Archives For April 2012

I have been a Google Adsense user since 2005. EVERY MONTH my earnings (the amount I was actually paid) equaled my estimated earnings. Every month.

Until last October.

Last October I noticed that my earnings were slightly lower than my estimated earnings. Every month since October, my earnings have been less than my estimated earnings. It was never more than a percentage point or so. Not really a big deal.

Until March.

My March payment was 18.3% lower than my estimated earnings! That’s a significant amount! The Adsense website says that the payment may be slightly lower than the estimated earnings. Eighteen percent does not seem “slightly” lower.

So, I’m wondering, fellow bloggers and website administrators…

How were your March numbers?

My other question is…

Where does this money that Google takes back go? Do they keep it? I’m not a conspiracy theorist but think about the number of websites that Adsense provides ads for. If they hold back a percentage or two (or 18.3%), we’re talking significant money. Where is it going? Back to advertisers? To Google’s bottom line?

It wouldn’t bother me so much if they had better customer service. As far as I can tell, there’s nowhere I can turn to get this matter looked at by Google.

Amazon: WOW!

April 27, 2012

Thinking about Amazon (AMZN)…

With earnings of $1.37 per share (not sure if those are past or expected earnings) and a current price per share of $221.39, Amazon (AMZN) has an earnings yield of .62% (a P/E of 161.6…LOL!). One of three things is going to happen: earnings will catch up or the stock will come back down to earth. Or…people will continue to be wildly optimistic and keep Amazon in the stratosphere.

Think about that for a minute…

If Amazon traded at a much more reasonable P/E of 50, it would be priced at $68.50 (based on earnings of $1.37 per share) or it would need earnings of $4.43 per share to justify its $221 current price.

I don’t own any Amazon stock.

It’s been awhile since I have posted something controversial. This one is an opinion piece by Alan Blinder regarding the Supreme Court and the health care law.

Whether you are for or against the health care law, Alan Blinder misses the point of the Supreme Court, which is to decide whether or not something is constitutional. And, Mr. Blinder is trying to make this a party issue by claiming that since the Supreme Court is more conservative-leaning, it will vote along party lines.

Anyway, I’m interested to hear your thoughts on Mr. Blinder’s piece. Oh, and if you’re interested, there is an interesting reponse to the Blinder piece.

After posting my daughter’s “If I Had $100” piece yesterday, I got to thinking that it would be cool to compose a list of money-related questions to ask our kids and then share the responses with each other here on AFM.

So here are ten questions I came up with that I think would be fun to ask a kid:

• What is money?

• Where does money come from?

• Name one thing you would buy if you had $100.

• How much money do you think it takes to be considered “rich”?

• Would you consider our family “rich”?

• What job do you want to do when you grow up?

• How much do you think that job will pay?

• How much do you think a new house costs? A car?

• At what age do you think people retire?

• How much do you think people need to have saved up for retirement?

The last two may require some explanation and it could be that yr child is too young to understand. Regardless, I would still like to see what answers your kids come up with.

Please email your child’s response (along with their age and sex) to me (JLP – at – NOTE: please dont coach your kids. I want To see what the kids think no matter how silly their reponses may be. I’ll compile them into a blog post.


My daughter had to write a little story on the topic of “If I Had $100.” This is what she wrote:

A pool so I could swim. A pair of new shoes so I could have a matching outfit. A table cloth so our table can look pretty. New higheel because they are pretty. A new 3 story house for my parents so we can have 3 TVs. A dresser with hangers so we don’t have to buy some.

She’s not ready to leave the house yet. Crazy (and cute) kid. I love the way kids look at things.

From the Concise Encyclopedia of Economics regarding Social Security:

Social Security retirement benefits are based on average indexed monthly earnings for the thirty-five highest earnings years prior to retirement. The benefit formula is set up to favor lower-income workers. For example, in 2004, someone with average monthly earnings of $624 received a benefit that replaced 90 percent of earnings. Someone whose average monthly earnings were $3,760 received a benefit that replaced 42 percent of earnings, while someone with monthly earnings at the then-taxable maximum of $7,325 received a benefit that replaced only 28 percent of earnings.

This kind of proves the point I have been trying to make over the years that Social Security is progressive and not regressive like some people try to make it out to be. It would become ridiculously progressive were the income cap removed thereby subjecting all earnings to FICA.

As a side note, I think it’s kind of funny that the author of the article I link to has the last name “Saving.”

I have been tracking a retirement portfolio for several years here at AFM. It’s split 30/20/50 between domestic stocks, international stocks, and fixed income, respectively. The domestic stock portion is invested evenly in the 10 sector exchange-traded funds that make up the Dow Jones Total Market Index. The international stock portion was invested in the iShares MSCI EAFE Index Fund from 2004 through 2009 when it was replaced with the iShares MSCI All World (excluding the U.S.) Fund (ACWX). The fixed income portion was represented by the iShares Lehman Aggregate Bond Index Fund (AGG) and iShares Goldman Sachs Investop Corporate Bond Index Fund (LQD) from 2004 – 2008 when the iShares S&P/CitiGroup International Treasure Index Fund (IGOV) was added.

So, here is how the portfolio performed over the years:

As you can see, 2008 was a tough year. The entire portfolio was down 16.75% that year. The domestic equity portion lost 36.99%, the international equity portion was down 40.50%, and the fixed income portion was up 4.89%.

I’ll provide a PDF of the year-by-year portfolios in a follow-up.