Conventional wisdom suggests that buying a home is a better long-term bet than renting:  Common arguments in favor of it include an opportunity to build equity, mortgage interest tax deductions and a chance to take advantage of rising home prices.

However, Jack Hough with Smart Money presents a compelling argument that it’s actually better to rent.  He presents an analysis done by Robert Shiller, the author of Irrational Exhuberance, that suggests that the real return on houses between 1890 and 2004 is zero.  And when compared to the long-term return for stocks (7%), it’s actually much better to invest in stocks instead of tying your capital up in a home.

And while he touches on the cost of upkeep; I would argue that the actual return is likely negative once you account for routine maintenance such as lawncare and periodic care such as painting and remodeling.  In addition, the real return drops even further once you account for the average drop in home values between 2004 and the present.

This week’s Carnival of Personal Finance was hosted by DebtKid and included FZ’s recent article on avoiding value traps.

Other interesting articles from this week’s carnival include:

• Frugal Dad’s look at a recent study that found that half of American workers are living paycheck to paycheck.
• Orange 4 Money covers 20 ways to increase your net worth.
• Our Four Pence lists 101 ways to save money in everyday life.

If you have the opportunity, check them out!

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• Newegg: Antec Three Hundred Black ATX Mid Tower Case $39.95
• Walmart: Free Sample of Pamprin Multi-Symptom Tablets
• Audible: Free Download of Black River by Dean Koontz
• o.b. Tampon: Free Sample and Carrying Case

Get 2 Medium 2 Topping Pizzas for just $14.99 when you order online and use coupon code UPBEAT.  Pizzas delivered in 30 minutes or less.  Expiration unknown.  See website for complete terms and conditions.

Through October 3rd, save 20% on purchases from Eastbay.com when you use coupon code LKS18P2F.  Save on clothing, sports equipment, shoes, fan gear, and more. 

Amazon is currently accepting orders for the Acer Aspire One AOA150-1049. Features include: 1.6GHz Intel Atom processor, 1GB RAM, 160GB HD, XP Home, 6-Cell Battery, 1.3MP webcam, and 802.11b/g wireless ethernet.  Black case.  See website for additional details.

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For a limited time, Walmart is offering customers a free sample of Pamprin Multi-Symptom Tablets.  Pamprin Multi-Symptom offers more complete symptom relief for cramps, bloating, irritability, headache, and backache.  See website for complete details.  Expiration unknown.

As part of their promotion to celebrate the Zune’s compatibility with Audible’s download service, Audible is making Dean Koontz’ Black River available as a free download.  See website for complete details.  Expiration unknown.

Through the end of the year, o.b. Tampon is running a sweepstakes where you can enter to win a Toyota Prius.  During the sign-up process, you can opt-in to receive a free o.b. sample and a cute carrying case.  See website for complete details.  Available while supplies last.

There’s been a lot of debate and dissension over the proposed $700 billion bailout package.  It seems that the two main points of contention are around whether the bailout is needed and whether or not the US taxpayer should be left holding the bag.

NPR published a good segment last week that explains why the Fed is so concerned about the potential risks to the credit market (audio).  In a nutshell, the credit markets were (and are) at risk of freezing up; and when they do, it will be very difficult for businesses of all types to obtain the operating capital they need in order to remain in business.  The argument is that without the bailout, the overall economy is at risk of cratering; including the jobs that those businesses support.

But will the bailout work?  If history is any indication, then it’s possible that the plan will not only work, but will end up costing taxpayers well less than $700 billion.  It turns out that Sweden went through a similiar banking crisis back in the 90’s; and the current bailout proposal shares a number of similarities with Sweden’s plan, including the acquisition of equity in any companies that are assisted.  Ultimately, Sweden’s economy recovered; and they were able to realize a return on the assets they acquired.  They estimate that the final cost was close to nothing, or up to half the original cost, depending upon how the rate of return is calculated.

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• Circuit City: Overlord Video Game (PC) for just $4.99
• Amazon: Collegiate Fleece Hoodies as Low as $10.14
• Sears: Craftsman 40 pc. Drill & Drive Set 64340 $24.99
• Office Depot: Gateway M-6827 15.4in Notebook for just $499.99
• Buy.com: Next Generation ATH-AAA Remote Control Extender $33.99

Circuit City currently has Big Beach Sports on sale for just $19.99 after $20 savings.  From the description: Let's play on the beach! Big Beach Sports brings all the fun under the sun to your living room. Whether you want to compete in tournament and go head-to-head with family and friends, here is your chance to bat, spike, fling and shoot your way in volleyball, cricket, soccer, disc golf, football and bocce.  Expiration unknown.

Circuit City has Overlord on sale for just $4.99.  From the description:  Controlling a mysterious figure that has inherited the legacy of the evil, long-dead Overlord, the player emerges, near death, from the ruins of the old Overlord’s Dark Tower. Only the player’s actions will determine if they will rise to become the new all-powerful Overlord; it’s all down to how bad they want to be in order to succeed...evil or really evil! Played out with plenty of black humour and dark irony, the game will immerse players in twisted parodies of classic fantasy scenarios and characters.  Free shipping on orders over $24.  Expiration unknown.

