.The Investment That Destroyed the SP 500
The Investment That Destroyed the S&P 500
Notes From The Field By Simon Black January 21, 2020 Bahia Beach, Puerto Rico
You’ll be surprised to see what investment has destroyed the S&P 500
The year was 1990, and the Soviet Union was on the verge of collapse. The Berlin Wall was still in the process of being destroyed, and East and West Germany were set to reunify later in the year.
Nelson Mandela was released from prison in February, and the South African government began talks to end Apartheid soon after.
Iraqi dictator Saddam Hussein invaded Kuwait in August.
The Investment That Destroyed the S&P 500
Notes From The Field By Simon Black January 21, 2020 Bahia Beach, Puerto Rico
You’ll be surprised to see what investment has destroyed the S&P 500
The year was 1990, and the Soviet Union was on the verge of collapse. The Berlin Wall was still in the process of being destroyed, and East and West Germany were set to reunify later in the year.
Nelson Mandela was released from prison in February, and the South African government began talks to end Apartheid soon after.
Iraqi dictator Saddam Hussein invaded Kuwait in August.
Ghost, Home Alone, and Pretty Woman were the top movies of the year. Janet Jackson’s Rhythm Nation was the top-selling album.
And the S&P 500 reached an all-time high of 360.65 in May.
It’s hard to even imagine that number anymore; the S&P 500 just closed last week at an all-time high of 3316, more than nine times higher than its peak in 1990.
And that’s impressive growth, no doubt. Investors who have had the discipline to buy and hold over the past three decades have been rewarded.
This is, of course, the most common investment advice doled out by money experts and best-selling financial authors. They tell people to invest in an S&P 500 index fund, and to basically keep it there for decades.
The experts insist there will always be strong years and weak years, but the overall long-term track record is pretty good.
And this is true to a degree. But let’s go back 20 years to early 2000, when the S&P 500 was at roughly 1500.
If you had bought then and held until now, that works out to be an average annual return of just 4%.
4% is better than zero… but it’s hardly anything to write home about.
To continue reading, please go to the original article here:
.How To Never Worry About Money Again
.How To Never Worry About Money Again
The No-Sweat Way to Protect Yourself From Financial Disaster
By laura goldstein
Building a bigger rainy-day fund may feel daunting. Start by breaking it down into manageable chunks.
That nagging feeling that a bit of bad luck—a medical emergency or a layoff—could derail your finances is widely shared. A new survey from the American Psychological Association found that 54% of people rated paying for unexpected expenses a very or somewhat significant source of stress.
And people across the income spectrum tend to be underprepared. A Pew Charitable Trusts analysis finds middle-income households typically have the equivalent of 20 days of income to tap, and even high earners have just 52 days. Building a bigger rainy-day fund may feel like a daunting task, given all your expenses and savings goals, but you can start by breaking it down into manageable chunks.
How To Never Worry About Money Again
The No-Sweat Way to Protect Yourself From Financial Disaster
By laura goldstein
Building a bigger rainy-day fund may feel daunting. Start by breaking it down into manageable chunks.
That nagging feeling that a bit of bad luck—a medical emergency or a layoff—could derail your finances is widely shared. A new survey from the American Psychological Association found that 54% of people rated paying for unexpected expenses a very or somewhat significant source of stress.
And people across the income spectrum tend to be underprepared. A Pew Charitable Trusts analysis finds middle-income households typically have the equivalent of 20 days of income to tap, and even high earners have just 52 days. Building a bigger rainy-day fund may feel like a daunting task, given all your expenses and savings goals, but you can start by breaking it down into manageable chunks.
Do It One Essential Expense at a Time
Aim to cover three months of one regular bill, like your mortgage, suggests RBC Wealth Management financial adviser Darla Kashian. Then move on to three months of utilities, then car payments, and so on.
This approach gives you the satisfaction of crossing one more potential problem off your list. Once you’ve hit three months of all essentials, make your new goal doubling your account to get to six months.
Why so long? “When things get rough, your emergency fund enables you to make good choices, where you don’t have to rush into a job you don’t want or dip into a credit card,” says Certified Financial Planner Board consumer advocate Eleanor Blayney.
To continue reading, please go to the original article here:
http://money.com/money/collection-post/3938823/save-money-emergency-fund/
.Unexpected Habits Of A Frugal Millionaire
.Unexpected Habits Of A Frugal Millionaire
April 8, 2019 jeff@debtfreedr.com
When you hear about someone being a millionaire, you typically don’t picture them as being frugal. The phrase, “Frugal millionaire” is not something that typically goes together such as a peanut butter and jelly sandwich does.
But, if you’ve read books such as “The Millionaire Next Door” and Chris Hogan’s new book, “Everyday Millionaires,” you’d have a different outlook on how millionaires actually live.
