Articles filed under 'Personal Finance'
A good investor knows that most of investing is simple psyche 101, understanding people and what motivates them. That’s why the common advice, made popular by David Bach of the Finish Rich book series, of saving money on “little purchases such as lattes, fancy coffees, bottled water, fast food, cigarettes, magazines” makes me a tad bit crazy.
Little purchases? Find me a smoker that thinks cigarettes are a “little purchase.” Find me a coffee addict that thinks coffee is a “little purchase.”
Kimber made a post about why Mutual Funds Aren’t for Losers, which was a good article and I see her point of view, however, in this case, I thought I would show the other side of Mutual Funds, which, in my opinion, suck to the point where vacuums should be named after them, or maybe they could rename the Chicago Cubs the Chicago Mutual Funds.
A buddy quoted Robert Kiyosaki of Rich Dad fame to me a few days back, saying “Mutual Funds Are For Losers.”
(This same buddy invests in index funds which are technically mutual funds but that is an entire other post.)
Well, chock me up as a loser because I do hold mutual funds, both now and in the past.
Back when I was a financial young’un, I went to one of those free seminars hosted by a mutual fund company. Speaking there was a financial “guru” that I had admired for some time. I had read his books, watched his weekly tv show, and scanned his newspapers columns. I really thought he knew anything and everything about finances.
He was selling a can’t lose investment that supposedly not only provided a good return but saved the investor on taxes too.
What a great deal, right?
After reading Erin’s great post a few days ago and talking about it with one of my good friends, and after a conversation I had with my fiancee, the question came up, “When is enough, enough?”
Erin and Ken both quoted Trump and Rich Dad, Full of Shit Dad as saying you need to invest to win, how much do you really need? Do you need billions? Not really. Do you need Buffett or Gates money? No. If you got rich through frugality, like most people do I think, you aren’t really interested in those shiny new cars or mansions because you realize they are just a huge waste of money for show and aren’t really necessary.
Great conversation about Why the Poor Will Always Be With Us. I wanted to continue that by addressing some of the issues raised from the ’soap box’ I’ve been given. (wink)
The Naked Economist (and no ladies, he is not actually naked in the picture, disappointing I know) in his most recent Yahoo Finance Article made this comment:
The living wage: Wouldn’t it be great if everyone in America earned at least $12 to $15 an hour? I think it would be. The fact that America’s poverty rate still hovers in double-digits is a national disgrace. But requiring employers to pay double or triple the hourly wage they’re currently paying wouldn’t necessarily do any great favor to many of America’s working poor.
The context is about quick fixes. But I think there is a bigger problem that cannot be solved with higher wages or more a more bankable skill set.
The problem is lack of financial education. It doesn’t matter how much money you make if you do not know how to manage it well. I am financially free through investments as a stay at home single mom; conversely, there are extremely high paid people who live pay check to pay check or are drowning in debt.
The divide is getting greater between the haves and have-nots. And if you divided up all the money evenly among the masses, it would end up the same way. Some people know how to make and manage money, but most don’t.
Managing money is a life skill. Until people are more educated about how to make, manage and grow money, the poor will always be with us. The question is, will you be one of them?
Friday, Oct. 6, 2006
by Erin
Suze Orman’s latest Yahoo article titled The Parent Trap addresses the issues Boomers are facing with grown kids moving back in, as well as aging parents. I see another problem here, my own personal parent trap. Let me esplain…
My parents were crazy youngsters when hey had me, divorced when I was two, and then those crazy fools married again when I was in my late teens. Each had more children, and one parent even gained a whole other family. I have been on my own ever since.
It seems that even your credit card’s rewards points are not safe from the terror of inflation. This is a real credit card offer I got the other day (click for larger image):
Are we supposed to be fooled by this? I’ll let things sink in a bit before I do any speculating as to why this might be a good deal (for us or the bank).
Friday, Sep. 22, 2006
by Jason
I know my writing often sounds like I’m preaching for everybody to be value investors. That’s simply not true! I only feel that some people can be value investors due to the temperament and the time needed to perform analysis. So what do I tell the general public who couldn’t care less about reading financial statements, or sitting in front of the computer day-trading?
Mutual funds are still the no-brainer solution for the average joe. Much “marketing” debate has been made about management fees. They’re not wrong to be critical but everything is really dependent on the “net” returns you’re able to achieve. My only concern is that consumers do the minimum work of researching the track-record of the fund and the fund manager. A long, consistent and positive tracking record is a must for active-managed funds.
But when John Bogle, founder of Vanguard, decided to balk the norms of the financial industry and aggressively market passive index funds, it was a strong indictment on the vast majority of managers who fail to beat their corresponding benchmark indexes. Vanguard’s promotion of this strategy still trumpets strongly, but there are signs of shifting towards actively managing their index funds, even if it’s just a little bit!
