, though, is that the data that they have on you (financial account balances and transactions) cannot easily be traced specifically to you.

The 128 bit SSL means that the data you submit from your browser to Mint’s network is encrypted in a fairly difficult to decrypt manner. This is the web standard SSL that you see when you use a bank or a web site that has the security lock on your browser. This is good, it protects your data as it travels to Mint. The VeriSign seal primarily validates that this SSL encryption is in place between your computer and Mint’s servers. Once it gets to Mint, they can encrypt your data using SSL as they pass it around internally so that no one at Mint can see it. And when they send it to your bank or other service providers it can be and likely is encrypted with SSL.

The bank level data security helps give some assurances about what happens with your data, including your bank log on credentials, while it is inside Mint’s network. If encryption of your credentials and data is maintained always while in Mint’s network, then only a security breach of the encryption key could compromise the data. Usually it takes more than just having the key, you also have access to the devices that have the data stored on it. The bottom line is that once it reaches Mint’s servers, we have to take their word for it that it remains encrypted, and I will give them the benefit of the doubt on this based on what they have stated here.

Of course physical security like biometric palm scanners and security guards means they don’t just let anyone into their facility. That is a good thing.

Where Are the Issues?

Mint handles two types of sensitive data. One type of information it holds consists of records of your account balances and transactions that it has aggregated from various sources. This information is valuable to you, but has limited valuable to anyone else. As long as the login information for your bank is not stored along with the account data, you cannot do damage just knowing the location and amount of the account. That brings us to the second type of information, your login information, or credentials.

According to Mint.com, the credentials information is not stored within their network. From their site:

“We need your online banking user name and passwords so that we can help you organize and manage your accounts, that information is encrypted and transferred in a secure manner. We store only the information needed to save you the trouble of updating, syncing or uploading financial information manually. Your banking login credentials are securely stored by our online financial service providers. Your Mint login credentials are not shared with these providers.”

This is reassuring, the bank user names and passwords are not stored by Mint. Instead those credentials are stored by their online financial service providers. Basically after the first time that you enter your credentials for a financial institution, Mint connects to their online service provider to retrieve the account data, and also received an ID or token at the same time. That token allows them to retrieve, read only, account balance and transaction information in the future to keep Mint in sync with your accounts. Although it isn’t stated directly, on-line financial service providers seems to imply banks. In fact, banks could provide this service. However most of them do not. Most banks and financial institutions require your login information, including possibly additional information like answers to your “secret” questions.

The reality is that Mint’s online financial services provider(s), if there are more than one, are not the banks and financial institutions. Instead it is a third party company, Yodlee. As mentioned earlier, Yodlee also provides its own on-line aggregation service for customers.  While it is difficult to find direct mention of Mint using Yodlee behind the scenes, looking through the forums and some other websites you can find that Yodlee is indeed their provider. Below is Mint’s statement on its liability for any loss with their third party system(s):

“However, it is important to understand that these precautions apply only to our Site and systems. We exercise no control over how your information is stored, maintained or displayed by third parties or on third-party sites.”

So, while it is by no means a secret, it is important to keep in mind that if you use Mint, your credentials are stored somewhere. And they are all likely stored in one location at Yodlee. To me it seems clear that Mint.com obscures this fact. You can see in their forums that they use Yodlee, but you see no reference to it on their site directly. Although they don’t directly say it, their wording implies that credentials are not stored by them and are instead stored only by financial institutions. One of the reasons they do not make this obvious may be for security itself, however I do believe they are intentionally vague on this for marketing purposes.

I do not want to give the impression that if you use Mint your credentials are being passed around in numerous e-mails at Yodlee or outside of Yodlee. Yodlee itself is no slouch on security. They provide many of the security precautions that Mint provides, probably quite a bit more. Broke Grad Student provides a good synopsis on Mint Myths Debunked where it is mentioned that Fidelity and Bank of America use Yodlee, for example. So even without using Mint, your credentials may be stored at Yodlee for other financial institutions.

