Just Business

At the beginning of April, when I lowered the prices on the Kindle editions of my books (from $9.99 to $2.99 or $3.99, depending on the book), I promised to keep you folks informed as to how the experiment played out and whether or not I would continue offering the reduced prices.

April’s almost over, so I suppose it’s time to do that.

In March, people bought 284 Kindle versions of my books. As of this writing, it looks like approximately 800 Kindle books will have sold by the end of April. In terms of revenue, that’s actually a slight decline (~$100). But I’m satisfied with that trade-off: almost three-times as many people being exposed to the information with only a slight reduction in income.*

So for now at least, the prices will stay at their current levels. There’s always the possibility I’ll change prices in the future, but I’ll warn you first.

Before we move on to our weekly links, I thought I’d share a brief, fun video from one of the regulars at the Bogleheads forum (username “Boglenaut”). As a bit of background for those who are unfamiliar: The Bogleheads forum is potentially the best place on the entire internet for discussing investment-related questions.

• The Race: Active vs. Index Mutual Funds

Investing Articles

• CF Cents posted a very kind review of my book Can I Retire?
• Advisors’ Pay Tells What They Do from Rick Ferri
• Tackling Tactical Asset Allocation from Portfolioist
• Time to Spring Clean Your Portfolio from MintLife
• Don’t Treat Your 401(k) Like a Savings Account from GenX Finance
• Roth Conversion Pro-Rata Rule with Inherited IRAs from The Finance Buff
• Will Roth Withdrawals Always be Tax Free? from Bible Money Matters
• Do Synthetic ETFs Pose a Risk to Global Financial Stability? from Monevator

Other Money-Related Articles

• How I Saved -$97 with Priceline from Money Smarts Blog
• Even Paid-Off Vehicles Can Be Expensive from Debt Free Adventure
• Review Recurring Expenses Regularly from Couple Money
• How to Find a Good Deal on a Rental Apartment from Canadian Finance Blog

Blog Carnivals

• Totally Money Blog Carnival hosted by Stupid Cents
• Carnival of Financial Planning hosted by Control Your Cash
• Carnival of Personal Finance hosted by Upside of Money
• Carnival of Wealth hosted by Personal Dividends
• Wealth Builder Carnival hosted by My Wealth Builder

Thanks for reading!

*This is actually somewhat of an oversimplification. Much like investing, publishing involves making decisions with imperfect information. In all likelihood, there are actually several other variables at work as well. And if I hadn’t changed the prices, either:

• Sales would have declined by more than $100 (and it’s only the price reduction that kept things from falling further), or
• Sales actually would have grown this month (but the price reduction kept them from doing so).

But of course, I have no way of knowing with certainty which of those is the case.

Retiring Soon? Pick Up a Copy of My New Book:

Can I Retire? Managing a Retirement Portfolio Explained in 100 Pages or Less (Click here to see it on Amazon.)

Finding a place to rent for two months is turning out to be a lot more difficult than we thought.  Apparently landlords aren’t too keen on short term rentals to people with pets…so that’s two strikes against us right off the bat.

And for all of this talk of renting instead of owning, I’m not seeing much of a discount on rent in our city.  Most of the places we’ve looked at are asking for as much per month as we currently pay on our mortgage.  The good news is that our new house is still on schedule for an August 1st possession date, even with the rotten weather this Spring.

Enough complaining, let’s take a look at some interesting articles from the personal finance world this week:

1. Canadian Capitalist weighed in on Garth Turner’s Dodgy Advice
2. Million Dollar Journey looks at Types of Stock Chart Patterns
3. Financial Uproar is Obsessed About Money
4. Canadian Finance Blog explains How to Find the Best Rental Apartment
5. Money Smarts Blog Saved Money with Priceline, sort of.
6. Retire Happy Blog asks Should You Write Your Own Will?
7. The Passive Income Earner reviews Telus Corporation
8. Young and Thrifty created the Ultimate Guide to Canadian Deals Websites
9. Give Me Back My Five Bucks Breaks Down the Numbers on Her First Home
10. Studenomics discusses an interesting topic of Investing Your Student Loans

We were also mentioned in the following blog carnivals this week:

• Upside of Money hosted the Carnival of Personal Finance and included Save Money Purchasing Beef In Bulk
• Personal Dividends hosted the Carnival of Wealth and included When You Need Cash From Your Investments
• Canadian Finance Blog hosted the Canadian Finance Carnival and included Delta Privilege Hotel Rewards Program: A Review
• Control Your Cash hosted the Carnival of Financial Planning and included Why You Shouldn’t Care About Credit Card Interest Rates
• Stupid Cents hosted the Totally Money Blog Carnival and included Save Money Purchasing Beef In Bulk
• My Wealth Builder hosted the Wealth Builder Carnival and included When You Need Cash From Your Investments

Don’t forget that you can subscribe to our RSS Feed, follow us on Twitter and like us on Facebook.

