I'm starting to feel like there's something fishy going on with Robert Kiyosaki.

After his "new rule" of money said that savers are losers, I wanted to find out a bit more about the rest of the personal finance advice he shells out. And I stumbled on the motherload.

Turns out, Kiyosaki runs (or lends his name to) a series of "wealth seminars" that, according to a consumer investigative report from CBC's Marketplace, is anything but about smart personal finance advice.

Marketplace went undercover into one of these Rich Dad classes, where students are told to increase their credit card limit to $100,000, verbally harassed if they ask hard questions, and basically sold on buying more expensive classes without receiving any sort of decent advice.

They don't allow embedding of the video, so you'll have to go to their site to see it.

Check out the video here.

P.S. As I mentioned the other day, thanks to strong sales, I'm heavily considering increasing the price of Automatic Finances from $7 to $17. I'm going to be making the final decision over the weekend, but it's looking pretty likely. If you want to save yourself $10, you shouldn't wait — you should get your copy now.

The new credit card rules will make it difficult for banks and credit card processors to be tricksters, which is my word for their erratic and arbitrary fees and penalties.

But despite the hostile opinions reported in the popular media, banks continue to have their way in financial matters.

Take the student loan program, where Congress decides that banks will get special favors to make student loans in the student loan program.

Student Loans Should Be Self-Sustaining

Since the early 1990s, college financial offices have been able to choose between a direct government loan and private lending by banks with a government guarantee against default.

Summary reports indicate that private loans are now more than half of student loans. In 18 years, private lenders jumped from nothing to more than half of student loans.

For the government to make loans, the original principal for the loans has to come from a Department of Education appropriation. However, when the government is the lender, they receive the interest and principal payments which can then be recycled as new loans.

With principal and interest returned to the government, the student loan lending can be a self-sustaining program without the need of a yearly appropriation. The interest payments received as students pay their loans can be added to the principal to make more loans, reduce interest rates in the future, or fund grants for especially needy students.

With private sector loans, the Federal Government accepts the financial risk of default to private lenders, but the interest payment and principal goes to the bank. That means more than half of student loans can generate losses, but no revenue for more student loans.

The Obama administration wants to make student loans a self-perpetuating program and eliminate student loan guarantees to private banks. A recent article in the Washington Post mentions a House bill passed over strong industry and Republican opposition that would make the switch to direct government lending.

Industry spokesmen say the bill is a government takeover that would squelch competition, diminish services to students and cost jobs.

The use of the word "takeover" is ironic since the student loan program goes back just over 40 years, but the subsidy for banks was introduced and passed in 1992 with the support of the President Clinton, a Democrat.

The Obama proposal suggests a take-back, but hardly a takeover.

There's No Competition if Congress Sets Rates

Competition in student loans suggests banks offer discounted interest rates to students to get their business. But Congress sets the interest rates for both subsidized and unsubsidized student loans, both resetting June 30th of each year.

The published interest rate implies a maximum rate, but it serves as a minimum rate.

I say minimum rate because I do not hear of banks offering a rate lower than the published rate. Having one rate and treating it as the rate for student loans eliminates competition that is a normal part of banking.

There should be evidence of competition if there is competition.

Judging from the opposition, the subsidy banks want to keep must be larger than I would have guessed. Nearly two years after a banking collapse, America has some new rules for credit card users, but nothing else.

The media keeps reporting Americans are angry with banks and bankers, but if that is true there is little reform to show for it.

I totally get why some in the financial media hate writing about index funds: they're easy to explain, there's no amazing fund manager behind them, and the story generally stays the same over time.

In essence, there's only so much to say about index funds. They work. You can't over-analyze and constantly produce content about them, like you can when stock picking.

But this latest argument is just lame. And incredibly lazy.

Courtesy of The Street (specifically Stan Luxenberg): Index Funds Aren't Always the Best Choice

Consider the Vanguard 500 Index Fund (VFINX), the oldest S&P 500 fund, which has declined 0.6% annually during the past 10 years and lagged 56% of large blend funds. Investors would have been better off owning the Franklin Rising Dividend Fund(FRDPX), an active large blend fund that returned 6.5% annually during the decade.

Wait, so your argument is that a mutual fund performed better than an index fund?

Really? Come on.

Of course there are actively managed funds that out-performed comparable index funds. The whole point of an index fund is not to beat the index, but to replicate it as closely as possible, with the lowest fees and lowest turnover possible.