Occasionally, when someone hears that a person is frugal, they automatically think that they’re cheap. Being frugal and cheap are two different things.
So, before we discuss the habits of a frugal millionaire, let’s look at the difference of being frugal versus cheap.
What Is Frugal Living?
Frugal living is simply being intentional with your money. It’s mainly practiced by those who aim to:
cut expenses
have more money
get the most they possibly can from their money
Unexpected Habits Of A Frugal Millionaire
April 8, 2019 jeff@debtfreedr.com
When you hear about someone being a millionaire, you typically don’t picture them as being frugal. The phrase, “Frugal millionaire” is not something that typically goes together such as a peanut butter and jelly sandwich does.
But, if you’ve read books such as “The Millionaire Next Door” and Chris Hogan’s new book, “Everyday Millionaires,” you’d have a different outlook on how millionaires actually live.
Occasionally, when someone hears that a person is frugal, they automatically think that they’re cheap. Being frugal and cheap are two different things.
So, before we discuss the habits of a frugal millionaire, let’s look at the difference of being frugal versus cheap.
What Is Frugal Living?
Frugal living is simply being intentional with your money. It’s mainly practiced by those who aim to:
cut expenses
have more money
get the most they possibly can from their money
Frugal people understand that paying more doesn’t necessarily mean better value. Again, just because someone is frugal, doesn’t mean they’re cheap.
Are Frugal People Cheap?
I know cheap people and I can tell you firsthand that they’re NOT fun to be around. Cheap people think that EVERYTHING is overpriced.
The bottom line is that these are people who don’t like to spend money. They complain to everybody about how much stuff costs.
Unfortunately, many cheap people I know also lack honesty and moral principles.
The reason I wanted to differentiate between being frugal and cheap is that the majority of research on millionaires concludes that they’re frugal. They put people above money and are known to give to worthy causes.
If you’re not yet a millionaire (keep reading the DFD posts and you’ll soon be one!) and want to know just how many exist out there, let’s move on to some stats…
Millionaire Statistics
Here’s a few millionaire stats you may not know about from millionairefoundry.com:
There are 42.2 million millionaires worldwide, up 2.3 million over the last 12 months.
To continue reading, please go to the original article here:
.The Ten Commandments Of Personal Finance
.The Ten Commandments Of Personal Finance
From The Retirement Manifesto
By fritz@theretirementmanifesto.com
Is it possible that there are some basic principles upon which your personal finance journey should be built? It turns out there are. I’ll warn you in advance – you may not like some of them.
Just as THE Ten Commandments guide us away from our personal nature which is sometimes tempted to do things which seem fun at the time, but lead to long term harm, these “Personal Finance Commandments” can guide you away from doing things which will bring harm to your long term financial goals.
In full transparency, I didn’t come up with the original list. That honor goes to this article from MoneyStepper, which I just read tonight. I liked the concept and the guidelines presented so much, I’ve decided to build on the original article with original thoughts of my own, including the “10 Commandments” title.
The Ten Commandments Of Personal Finance
From The Retirement Manifesto
By fritz@theretirementmanifesto.com
Is it possible that there are some basic principles upon which your personal finance journey should be built? It turns out there are. I’ll warn you in advance – you may not like some of them.
Just as THE Ten Commandments guide us away from our personal nature which is sometimes tempted to do things which seem fun at the time, but lead to long term harm, these “Personal Finance Commandments” can guide you away from doing things which will bring harm to your long term financial goals.
In full transparency, I didn’t come up with the original list. That honor goes to this article from MoneyStepper, which I just read tonight. I liked the concept and the guidelines presented so much, I’ve decided to build on the original article with original thoughts of my own, including the “10 Commandments” title.
In my quest to “Help People Achieve A Great Retirement”, I think there’s a lot of room to share some of the best concepts I come across in my heavy reading on personal finance topics. This one’s a good one, and worth my effort to build upon the concept.
Strive to achieve as many of these commandments as you can, and you’ll be well on your way toward financial independence. Break them, and suffer the consequences.
The 10 Commandments Of Personal Finance
I. Keep Your Housing Costs Under 25% of Your Net Income
Personally, I like these “rule of thumb” guidelines to help you decide how much of something you can afford. When you’re shopping with a realtor, or talking to a banker, they often attempt to “stretch” you to a ratio that’s higher than you should really undertake. So, look at your last paycheck.
How much went into your bank account? If you rent, your rent should be less than 25% of your monthly NET pay (after taxes). Ditto on your mortgage payment. If you’re spending more than the 25% “commandment”, consider downsizing, or seek out a job with higher pay.