With that said, many people have an issue with having ALL of their account information in a single place. An intelligent, disgruntled employee at Yodlee could find a way to get to that data. It would be difficult, but not impossible. Using the desktop version of Quicken reduces that risk. Desktop Quicken stores your credentials locally on your computer. So unless your computer is compromised, that information is safe. Even if your computer is compromised, someone would have to break Quicken’s security measures. However there are two slight risks, even to the desktop version of Quicken:

• There is nothing stopping Quicken desktop from passing credential information through Quicken’s servers on the way to the financial institution. I don’t believe they do this, and I don’t believe they intend to do it. But it would be difficult to detect if they started. If they did, eventually I would expect this to come out and there would be negative repercussions with Quicken for such a move. But if they chose to do this, it would put Quicken desktop in the same position of every other on-line account aggregator.
• Quicken provides automatic bill pay. So unlike Mint there is the possibility of moving money from within Quicken desktop if someone were to break in. (But if someone breached Yodlee, they would have access to full credentials, not just read only tokens)

The Banks Role

For services like these on-line aggregators and Quicken desktop to work, Banks and financial institutions must provide the mechanism to retrieve account information. For years they have provided the ability to download transactions from their site into desktop software using Quicken and MS Money formats. In the past 5 years or so it has been possible to download some financial institution’s transactions directly from within these tools. Some banks have been supportive of that capability while others have been wary of the security.

Regarding on-line aggregators though, many banks have a firm position. Below is an excerpt from an e-mail from ING Direct to a customer regarding Mint.com:

“I understand that you recently had an issue trying to connect to our website using Mint.com. This service is commonly referred to as an account aggregator. While this service may have worked in the past, most users are finding that their aggregator does not work with our New Sign In Process.

The security of your information is very important to us. Once your personal information leaves ING DIRECT, we have no control over your information or how it is used by third parties. Because we have no way of monitoring how account aggregators address security, privacy or the use of cookies we are unable to support the use of these services.

To best protect your personal information and your funds, we recommend that you do not share your personal information (including your Customer Number and PIN) with any third party.”

Many other banks have the identical position that using account aggregators is at your own risk.

Conclusion

In the end you have to do what you feel comfortable with. Yodlee’s servers are many times more secure than most people’s home computers. Take that into consideration when considering the on-line aggregators versus something like Quicken’s desktop version. Consider your bank’s and other financial institutions position on using such services.

For my own part, I have been using Quicken for many years after giving up on MS Money. Recently I gave Mint a try and I do like its ease of use and slick interface. But I had significant trouble interfacing it with my ING Direct account, which is what led me to research this information. In the end I am going to stick with Quicken.

Ultimately the best thing you can do to protect yourself is to periodicially change your password and use strong passwords. If you choose the desktop Quicken solution, be sure you have a quality firewall and virus protection in place. There are some other best practices here that we can tackle in a future post.

Uncle Sam?

wealth. The reality though?  Capitalism has merely taken a small portion away of the vast wealth that Capitalism provided in the first place. Sure, it does not seem like a small portion. Times are tough and jobs are scarce. Only jobs aren’t as scarce as they have been in the past. And times aren’t as tough as they have been before.

Will times be as tough as they once were?  Maybe, if we keep trying hard enough. If we continue to get better at spreading the wealth around through taxing wealthy, we can get there. If we socialize health care, that will help. If our government keeps taking companies over that will help too.  We can go all the way to the dark ages and beyond if we want to.

What about the great disparity in wealth in our country? Clearly capitalism has increased the gap between the haves and have-nots, right? No again.  The haves are the have-nots employers! Take away the haves (by taking their money) and all you have are have-nots. Sure it’s just a little bit here and there, the haves won’t miss it. The haves won’t use it to hire someone either then. The government cannot hire everyone. The gap between wealthy and the middle class may be growing, so do we take the money away?  Or do we earn it by providing products they can use. And does the money of the wealthy sit under a mattress providing no value to anyone?  Sometimes, but usually it is invested in something that helps everyone produce goods that people need. If it is invested, what else might it be doing besides earning more money for the investor?  Providing jobs.