But Stan, for real. You're going to base an entire argument against index funds by showing one mutual fund that did well over the past 10 years?

Well, Stan goes on to show a few different index funds in different sectors (foreign and emerging markets, for example), but the point remains the same: hindsight is always 20/20, and you'll never be able to accurately find the actively managed fund that beats the index, consistently, after fees and charges.

It just won't happen. (You've got like a 3% chance).

This is a lame argument; in fact, it's the lamest argument I've ever seen against index funds.

You don't have to be 55 to start thinking about retirement. In fact, if you've waited that long, you're in a bit of a pickle.

While retirement often seems far away if you're in in your prime working years, you need to make it a priority … now. Because the scary truth is that most people don't — and that's how most people end up broke.

Take a guess at how many American workers have less than $10,000 socked away for retirement.

Ready?

43%.

And how many have less than $1,000?

27%. Yes, 27%.

Think about it for a second. $1,000 is literally almost nothing to last on; $10,000 is probably less than a six-month emergency fund for most families.

And that's scary. Especially because you can't count on Social Security to provide much, if anything, to you.

Sure, some of it is because of the economy, and people raiding their retirement accounts to keep afloat. But that's not the entire problem; the number of people who have saved for retirement (like, ever) dropped from 75% last year to 69% this year.

It's an attitude change as much as it is anything else.

Here's how you save for retirement:

1. Start Now (or as soon as you have paid off all non-mortgage debts)
2. Invest in Your Company's 401k up to the match
3. Open a Roth IRA
4. Invest only in index funds
5. Dollar cost average if you don't have big chunks of money
6. Once a year, re-balance.

All of this information is available in the Automatic Finances ebook — the $7 download that will change your life. If you haven't gotten your copy yet, click here to download.

P.S. Based on current sales trends, I am heavily considering increasing the price of Automatic Finances from $7 to $17. Soon. So if you're on the fence but want to save yourself $10, get your copy now.

Unemployment continues to be one of the biggest problems of the great recession.

Despite its recent fall, it is still at 9.7%. But if we look at labor force and employment trends of the Bureau of Labor Statistics Current Population Survey back to 2000, the employment situation looks even worse.

The civilian labor force drifts upward but at a lower rate than population growth. The adult population keeps growing at annual rates around 1.2%, while the labor force grows at annual rates around 0.9%.

The difference is small for a year or two, but gets significant over time.

The Labor Force is Growing, But Employment Isn't Keeping Up

To be classified as in the labor force, you must be employed or unemployed looking for work.

The number of employed are up since 2000, but at much lower growth rate than the labor force, and at a much lower growth rate than those not in the labor force, and at a much lower growth rate than the unemployed.

The unemployed jumped from an average of 7 million in 2007 to 8.9 million in 2008 to 14.3 million in 2009, but those years were recession years.

Part of the spike in unemployment results from the recession, but the glacial pace of growth in the employed back to 2000 suggests that some of the unemployed come from longer term decline unrelated to the business cycle.

In the years from 2000 through 2009, the annual growth rate for the employed averaged 0.24%; from 2000 to 2008 it averaged 0.75%; from 2000 to 2007 it averaged 0.93%. The year 2007 had the highest average for employment of any year of published data, but still with slow growth going back to 2000.

Other questionable trends from 2000 to 2009 include the rapid growth of the part-time employed. Part-time employment was up over 4 million from 2000 to 2009, while the full-time employed dropped about a million.

Those employed from the ages of 16 to 54 dropped from 2000 to 2009. Those employed for ages over age 55 were up 8.9 million. Those leaving high school and college can't find jobs partly because there are not enough of them but also because more of their parents continue to work, perhaps because they cannot afford to retire or they need health care from a job.

The recession will end and employment will pick up, but the changes of the last decade point to a trend of a rising share of America's labor force remaining unemployed or out of the labor force.

We Need New Ideas for Work and Jobs

When America spends its way out of recessions, Americans assume there will be jobs for those who need them. If employment lags behind, we hear suggestions for business tax breaks or training.

The 40-hour work week, eight hours a day with time-and-a-half for overtime continues to be the federally mandated work week as it has been for nearly 90 years. If someone suggests a 35-hour work week, it might spread the work around to some of those now unemployed.

Business hates the idea and politicians won't touch it, but if the ominous trends in employment continue, someone will need to have a new idea. Right now that sounds like a revolution.

In the shortest month of the year, you had a lot to say about the stories posted here at Automatic Finances.

