Your Federal Tax Receipt. Find out what your taxes paid for.

This is cool (or depressing). Enter your total Federal tax payments INCLUDING social security payments by you and your employer. The display shows how your share is spent. Social Security payments are the largest at 20.4%

http://www.thirdway.org/taxreceipt

Quotes about Human Nature

"Human nature being what it is, there is a natural cycle to our emotions about the markets. We tend to go from terror during a major decline to disbelief through much of the subsequent advance—and then to a sense of ‘I’ve missed it, and I have to run to catch up—gotta jump on what’s hot!’ as the bull market continues. Again, this cycle of emotions is very human—but it’s a formula for very bad long-term investment outcomes.

First of all, remember that you can act your way to investment success, but you can’t react your way. If you react to falling markets by fleeing them, and then belatedly lunge at whatever’s fashionable in an attempt to catch up, you’ve actually found two ways to get hurt. We’ve talked a lot over the last couple of years about the mistake of panic; now may be the time to talk about the mistake of chasing immediate past performance.

Second only to panicking out of the markets, there may be no more sure way of getting substandard investment outcomes than by overinvesting in whatever has been red hot in the last block of time—and then, when that sector inevitably goes cold, chasing some newer vogue. Warren Buffett famously said that the investor of today does not profit from yesterday’s growth, and performance-chasing is the most painful way of demonstrating that truth to yourself. You are almost always trying to buy a track record that someone else already got, and that turns out not to be replicable.

I continue to believe that the most reliable approach is to diversify across several equity sectors and styles—large company and small company, growth and value, domestic and international—in roughly equal amounts, and then rebalance your portfolio back to its original allocations once a year around the same time. To me, this is the tortoise approach to long-term equity investing. And although we will surely see a red-hot hare go whizzing past us from time to time, as we continue to plod along we’ll sooner than later find that hare gasping in exhaustion at the side of the road—and we’ll pass him.

Broad diversification with annual rebalancing remains the best equity strategy I know to pursue your long-term financial goals. It is the antidote to panic in falling markets. But more to the point today, it is the antidote to the siren song of the one red-hot sector that is going to make up for all lost time."

--Nick Murray

Buying on Sale Applies to Stocks

“The concept of buying goods on sale is as ingrained in the American psyche as watching primetime sitcoms. We take for granted the idea that any good – a bar of soap, a Pontiac Grand Am or back-to-school clothing – is a better value when the price drops. When the local grocer advertises strip steaks on sale, your initial response might be to buy some. When your favorite fast-food restaurant runs a 99-cent sale on quarter-pounders, there’s a tendency to forego a home-cooked meal and load up on a sack full of patties and fries. Why are Americans like this? Because we crave value. We make mental notes of what constitutes a fair price and often wait until that price level is breached before we buy. We may scoff at a 24-pack of Pepsi priced at $5.99, but at $4.99 it’s suddenly within our range of perceived value.

“The financial markets may be the only institutions in the world that turn the basic doctrine of consumerism on its head. Investors are coached to believe that a stock is a better buy when the price rises, that it’s ‘safer’ to join the crowd in bidding the price up and ‘riskier’ to buy a stock declining in price. Wall Street, you see, likes to implant a ‘fear of omission’ in investors. We are led to believe that if we fail to buy a stock now, the price will only go higher and we will miss the rally.

“The first principle of value investing is to buy securities on sale, just as you would toiletries or a new automobile. You should not differentiate consumer habits from investing habits. There are one and the same. Whether you buy a grocery store item, shares of Intel, a bar of silver, a Treasury bond, or preferred stock in the local utility, you should try to obtain it on sale, when possible, to maximize its value per dollar of investment.”
- Timothy Vick in his 1999 book, Wall Street on Sale

Benjamin Franklin Quote

The man who trades freedom for security does not deserve nor will he ever receive either.
– Benjamin Franklin

Peter Lynch

"The key to making money in stocks is not to get scared out of them."
-Peter Lynch

The proper way to lick a bowl ...

Top Financial Scams

http://www.snopes.com/fraud/topscams.asp

I always find these amusing and they are worthy of your awareness.

I received a family member (friend) in distress email recently. The email seems almost possible at first until you think - why would this person be emailing me instead of calling a much more relevant person? The more relevant person knows, of course, that his mother is NOT in England on a trip.