Well, take the banks — what an example of unfettered capitalism going wrong. Clearly they demonstrate that there must be regulation, right?  Sure, there must be some regulation – not everything fits into an absolute, capitalism is no different. But did capitalism really result in the mess we are in?  To a point, because with capitalism there will always be fluctuations in the marketplace. That is a good thing. But let’s look at other events that contributed to the mess:

• We, the people, borrowed any money we could get our hands on.  We, the people, bought houses we could not afford.
• We continued to be customers of mega banks that increasingly provided lower interest rates and poor customer service.
• Our U.S. Government decided that everyone deserves life, liberty, happiness, and a home. The Community Reinvestment Act encouraged banks to lend to people who could not afford homes. [This is not the cause, it is a contributor]

Do banks have an obligation to ensure that their customers can repay their loans. Absolutely. If they cannot, what happens?  The bank, its management, its shareholders, and unfortunately its employees move on to better endeavors. Why is this important?  Because this is creative destruction, where companies that fail and cannot produce go away. This is capitalism’s way of handling poor management, poor products, poor service, and corruption.

So after I say all of this, I must not care about others, right?  Me, and others that think like me, must be hoarders without empathy. No, I support capitalism because I care. Capitalism is the only system that allows the level of entrepreneurship we have seen in this country.  It is the only system that produces so many millionaires from the have-nots. Those who believe in the opportunity to create wealth for themselves must believe in capitalism, for without it that opportunity does not exist.

Late last year I purchased a Lenovo S10 netbook.  The netbook was great — very portable and versatile. The biggest downside to the netbook was just its speed, it sometimes got bogged down in handling tasks in the background while trying to surf the web. And it often struggled a bit with video. But overall the device met most of my needs, especially as a portable document reader. However in April I decided to purchase a Kindle anyway. What drove my decision, and has it been worth the price?

Here are the things that motivated me to make the purchase:

• Well let’s be honest, I am a gadget geek. I love gadgets. So I have to be truthful here and include this as a reason.
• There are publications and releases that are available on the Kindle that are not available elsewhere.
• The Kindle is even more portable than the netbook.
• The battery of the Kindle lasts longer, especially with the wireless turned off.
• Delivery of new books and many of the publications is free through Whispernet (though delivery of blog feeds costs $2 / month)
• The paper like screen of the Kindle is easier on the eyes than the netbook screen over a period of time.
• The whole device is well geared toward reading — making it easier to read anywhere. Finding Next Page on the Kindle is easier than finding Page Down on a netbook.
• The price of many of the books, newspapers, and magazines is less than the price in the bookstore or on the newsstand.

So those are the many reasons I decided to purchase the Kindle. And these reasons are fairly consistent with the pros you probably have already seen about the Kindle. However there are some negatives too, and often it is more important to consider the negative aspects before purchasing something than the positive ones.

Screen Looks Almost Like Paper

But I said this was a pro, why have I listed it here!?  It is a pro, and it is one of the best features of the Kindle.  However I have noticed a key difference with the Kindle versus using a computer eBook reader. The backlight on a computer, although sometimes harder on the eyes, helps me stay awake while reading. I have a wonderful habit of falling asleep if it is late while reading a paperback or hardcover book. The Kindle shares that same feature. The downside to the Kindle here, of course, is that it is more dangerous to drop the Kindle than it is a book!  This is a minor disadvantage, but I have found it to be true for me.

Newspapers and Magazines Are Incomplete

Most of the books are the full edition, though some of the figures in certain books are difficult to read. Periodicals and magazines on the other hand tend to have few of the illustrations, photos, and figures that the print edition has. Some of the magazines and newspapers actually have fewer articles than the print edition.  Although the price of these is generally much lower than print, it is disappointing to find a watered down Kindle edition of a publication. The good news here is that the magazines and newspapers all have a trial period so you can try it out before paying for it.

The new Kindle, with a larger screen, should help address the readability of some of the figures. The question remains as to whether the content providers will provide more of their content. But the new Kindle has a higher price point, so it may be wise to wait for the price to come down.

