Geranium Farm Home     Who's Who on the Farm     The Almost Daily eMo     Subscriptions     Coming Events     Links
Hodgepodge     More or Less Church     Ways of the World     Father Matthew     A Few Good Writers     Bookstore
Light a Prayer Candle     Message Board     Donations     Gifts For Life     Pennies From Heaven     Live Chat

Ways of the World

Carol Stone, business economist & active Episcopalian, brings you "Ways of the World". Exploring business & consumers & stewardship, we'll discuss everyday issues: kids & finances, gas prices, & some larger issues: what if foreigners start dumping our debt? And so on. We can provide answers & seek out sources for others. We'll talk about current events & perhaps get different perspectives from what the media says. Write to Carol. Let her know what's important to you:

Wednesday, June 27, 2007

Helpful Personal Finance Websites

Just over two weeks ago, we wrote here promising some commentary on subprime mortgage lending and on business profits. We still promise to do that! Those are important themes for our consideration. Meantime, though, we got caught up in ordinary daily living and in a brief trip to California for family business, so our Geranium Farm writing had to be postponed a bit longer than we anticipated.

However, while we were in California (the central part of the state near Sacramento), we stayed in one of those hotels that leaves a newspaper outside your door in the morning; this one was USA Today. For its "Managing Your Money" feature this past weekend, the paper's money and finance editors compiled a list of their favorite personal finance websites. This list covers many of the issues we talk about here, so it is a really handy tool. Here are some of the ones they think are best. All of them are free!

For general information on banking and credit cards, they like We've already talked about that one here too. You can find mortgage interest rates, credit card terms and deposit interest rates. Makes it easier to comparison shop and to get an idea if your local bank is competitive.

For our June 5 article here about Baby Boomer retirement, we found a number of sites with retirement information for you. The USA Today folks tell about a couple of other good organizations we should also know about: for the practicalities of senior living, the National Council on Aging helps connect seniors and their caregivers to service programs through And the Employee Benefit Research Institute has another site where you can calculate the savings you need for retirement: We like its title; has the right flavor to it, don't you think?

Debbie from Hodgepodge, whose son Brian is in college, has asked us to talk about financing that major life investment. The main savings tool for that these days is the tax-sheltered "529 plan", regulated by each state. USA Today points us to for comparisons of the plans in various states. And for other sources on financial aid for college, there's We'll come back to this topic ourselves. It bothers us a lot that many young people these days finish school – or seminary – with a heavy debt load; we want to want to see what alternative approaches there might be.

The USA Today article directs us to sources for mutual fund ratings, home buying and general financial planning. To read the material in full, go to their own website,, to the "Managing Your Money" section; this helpful catalog appeared in the June 22 edition of the paper.

* * * * *

On another note: in Mo. Crafton's eMo on June 26, she talks about some financial and retirement saving needs related to the Geranium Farm itself. In the middle of her comments she pays this column a nice compliment, and we surely do appreciate it. We also greatly appreciate Mo. Crafton's own work and wisdom, and we are sure you must also. So if you can, give something back to the Farm; help all of its work continue. Here's the place on the site where you can do that:

Monday, June 11, 2007

Upcoming Issues: Subprime Loans, Business Profits

A couple of months ago, Matt the Web-Dude installed a "hit counter" for us at the bottom of the picture frame here. As we have monitored the statistics it collects, we see that the largest number of you visit on Tuesdays. We'll be writing later than that this week, so we wanted to let you know now what's coming up, so hopefully, you'll come back!

There's been a lot of press lately about subprime mortgage lending and what a "scandal" it is. The Mortgage Bankers Association, the main mortgage trade association, will publish its mortgage delinquency data for the first quarter of 2007 on Thursday. So when we have those new figures, we'll talk about these subprime loans and about their role in what we've come to call consumer "debting". Watch for that, maybe on the weekend.

We're also working on a post – or more likely, several posts – about business profits and about business in general. This comes up presently because business profits and the stock market have recently been doing pretty well. In fact, as soon as we fretted about the stock market here back in February, it began to rise and has reached new records! Also, as we have discussed, business is taking the lead in addressing some aspects of environmental and development issues. So this seems a good time to look more broadly at business institutions. As a "business economist", I have a kind of insider's perspective on this. Eventually, I'd like to get to making connections between theology and business, but that's probably several articles and considerable head-scratching down the road. [If you've had EfM*, think "theological reflection".] Meantime, if you have some ideas, questions or arguments you'd like me to cover specifically, let me know. Write to

Thanks! See you in a few days!

