The Question Game

by JT McGee

There’s this terrible, no good chain letter thing going around personal finance blogs. PK at DQYDJ.net was lame enough to tag me in it.

I’ll be a good sport and play along.

11 Questions

Would you rather be 8 feet tall and 100 pounds or 2 feet tall and 800 pounds?

Eight feet tall and 100 pounds, for sure. It’s the best of two very terrible options. But, hey – 2 feet tall and 800 pounds just sounds awful.

Pick one: Canada, United States, Mexico. Explain why it is superior to the other two.

The United States is superior because it’s the United States. Actually, I don’t know. I haven’t seen enough of the US to determine whether or not I actually like it – Canada and Mexico aren’t yet on my “I’ve been there!” list.

What is the best type of Personal Finance Writer? (Think of writer archetypes – Investor, Debt Blogger, Wild-card, Contrarian…)

The kind that does not assume any reader lacks the intellect to manage a four-function calculator. Most everyone has passed high school algebra, which means anyone should be able to follow along with the most rudimentary mathematics necessary for basic finance and personal finance.

There are two things I dislike most: emotions in finance (money has no feelings, bro) and rigid, rules-based approaches to very dynamic problems. Dave Ramsey may have helped millions of individuals better their finances, but he’s also hurt millions of individuals who take advice on specific personal finance issues from his followers. It’s like taking code from a Microsoft OS and using it in a Mac OS. It just doesn’t work – and the whole computer falls apart.

Lump sum investing versus dollar cost averaging… Which is better?

I had a very long, drawn out answer to this before realizing that I could be more concise – why would anyone ever choose to be average?

It pains me that being “average” when it comes to investing is such a good thing. I mean, this is one of the few things where a minute edge over average can make you a billionaire. If I can beat the market reliably as a commuter school/community college student with no formal training in finance other than the prerequisites in finance (think bowling, chemistry, business law) then anyone can. That’s really all there is to it, but I’m never going to convince anyone that it is true.

Look to the people who have decimated the market over the long haul – Warren Buffett, David Dodd, Benjamin Graham, Seth Klarman, and others. The common denominator is the value approach to investing. Their success is not a fluke – an anomaly. Alas, pointing to these examples and their common traits is against everything personal finance. Oh well.

In the Led Zeppelin song Stairway to Heaven, what does the lyric “to be a rock and not to roll” mean? Bonus points if you can somehow work Boleskine House into your answer.

No idea.

What’s your favorite dinosaur?

Uh, littlefoot from Land Before Time. Sorry – 90’s kid.

Paper or Plastic?

Paper. We’re far too quick to use oil for most everything. Shame, too, because there’s really no good way to make more of it. Oil’s best use is in plastics, and I’d like to have plastics for a long time to come in something other than grocery bags. Don’t be wasteful!

I don’t even understand why we use oil to power cars. It all seems pretty silly, really, given that oil has far more uses where oil has no substitute.

If you had to pick, would you consider yourself a dog-person or a cat-person?

Dog person. However, after a run-in with a mouse in my apartment (Midwest apartments adjacent to corn fields suck) I really wanted to get a cat.

Dogs are a “damned if you do, damned if you don’t” item where the grass always looks greener on the other side. Maybe I’m just indecisive.

What would you do with an extra $100,000?

I would do one-tenth of my list of things I would do with $1 million. Sit on it for a week, then put it in my brokerage account and buy mo’ stock in mo’ companies until I have mo’ money than $100,000.

What’s the best thing you ever purchased?

This actually fits the theme of more personal, personal finance. Years ago, my computer was on the fritz. I was only a kid, and didn’t have a lot of money laying around. While in college, and broke herself, my sister loaned me something like $500 to buy a new computer.

It was single-handedly the best purchase I ever made. Really, it changed my life in ways that I can’t put into words. I promptly repaid her within months, having gotten myself back into the game of making money online – which, by the way, is way easier with a computer.

I need to call her and tell her how thankful I am she did that. Seriously, she had to be beyond broke at the time. I mean, she had just finished 6 years of school to become a physical therapist, and was working her clinical requirements with practically no income and all kinds of expenses. She believed in me in a way that most people will not.

So, that was undoubtedly my best purchase, but it’s really not as much about the purchase as it was the experience. Man, I owe my sister big time. She’s amazing.

Would you rather lose your phone or the internet for a week?

My phone. One of the few technological pieces of work that I consider to be more of a liability than an asset.

{ 4 comments… read them below or add one }

Darwin's Money March 24, 2012 at 13:22

Wow, those are some fun questions; I would have many of the same answers. Lump sum rules over DCA because in the long-term, investments should have an upward slope; yes, some would be burnt buy buying during a spike, but given a long enough period, almost all equity (and certainly all bond) investments would have fared better with lump sum

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JT McGee March 25, 2012 at 10:44

My view is that finance has a few parts: capital, time, and risk. DCA makes time practically worthless, meaning that you’re down to capital and risk to make money. Dollar cost averaging means that you essentially bet on being able to out-earn/out-save someone else. Or take on greater risk for performance. I don’t really like those options.

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PK March 24, 2012 at 13:50

“However, after a run-in with a mouse in my apartment (Midwest apartments adjacent to corn fields suck) I really wanted to get a cat.” – Get a rat terrier, it was bred to kill small rodents.

Glad I suckered you in!

Reply

JT McGee March 25, 2012 at 10:44

Rat terriers aren’t real dogs.

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