While there were fewer posts than normal during February, you certainly chimed in with your opinions on topics from cutting the Federal deficit to having an emergency fund to paying for college.

If you haven't downloaded your copy of Automatic Finances: 17 Days to Your Financial Freedom, you absolutely need to do it now. This is the must-have guide to taking control of your finances, and spending less time worrying about your money.

The Best of Automatic Finances: February 2010

1. What's More Important: An Emergency Fund or Being Debt Free?
2. How to Cut the Federal Deficit
3. Do the Wealthy Really Earn What They Produce?
4. Self-Employment Taxes: What You Need to Know
5. Are Savers Losers? Or, is Robert Kiyosaki For Real?
6. Who's to Blame for College Financial Aid Shortfalls?
7. Ask the Readers: Have You Filed Your Taxes Yet?
8. The Paper Documents You Actually Need to Keep
9. Ask the Readers: Does Corporate Campaign Financing Matter?
10. Can Internet Competition Open Up the Textbook Market?

If you're looking to get your dose of smart personal finance and money management, subscribe to the RSS feed (or via email) now!

I stumbled across this video the other day on YouTube, and let's just say, I was rolling my eyes the entire time.

But, it could just be me. Watch this video, let me know what you think in a comment, and then I'll share my entire thoughts.

The market for college textbooks has never worked well.

In the age before the Internet, new books tended to be sold as a monopoly in the college bookstore. After the first semester of a new textbook, a used book market emerges that competes with new books sold at the bookstore.

Used books remain as a competitive problem from the publisher's and bookstore's point of view since used books wipe out sales of new books. For decades, publisher strategy called for a new edition every couple of years to eliminate the used book market.

New textbook prices continue to rise partly because of new editions and the limitations in used book markets, but also because publishers sell their books by first getting college faculty to adopt them for their classes.

Publishers advertise and promote directly to college faculty, but college faculty adopt books without paying much attention to price.

More Books Should Lower Prices, Not Increase Theme

In the popular press, publishers can sell more books if they keep the price down and turn to paperback editions later.

Book publishers realized long ago that sales are limited to enrolled students and retail competition will not increase their market, but could threaten their price structure.

Textbooks are sold to enrolled students; few others will buy a 1,000 page economics or sociology tomb to read for fun. The publishers can't sell more books lowering the price, but many textbook markets are so big they don't want to be left out.

I once had a book representative for a major publisher tell me that sophomore sociology, psychology and economics textbooks had over a million sales a year across the entire college market. He also admitted that the market was over published because so many publishers felt obligated to compete for some part of the market.

In other words, new book prices keep rising with more and more books being published to decrease sales and profits to individual publishers.

Competition that works should lower prices and increase sales. Competition that works does not bring higher prices.

Rent-a-Text Emerges as Competition

The Washington Post recently published a news article describing a new angle in the college textbook market (College students rent textbooks to save money). The article quotes a college book store price of $142.65 for a new "Social Psychology" text. The rental price is $60 for a semester.

The rental company, chegg.com, operates through the Internet similar to Netflix. An order is placed and the book is sent to the students address with a prepaid return box.

Apparently, the books arrive in bright orange boxes that are very visible on campus and in the mail room. These orange boxes are setting off alarm bells at college books stores. The article mentions that the book store at George Mason University is planning to start a rental program.

It is doubtful a rental market for textbooks could function without the Internet to reach so many students and to keep an inventory of books. The Internet is here to stay, so maybe, finally, there will be some competition and students will get a break on textbooks.

Having an emergency fund is one of the most important steps to financial freedom, but if you listen to some personal finance pundits, it's not as important as being debt free. (Dave Ramsey, I'm looking at you.)

When you're financially free, you're out of debt and have a 3-6 month emergency fund, but when you're just starting out your financial journey, you'll likely have to choose between saving up cash for a significant emergency fund or throwing cash at your debt.

So which should you do?

There are legitimate arguments to each side of the debate; let's take a look.

Why It's Better to Be Debt Free

1. You don't owe anyone anything
2. Your costs are not increasing every day with interest payments
3. You're building your own net worth
4. Your entire financial situation is in your own hands

Why It's Better to Have an Emergency Fund

1. If unexpected expenses occur, you've got the money for it
2. You will sleep better at night (for real)
3. You have less to worry about day in and day out
4. In a tough economy, an emergency fund can save you after a job loss

Numbers vs. Emotions

Breaking down these different reasons, it seems like it's a debate about feeling secure (emergency fund) vs. monetary cost (debt free).

