Skip to content

Is your imposter syndrome costing you money?

Good morning, my friends, and welcome to another day of Apex Money. Let’s get right to the money stories!

Who pays for your rewards? Cross-subsidization in the credit-card market. [academic paper at SSRN] — “Sophisticated consumers profit from reward credit cards at the expense of naive consumers who lose money both in absolute terms and relative to classic cards…Banks lure consumers into the use of reward cards by offering lower interest rates than on comparable classic cards and bank profits are highest for borrowers in the middle of the credit score distribution. We show that credit card rewards transfer wealth from less to more educated, from poorer to richer, from rural to urban, and from high to low minority areas, thereby widening existing spatial disparities.”

In defense of dollar-cost averaging. [Of Dollars and Data] — “I am here to defend dollar cost averaging as the greatest investment approach ever invented for the individual investor. How so? Because I’m going to show you how it held up during one of the worsts period in U.S. stock market history—the mid 1960s to the early 1980s. And if it worked there, it can work anywhere. Let’s dig in.”

Is your imposter syndrome costing you money? [Refinery 29] — “With imposter syndrome comes the belief that we’re not mentally equipped to handle big things, and, in some cases, we tend to bury our heads in the sand, preferring instead to avoid the stress of overwhelming life admin. But in news that will shock no one, your money isn’t just taking care of itself.”

Lastly, from The Dave Ramsey Show here’s a caller asking for advice: “My husband thinks college is a waste of money!”

I know that Dave gets a lot of hate in the PF blogging space, but not from me. Sure, his advice has problems sometimes. And sure, he believes some things I don’t. So what? He’s helped millions of people, and his advice is great here too: “Your husband’s full of crap.” And Ramsey’s right. This woman’s husband is full of crap on this subject. Study after study shows that education is the single most important factor driving income.

Okay, that’s it for today. I’ll be back tomorrow with one last installment of Apex Money before the weekend. See you then!