Have a great weekend!

Share and Enjoy:

• What’s New Around The Blogosphere: May 6th, 2011
• What’s New Around The Blogosphere: April 22nd, 2011
• What’s New Around The Blogosphere: April 15th, 2011
• What’s New Around The Blogosphere: April 8th, 2011
• What’s New Around The Blogosphere: April 1st, 2011

One of the most reliable ways to improve your investment returns is to reduce the investment costs you’re paying. That’s why low-cost index funds (or ETFs, if you can buy them without a commission) are my investment vehicle of choice.

From time to time, however, people ask me whether it makes sense to put together a portfolio of individual stocks–not to beat the market, but simply to reduce costs. After all, individual stock holdings have no ongoing costs, whereas even low-cost index funds cost something.

It’s true that, depending on how much you pay for stock trades, you could reduce your costs that way. And if you’re investing in a taxable account, it could provide additional tax loss harvesting opportunities as well.

But is it Worth the Hassle?

At a very minimum, I wouldn’t be comfortable replacing my U.S. stock index fund with less than 25 holdings or so (for instance, 2 or 3 companies from each of the 10 industries/sectors listed here). And the same goes for my international stock index fund.

Surely many investors would see things differently, but setting up and tracking a 50-stock portfolio doesn’t sound fun to me.

And the amount of money you stand to save isn’t exactly astronomical. For example, if the stock portion of your portfolio was, let’s say, $600,000 and it was allocated 2/3 in Vanguard Total Stock Market and 1/3 in Vanguard Total International Stock, then the most you would stand to save in fund expenses would be $680 per year. (And that’s if you paid exactly $0 for commissions on your stock trades.)

For some investors–those with very large portfolios or those who don’t mind additional complexity–the savings may be worth it. But if (like me) you place a lot of value on simplicity, it just doesn’t make sense.

What about Replacing Your Bond Index Fund?

For two reasons, I’d argue that it’s more likely to make sense to eliminate the bond index fund in your portfolio and replace it with individual holdings.

First, Treasury bonds and CDs carry as close to zero credit risk as is possible (assuming you stay under the FDIC limit). As a result, you don’t have to diversify nearly as broadly as you would when replacing a stock index fund. A handful of Treasury bonds or CDs–one of each of, say, 5 different maturities–would be perfectly reasonable.

Second, you can often find higher yields on CDs than on Treasury bonds of similar maturity–thereby allowing you to increase your return without a meaningful increase in risk.

But again, it’s more hassle–shopping around for the best CD rates rather than just funneling money into the same index fund every month. Only you can decide whether or not that makes sense for you.

Retiring Soon? Pick Up a Copy of My New Book:

Can I Retire? Managing a Retirement Portfolio Explained in 100 Pages or Less (Click here to see it on Amazon.)

I was quite flattered (and surprised) this week to hear that Oblivious Investor was mentioned by Money in their annual “100 Best Money Moves” article. I don’t know whose idea that was, but thank you!

A few readers who came over via that article correctly pointed out that my site didn’t have any indicator of which articles first-time visitors should start with. As such, I’ve added a widget in the right sidebar with links to a few articles that I think serve as a good introduction to Oblivious Investor:

• The Advantages of Investing in Index Funds
• How Often Do You Check Your Portfolio?
• What’s in My Portfolio?
• 8 Simple Portfolios

I hope you enjoy them.

And on that note, I particularly enjoyed the following articles from around the blogosphere this week:

Investing Articles

• Bond Yield and Risks Triangle from The Finance Buff
• Rebalancing Your Portfolio from Get Rich Slowly
• Rebalancing via New Contributions from Monevator
• America’s Top Advisors: How Are They Made? from The Investment Fiduciary
• Saving for Retirement without a 401(k) from PT Money
• Day-Trading is a Total Scam from Darwin’s Money
• Balancing Liquid Cash and Investments from Cash Money Life
• I was recently interviewed by DebtManagement.net

Tax-Related Articles

• Tax Planning Beyond Deductions from CafeTax
• What if I Miss the Tax Deadline? from Bible Money Matters
• Dealing with a Letter from the IRS from Couple Money

Other Money-Related Articles

• When You Receive a Windfall, Treat it Right from The Digerati Life
• How Old Does Your Resume Make You Look? from Financial Highway
• How to Check the Security of Your Insurance Company from Wealth Pilgrim
• Choosing a Disability Policy from The Wisdom Journal

Blog Carnivals

• Totally Money Blog Carnival hosted by The College Investor
• Carnival of Wealth hosted by Personal Dividends
• Road to Financial Independence hosted by One Family’s Blog
• Carnival of Financial Planning hosted by Nerd Wallet

Thanks for reading!

Retiring Soon? Pick Up a Copy of My New Book:

Can I Retire? Managing a Retirement Portfolio Explained in 100 Pages or Less (Click here to see it on Amazon.)