While that may not be the entirety of the discussion, I think it's safe to say that having an emergency fund will let you feel comfortable knowing that you're prepared for anything that comes your way, while being debt free allows you to truly build your own net worth.

Pundits like Ramsey advocate starting with a $1000 emergency fund and then attacking your debt. Personally, I think $1000 is way too low for even a starter emergency fund; in this economy, with unemployment so high, $1000 won't do much at all for you.

I've always been the kind to want to sleep better at night and have a formulated game plan for attacking debt, rather than use my safety net to become debt free. But that's just me.

I want to know what you think. Is it more important to have an emergency fund or to be debt free?

Let me know in a comment below.

This guest post comes from Michael, a contributing editor of the Dough Roller, a personal finance and investing blog, and Credit Card Offers IQ, a credit card review site.

Earlier this year, I was fortunate enough to be able to leave my 9-5 job and work on my own as a contractor. Setting my own hours and not having to answer to anyone but myself has certainly proven to be a welcomed change.

But when I recently filed my 2009 tax return, I was hit hard by an unwavering truth: I was subject to pay self-employment taxes.

So just what are self-employment taxes, and are you subject to them?

• If you earn more than $400, you are subject to self-employment tax
• The first $106,800 of your net earnings is taxed for both social security and Medicare. Any additional earnings are subject to the Medicare tax only.

By no means would I consider myself savvy when it comes to the tax department, but year after year of being paid through an employer made me an expert of the 10-minute end-of-year tax return. One W-2, and a few deductions and credits later, I was on my way to a sizable tax refund.

This year, I spent more than 10 times as long preparing my tax return with H&R Block at Home tax software, and I was only contracting for a few months.

Now that I work from home, I am kindly asked by the IRS to pay a self-employment tax. I thought that when I left my office job, I left the days of paying for social security and Medicare behind, but I was sadly mistaken. Not only do I still have to pay those taxes, but I now have to pay twice as much for them!

A total of  12.4% of my net earnings will go toward social security and 2.9% of my net earnings will go toward Medicare. I'm already in the 25% federal income tax bracket, so this means that on paper, 40% of my earnings are going straight to Uncle Sam. That sucks!

To be fair, 40% is a little high because I'm not taking things like deductions, credits, the fact that only a portion of my earnings are taxed at 25% and the rest at 15% and other tax saving methods into consideration.

One of the cool rules of the self-employment tax is that I can deduct half of what I actually pay in self-employment taxes and apply that deduction to my net earnings before I pay the tax, so it's not as bad as it could be. A quick example for those confused:

If I earned $10,000 in income, I would think that 15.3% of that ($1,530) will be lost to the Self Employment tax. But I can take half of that tax ($765) and deduct it from the original $10,000, leaving me a balance of $9,235. I then apply the 15.3% tax to the new amount, also known as your “net earnings,” and learn that my actual self-employment tax is $1,413, resulting in a savings of $117. Not anything to write home about, but a savings never the less.

So what do I need to know now that I have to pay self-employment taxes every year?

1. Each year, depending on the number of people I provide my services to, I need to collect Misc-1099 statements at the end of the year to file my taxes. 1099's are the W-2's of the contracting world and in order to avoid an audit, I need to make sure I report exactly what is on that form.
2. Now that I started the year as a contractor, I should probably pay quarterly taxes rather than wait until the end of the year. If you think it's a good idea simply to pay a year's worth of payroll, federal and state income taxes once a year, think again. The IRS will levy a severe underpayment penalty for holding on to its money the entire year. Payments are to be made April 15th, July 15th, October 15th and January 15th (The January payment will be in the following fiscal year).
3. Owning my own business, I will be keeping my eyes and ears open for every possible deduction to minimize the new taxes that I now need to pay. Previously, the standard deduction was all that I needed but those days are well behind me.
4. Somehow, I need to realize that every check I receive for my work is not 100% mine to keep. A good chunk of that belongs to the government, so in order not to spend everything I make, I've decided to set aside an online savings account specifically for payment of IRS taxes. Four times a year, I will take money out of that account to pay my estimated taxes the other days of the year, that account does not exist!

Self-Employment taxes can certainly be a drag if you're just getting started in a new business and have never heard of them before.

But when you're 65 and reaping the benefits of social security (reaping may be exaggerated and that's assuming there's anything left that far in the future) you won't be as upset that the IRS made you pay it.