Amazon has a selection of Collegiate Fleece Hoodies priced as low as $10.14.  Choose from well-known schools such as: The University of Texas, Georgia Tech, Florida State, Texas Tech, and more.  Expiration unknown.  Eligible for Free Super Saver Shipping.

Sears has the Craftsman 40 pc. Drill & Drive Set for just $24.99 after $25 savings.  Set includes: 2-in-1 connector, seven titanium hex shank drill bits (1/16 in., 5/64 in., 3/32 in., 7/64 in., 1/8 in., 5/32 in., 3/16 in.), three magnetic nut drivers (1/4 in., 5/16 in., 3/8 in.), two hex-to-square adapters (1/4 in., 3/8 in.), compact screw guide, eighteen assorted 1 in. insert bits, two assorted 2 in. power insert bits, compact drill/drive body, #8 x 7/64 in. countersink insert and two #8 x 7/64 in. replacement drill bits, two set screws. Also includes case. Expires September 28th.

Office Depot has the Gateway M-6827 15.4in Widescreen Notebook with Intel Core 2 Duo T5740 Process for just $499.99 after $100 instant savings and $100 mail-in savings.  Features: 15.4in-diagonal widescreen WXGA (1280 x 800) UltraBright LCD screen; Intel Core 2 Duo processor T5750 operating at 2.0GHz; 3GB of PC2-5300 DDR2 SDRAM memory; 160GB 5400-rpm Serial ATA (SATA) hard drive; Multiformat DVD drive with Double Layer support (reads/writes DVD±R/RW, DVD-RAM, DVD±R Double Layer, CD-R/RW); supports disc labeling on Labelflash media; Integrated 1.3-megapixel webcam, for live video chat and still photos; 5-in-1 memory card reader: reads SD, MMC, xD, Memory Stick, Memory Stick Pro

Buy.com has the Next Generation ATH-AAA Remote Control Extender for just $33.99 with Free Shipping.  This device converts infrared signals from remote controls into a long-range RF radio signal by simply installing the battery transmitter. Controls components up to 100 ft away. 

The Motley Fool recently published an article entitled Why Would Warren Buffett Stoop So Low? which points out a potential conflict of interest between Buffett’s recent five billion dollar investment in Goldman Sachs and his recent comments in support of the bailout package.  As the Fool rightly points out:

“By reserving public comment until after he stood to benefit from it, Buffett looks less like an advocate of reason and more like someone out to make a quick buck.”

If this were the first time that such a conflict had occurred, I might see fit to give him the benefit of the doubt, but it isn’t.

Earlier this year, Buffett started the Berkshire Hathaway Assurance Corporation (BHAC) as a provider of municipal bond insurance.  Shortly after starting the company, Moody’s gave BHAC its highest rating.  And it turns out that Berkshire Hathaway owns a good chunk of Moody’s stock, as it represents about 3.6% of Bershire’s holdings.

So here we see a rating company that’s effectively giving one of its largest investors a gold star.  Seems like a clear conflict of interest to me.

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• Buy.com: Refurbed Sandisk Sansa e260 4GB MP3 Player $39.99
• Family Video: Pre-Order Journey to the Center of the Earth (Blu-ray) for just $9.99
• Newegg: Hitachi Deskstar 500GB SATA HD HDP725050GLA360 $49.99
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• Shutterfly: 50 Free Photo Prints With Sign-Up
• Del Monte: Up to $35 in Savings With Their Just One More Promotion

For a limited time, HP is offering $400 off desktops priced $999 or higher when you use coupon code DT4523.  Code valid until used 900 times.  Shop early for the best opportunity to use it.  See website for complete details.

For a limited time, Buy.com has refurbished Sandisk Sansa e260 4GB MP3 Players for just $39.99.  Features 4GB of RAM, FM tuner, FM on-the-fly recording, built-in microphone, video, and expandable memory.  See website for complete details.  Expiration unknown.

For a limited time, Family video is accepting pre-orders for the movie Journey to the Center of the Earth in Blu-ray format for just $9.99.  This 2008 movie update of Jules Verne's classic sci-fi/fantasy novel uses the 1864 tale as a template, with its hero, scientist Trevor Anderson (Brendan Fraser), referring to his missing brother's notes on the novel. His nephew Sean (Josh Hutcherson) in tow, Anderson travels to Iceland to investigate his sibling's theories, enlisting a fellow scientist's daughter, Hannah (Anita Briem), as a guide. Soon the trio's Icelandic mountain trek descends into a cave and, then deeper still to, naturally, the center of the earth, where dinosaurs and other strange prehistoric creatures still dwell. After many dangerous encounters with the native flora and fauna, Trevor, Sean, and Hannah must find a way back to the surface or face being stranded miles below the earth's crust.

For a limited time, Newegg has the Hitachi Deskstar P7K500 500GB 7200 RPM 16MB Cache HD for just $49.99 after rebate.  Includes free 3 Business Day Shipping.  Rebate for is available here.  Rebate good through 9/30/2008.  See website for complete details.

For a limited time, receive a free massage chair (retail value $399.99) with the purchase of a qualifying television.  The Panasonic 50in 720p flat-panel display is currently on sale for $997.99 (price shown when you add to cart).  Expiration unknown.  See promotion for complete details.