Nov
11
Worry About Yourself First
November 11, 2008 | 1 Comment
When asked about their current economic condition, most people respond with something like "I'm fine but the guy down the street is really in trouble." I think it's time that to stop worrying about the people down the street and worry about your own problems.
If everyone in the country would just take care of their own business we wouldn't be in this mess. Government programs designed to …
Nov
5
Credit Card Rates Going Up
November 5, 2008 | Leave a Comment
… a surprise. You're credit card company is probably raising your APR (interest rate). What should you do?
Don't Carry a Balance
I use a credit card but don't care about the APR. How can that be? Am I too rich to care? No, I just pay my balance in full every month. You don't pay any finance charges if you pay your balance off every month.
Don't Use a Credit Card
Dave Ramsey advocates using a debit card and that's good advice if you've had problems with credit card …
Nov
4
Fire Your Financial Advisor
November 4, 2008 | 1 Comment
This week I finally got around to doing something I've wanted to do for a long time. I fired my "financial advisor." Here's why you should consider it.
History
I had some 401(k) roll over money and Roth IRA. I wanted to move them to the same place for convenience. A new "advisor" had taken over my Roth IRA account (I opened it with a friend and he quit the business). I didn't …
Oct
30
The Right Time To Save Money
October 30, 2008 | 3 Comments
So the economy has taken a down turn. You've decided you might need to start saving some money. Well, it's too late. You should have been saving five years ago. But there's hope.
There's a Chinese proverb about the best time to plant a tree.
The best time to plant a tree was twenty years ago.
The second best time, is today.
The right time to save money was the time you got your …
Comment by Trish: I found this article most excellent. I've also …
Oct
29
Securitization - Good Idea Gone Bad or What Just Happened
October 29, 2008 | 1 Comment
I used to work for a credit card/finance/mortgage company. I always wonders how they got around the capital requirements I learned about in Money and Banking class. Well know I finally understand the big picture. Most of the expansion in the last 20 years has been a result of securitization.
What the Heck is Securitization?
The government requires that every bank hold a certain amount of money in reserve in case their loans go bad. So for instance if you get …
Comment by Best Investments in a Depression - Wealthy Reader: … an investment is what got us into this mess. But paying …
Oct
27
Time to Buy Gold?
October 27, 2008 | Leave a Comment
With financial hysteria setting it, some might wonder if it's time to buy gold or other commodities. Gold has been marketed as a "store of value" in uncertain times. But is gold (or other commodities) a good investment?
The rumor is that many hedge funds are liquidating their holdings to raise cash. This liquidation is bringing down commodity prices. Gold prices have come down …
Oct
23
Magical Thinking
October 23, 2008 | 1 Comment
Do you blame your problems on somebody else? The sub-prime mess is either Clinton's, Bush's or Congress's fault depending on who you believe. Most of our problems are caused by magical thinking. Magical thinking is 1 + 1 = 3. Magical thinking says giving poor people houses is a good idea. You need to remove magical thinking from you thought process to succeed in this world.
The universe doesn't grant us a free pass. I've received …
Oct
22
Fed Chief Pushes for Another Stimulus Package
October 22, 2008 | 5 Comments
Ben Bernanke, Chairman of the Federal Reserve (the bank's bank) told Congress he supports another stimulus package. What does this mean for you?
In testimony before congress Bernanke said that he supported another stimulus package. President push also supported another stimulus package. However, Bush wants the new package to be "targeted, temporary and timely."
What is the Plan?
Right now the plan …
Oct
15
Why A Mortgage Increases Your Risk
October 15, 2008 | 1 Comment
Or rather, why does any debt increase risk? Take a look at Wall Street now. Debt (over leveraging) and randomness wiped out every independent investment bank on Wall Street. Those that didn't fail are probably going to get nationalized (thank you comrade Bush ).
The banks failed ultimately because they ran out of capital. They had too much debt and no one would lend them any more money for …
Comment by Jeff: "If/when you lose your job, how is your …
Oct
14
A House is a Consumer Good Part 2
October 14, 2008 | 2 Comments
I published an article about house as consumer goods over the weekend that was meant as a draft. So instead of fixing that post, I'll finish my thought in this post. Houses are consumer goods.
A house is not an investment. A house is a place to live.
Definition of Consumer Goods From Answers.com :
Goods bought for personal or household use, as distinguished from Capital Goods or …
Comment by Jeff: … only criticism is the lack of discussion about the value …