*EfM stands for Education for Ministry, a program of lay theological education designed by the School of Theology at the University of the South "Sewanee". It is conducted in small groups throughout the country and several places abroad. I did it at Trinity Church, Wall Street, and the Diocese of Long Island has just recently begun to offer it. If you want more in-depth knowledge about the Bible, Church History and current issues, check it out. Exercises in spiritual autobiography and theological reflection augment the regular study lessons. A really informative and engaging program.

Tuesday, June 05, 2007

Presiding Bishop To Testify on Global Warming

From Episcopal Life Online:

"Citing the need for immediate attention to serious issues of global warming, Presiding Bishop Katharine Jefferts Schori will represent the National Council of Churches USA (NCC) at a June 7 Congressional hearing on global warming. . . .

"The Presiding Bishop, who in 1983 earned her doctorate in oceanography, approaches the issue of climate change from both scientific and theological perspectives. Her testimony to the Senate Committee notes the specific effects of climate change on those living in poverty. Jefferts Schori regularly emphasizes care for the environment as part of the Millennium Development Goals, affirmed within the Episcopal Church's current top mission priority."

Here is a link to the entire article about the Senate hearing:

Here is a copy of a recent Op-Ed article Bishop Jefferts Schori authored for the San Francisco Chronicle. It expresses her vision for working on the problem of climate change as it impacts the poor; we'd guess that her testimony will echo these sentiments.

Baby Boomer Retirement

"Have you thought about retirement?" We've asked this question before, and we'll no doubt ask it again. Retirement is an important matter in general and in particular because it makes us look beyond today. Debbie from Hodgepodge writes to ask us for ideas about what to do if our own time "beyond today" is approaching rapidly. What if we're in that great Baby Boom generation now nearing retirement and we haven't really begun to save for it? What can we do?

Since a good number of folk are in that circumstance, we don't have to go far to find advice. Two quick, current sources: Kiplinger's Personal Finance Retirement Planning 2007, a brand new magazine, dated Fall 2007, for $5.95 at good-sized newsstands and supermarket magazine racks. And the March 2007 issue of Money Magazine, which by now is probably available at your local public library. The Kiplinger's has an article titled "Late Bloomer" that addresses these questions, while the cover story of Money promises "Everything You've Always Needed To Know About Money…But Now You're Too Old To Ask". Some of their notions are a little too cheery and facile, as if you could change your attitude and behavior, if not overnight, then in just a couple of days. That's easier said than done, of course, but at least our thinking will get started in the right direction.

Spending and Debting – Again!
Two places that both of these popular magazines urge us retirement planners to start have, interestingly, no direct link to saving and investment. Those will come, to be sure, in just a couple of paragraphs, but the initial steps consider the other side of our financial statements, spending and debt. Ah, we've heard this before too! Make a budget, say Kiplinger's and Money, and Kiplinger's contains a nice worksheet to help you do this. You need to know how much money you need to live on. You will be more conscious, then, of how much you spend and what you're buying. You can see more easily where you might cut back. Money lists several websites that help you do this on-line, if you prefer.*

Pay down your debt. How many times in its young life has Ways of the World said this to you? When you're looking at retirement, paying off debt now will help then in two major ways: It reduces the cash drain of big payments. And it lowers your own personal risk at a time when other life factors may make you more vulnerable: your own health, your family's health and your income. One tactic you can use if you carry significant credit card debt is to pay it off using a home equity loan. Paying that off, in turn, costs you far less interest and may have some tax benefit.

401(k) Plans and IRAs
Now to saving and investment. One thing Ways of the World does not do is give investment advice. But we can make some broad statements about ways of saving and investing. We mentioned, for instance, in our November article on retirement that a surprisingly large number of people don't know anything about their employer's 401(k) or other pension plan. Now's the time to find out.