Missing Formats

The Kindle would be nearly complete if it supported PDF natively and MobiPocket. This would cover the majority of electronically published material. The newest Kindle edition supports native PDF, though I have not seen how accurate and readable its output is.  MobiPocket covers a wide range of content that is not already available through the Kindle. Overtime I expect more content to support the Kindle, eventually this will no longer be an issue.

The Kindle Doesn’t Come With a Cover

Considering the device costs over $300, throwing in a $20 cover to make sure it makes it past the first week would be considerate of Amazon.

Conclusion

Despite the few issues, I still love the Kindle and highly recommend it to everyone who likes to read, and even some people who don’t. The Kindle is a great resource for professional growth, staying informed, and entertainment. You can purchase the Kindle directly from Amazon.  Though for the frugal minded, if the price of the Kindle is close to affordable but still a roadblock for you, consider purchasing an older edition through eBay.

Because I highly recommend the Kindle, I feel it is worth endorsing.  If you are considering buying one, you can find it in one of the following two places:

http://www.ebay.com/

Having Jon as part of the team will help provide some alternative views from my own. I will leave you to guess whether he is more or less liberal than I am    Anyway Elusive Wealth welcomes him to the team, and we look forward to some good discussions.

Keep an eye out on his first post, and please provide your input!  Thanks for visiting Elusive Wealth.

http://www.hulu.com/watch/74840/the-dave-ramsey-show-frid-may-2-2009

Now that I have been able to watch it, I have some thoughts that I want to share on the event.  First and foremost I do recommend that everyone watch the Town Hall for Hope. The message is excellent despite any shortcomings I mention in the rest of this post.  It is important that we continue to work our way out of difficult economic times with as much optimism and hope as possible. Key components of Dave’s message in this event include:

• The fear and hysteria can get to anyone, the media has done an excellent job publicizing it.
• Although 45+% of people believe there job may be at jeopardy, the reality is that unemployment has increased only around 3% (this has gone up slightly since the broadcast; also, 3% is based on the official unemployment number — some believe it is optimistic because it does not include underemployed).
• For those who have lost their jobs, attitude is a critical component to moving on and landing the next job.
• Although it is always difficult starting a new business during an economic downturn, there are advantages and opportunities that exist when compared to times of strong economy.

Dave’s message is extremely consistent with his show, and as he puts it, this is common sense — this is advice your grandmother might give.  That is true to an extent, though not everyone believes that avoiding debt completely is necessary. In fact many believe debt can be a key to financial well being (for example, buy real estate at no money down). If you have listened to Dave’s radio show, watched his television program, or read his book The Total Money Makeover, you will see that much of the content of the Town Hall for Hope has been delivered before. That is acceptable here, because in this event it is delivered to a potentially wider audience.

Dave believes that you cannot separate the spiritual from finances. Maybe more accurately he believes you cannot separate the spiritual from anything in one’s life, financies being a component of life. Although occasionally he will encourage his listeners to seek advice from their pastor or their church, usually he keeps religion out of the discussion unless he knows one’s faith. A big part of his delivery of Financial Peace is through the church community, so clearly his message has tie-ins with religion. Like his traditional shows, this event was mostly finance and economy with a little bit of spiritual mixed in.  This may turn off viewers who do not hold views of any religion, or believe in religions other than Christianity.

Near the end of the event the question / answer session between David Asman and Dave Ramsey added less value to the overall conversation than the initial discussion and the question / answer session with viewers. With the crowd gone and the seats empty, it made me feel as if it were time for me to leave as well.

Dave adds many of his usual quips and expressions to much of the conversation, and if you listen to or watch his show you may be quite familiar with them – to the point where they are overused. But there is something rewarding in Dave’s delivery in general, whether part of this event or his show. To me that reward is a very motivating financial adviser that constantly reminding me of my own financial goals. There are certainly other ways to attain the same motivation, however for those that are looking for the motivation, Dave Ramsey provides it.

In the end, for anyone with uncertainty and concern about our economic climate, the Town Hall for Hope is a must watch. For those who want motivation and want to help spread the message of hope, there is value in the event as well. The only group I might recommend not watch the program are doomsayers, there may be too much hope for even the pessimistic to withstand.