My post on being a solar cell skeptic was included in this week’s Carnival of Personal Finance hosted at Money Crashers.  Here are a couple of other posts I enjoyed:

• Madison at My Dollar Plan wrote about a calculator at Vanguard.com that compares the cost of an ETF vs. a mutual fund.  It’s a particularly thorough calculator that includes, for example, the bid-ask spread on the ETF purchase.  Now if only the calculator was available at a more general site that included more than just Vanguard’s funds.  (Hint:  Are you listening Google?)

• The Canadian Finance Blog had a solid post with financial tips for soon-to-be-parents.  As the Mom of a young son, the best suggestion I have to expectant parents is to not go overboard in buying stuff (Canadian’s tip #5).  When in doubt, resist the urge to buy.  Babies need a lot less than you might think — a few clothes and toys, but mostly your bountiful love and attention.  They grow out of the baby stage quickly, so thoughtful friends and family might consider buying books or toys that will be useful in 6 or 12 months. Continue Reading »

An index fund is a mutual fund that owns all the stocks in a particular index.  The index could be the S&P 500, the NASDAQ 1000, the MSCI EAFE, or any of a hundred other indexes.  If you want your portfolio to have 80% domestic stocks and 20% international, then you could invest those proportions in two index funds.  This would instantly give you diversification across hundreds of underlying stocks.  Exchange traded funds (ETFs) are essentially the same thing, but they are considered slightly differently for tax purposes.  They are considered baskets of stocks instead of many individual stocks.  To me this is splitting hairs, but I’m sure it’s making investment companies buckets of money.  Let’s see if an ETF does us common folk any good.

Let’s compare two scenarios: investing $10,000 in an ETF vs. and index fund.

(Warning: Plot Spoiler: A good index fund is as good as an ETF; however, not all index funds are made the same.) Continue Reading »

One of the best tax deductions is a donation to charity.

There is a saying that heating with wood warms you twice:  once when you chop the wood, and once when you burn it.  Similarly, a donation to charity makes you feel good for supporting a worthwhile cause, and it puts a little lettuce back in your wallet.

Unfortunately, charitable donations are only deductible if you itemize.  If you don’t itemize, I’d still encourage you to contribute, because organizations need your help today more than ever.  I believe that the primary consideration in whether to spend money should be whether it makes your life more meaningful — not just what minimizes your taxes.

Nevertheless, if you can take the tax deduction, then let’s discuss how to maximize it. Continue Reading »