New federal legislation passed last year gives more employers the opportunity to enroll employees automatically in 401(k) programs unless the employee chooses to opt out. This is the reverse of the prior arrangement that called for the employee to make the enrollment decision. With the new law, employers will set initial investment amounts and asset allocations, and employees can choose to alter these. A kind of forced saving. Further, the new law also forces the employer to let employees diversify; many of these plans' investments have been restricted to the employer's own stock, but this can be phased down, if the employee chooses.

Note that you can contribute to both an IRA and a 401(k) in the same year. Within certain income limits (in 2007, $99,000 for singles, $156,000 for married couples) you can choose a Roth IRA. You make deposits into this account from after-tax income, but its income and capital gains will always be tax-free. Regular IRAs, which come from pre-tax income, are tax-deferred; they impose the tax on your withdrawals of the initial amount and its growth, and you must begin withdrawals by age 70-1/2. Roth IRAs have no such withdrawal requirement, and your money can continue to grow tax-free. This year, people under 50 can contribute $4,000 to a Roth IRA and those 50 and over can contribute $5,000. Last year's law also established a "Roth 401(k)". Whatever instrument you choose, take as much advantage as you can of tax-advantaged savings vehicles to enhance your return.

Asset Recipe: Mix Thoroughly
Both the Kiplinger and Money publications drew my attention to a new kind of mutual fund, called the "target date fund". As life circumstances change, so should our investment profile: when we are young, we want our investments to emphasize growth, but as we get older, it's more current income we need. The growth portfolio has a large proportion of stocks, while the income portfolio needs bonds and stocks that pay large dividends. These "target date" funds shift your money more-or-less automatically at preset "target dates" to achieve this remix. To learn more, including mutual fund companies that offer these, check out our source publications or their respective websites.

These comments about shifting around asset types highlight another general feature of our retirement plans: they should be diversified. No single asset type, much less a single asset, can be counted on to provide the cash we need at the time we need it. So combinations are best – some of this and some of that – some home equity, some stocks, some bonds, some simple bank account. And increasingly, as markets become more global, some of the stocks and bonds should represent companies and governments outside the United States.

Watch Those Fees
A couple of investment "don'ts". Don't invest in an asset you don't understand. "Variable universal life annuity". Excuse me? BDCs? REITs? Gas royalty pass-throughs? These may all be fine. But make sure you know how they work. And how their fees are structured.

Then the other "don't": stay away from high-fee instruments. There are hundreds of no-load mutual funds and funds with low expense ratios. Look at prospectuses and other information to find out about these costs. If someone is trying to sell you a high-fee product, make sure there's such a good reason for the fee that the investment still pays for you. [Someone we know really well has a particular asset for which something called "insurance charges" eats up almost all of the capital gain every quarter. Hmmm. Wouldn't her money be better off somewhere else?]

Think Twice About Early Retirement
One more pre-retirement concern, especially for us older Boomers. In reading up for this article, we were shocked – shocked!! – to learn that half of workers start to draw Social Security at age 62. This permanently reduces your benefit by about 25%, and until your "normal" retirement age there are earnings caps that are really restrictive. If you work and your income this year is more than just $12,960, earnings above that amount reduce your benefit check further until your regular retirement age (presently 65 years and 10 months). So unless there's a health or a family reason to stop working early, keep going, distasteful as this may seem in the moment. Depending on your profession, you might be able to work out a less-demanding job situation, so you can at least slow down. But please reconsider plans for "early retirement".

We still need to talk in more detail about Social Security and Medicare, and we will do that. The demographics are already in place: 3.3 workers per beneficiary in 2006 will become 2.3 in 2025 and headed still lower. The programs are likely to experience further benefit cuts and tax increases. Further, despite many politicians' disdain for private accounts, we're probably going to need them too – and don't look now but that automatic 401(k) enrollment scheme is a step in that direction. More to come.

*Here are some helpful websites. Google can bring you many more.

Social Security Administration:
Money Magazine:
Retirement planning worksheets: (select the "Money" item in the left margin menu. Further links to numerous resources) and
And Ms. Debbie's own personal choice: and associated pages

Copyright © 2003-Present Geranium Farm - All rights reserved.
Reproduction of any materials on this web site for any purpose
other than personal use without written consent is prohibited.