II. Keep Your Mortgage Under 2.5 Times Your Annual Salary
Interesting that the first two “Commandments” focus on housing costs. Appropriate, given the cost of the roof over your head is the highest expense you’ll incur in your personal finance journey. Manage it carefully, and don’t buy “too much” home. If you’re making $50,000/year, your home should be worth $125k or less.
III. Don’t Buy A New Car Unless You’re A Millionaire
I LOVE this one. Bottom line: buying a new car is stupid (yes, I said Stupid!). It depreciates immediately, and it’s expensive. It’s one of the worst personal finance decisions you can make. Don’t “Buy New”!
After a few months, it’s “just a car”. Within a few years, if you’re like most people, you’re “itching” for another one. AVOID the materialism – focus on the function. My wife and I have bought used cars for years, and paid cash for all but our first one.
We bought her last car new (a 2012 Hyundai Sonata for $25k), but I’ve told her she can’t sell it until it has over 200,000 miles on it. Oh the fun we have on this topic. Yes, this one is a HOT button for me.
Don’t let Madison Avenue talk you into a mistake. Here’s a challenge for you, which I’ve accomplished with several of my cars:
“$1,000 PER YEAR”
Depreciation, that is. Make it a personal goal. Think on it. If you buy a $20,000 car and sell it in 3 years, you’d have to sell it for $17,000 to achieve this goal.
It can be done, I’ve done it twice (most recently with my 2002 Miata, which I bought for $12,000, and sold it 6 years later for $7,000). It’s really, really hard, but it helps you keep your car expense where it should be – MINIMIZED!
IV. Maintain A Savings Rate of 20% or More
To continue reading, please go to the original article here:
http://www.theretirementmanifesto.com/the-ten-commandments-of-personal-finance/
.Money Lessons You Must Teach Your Children and Grandchildren
.Money Lessons You Must Teach Your Children and Grandchildren
Kentin Waits • May 30, 2018
If you know and love a young person, pass on these life-changing lessons that can put anyone on the road to prosperity.
Money Lessons You Must Teach Your Children and Grandchildren
Around the nation, young people are graduating from high school and college and preparing to take charge of their financial lives.
If you listen closely, you can hear wallets groaning from coast to coast.
Money Lessons You Must Teach Your Children and Grandchildren
Kentin Waits
If you know and love a young person, pass on these life-changing lessons that can put anyone on the road to prosperity.
Money Lessons You Must Teach Your Children and Grandchildren
Around the nation, young people are graduating from high school and college and preparing to take charge of their financial lives.
If you listen closely, you can hear wallets groaning from coast to coast.
This is not another rant against millennials and other whippersnappers. Americans of all ages are hopelessly behind the curve when it comes to handling their money responsibly. Unless they have astute parents — or a natural interest in personal finance — young people are at a high risk of making financial mistakes that lead to chronic debt.
Money Talks News is all about providing the financial education lacking in too many schools and families. So, pass on the following 8 lessons to a young person in your life — or read these tips yourself if you’re fortunate enough to be a young adult just starting out on your own.
1. Debt is a form of slavery
In the first quarter of 2018, household debt reached a record $13.21 trillion, according to the Federal Reserve Bank of New York. Household debt is now 18 percent higher than it was in the second quarter of 2013.
Imagine how all that debt might impact the life of the average debtor. What will happen if there is a job loss or an illness that health insurance does not cover? How much stress would you feel in that situation?
Debt, especially unsecured consumer debt, is a form of slavery. The debtor is beholden to the creditor because each day that the debt remains unpaid, interest charges pile up. Over time, it’s easy to see how the unchecked use of credit can erode wealth and foreclose opportunities.
If you already have fallen into debt, it’s not too late to climb out. Check out “Resolutions 2018: Crush Your Debt in 3 Simple Steps.”
2. Financially successful people live below their means
Financial success is usually the result of years of self-control, and a big part of that discipline involves living within or below your means. If every dollar that comes into your life has to go out, there’s little hope for getting ahead.
Work to keep your overhead lower than your income, pocket the difference and don’t let every bump in income mean a boost in lifestyle.
3. Pay yourself first
Learning to pay yourself first is an important part of financial security. Direct a healthy portion of your income into an IRA, a 401(k) plan or a savings account before your paycheck even hits your account. Otherwise, you’ll have to constantly fight the temptation to spend every dollar.
When you automate your savings and make that an unwavering part of your routine, it puts the twin forces of time and compounding interest on your side.
To continue reading, please go to the original article here:
.10 Types of Friends Who Are Costing You Money
10 Types of Friends Who Are Costing You Money
By Tim Lemke
Our friends are some of the most important people in our lives. But have you ever considered the impact they have on your finances?
Some friends can suck money from your wallet, even if they don't intend to. And because they're your friends, you may not even notice.
Consider whether yours fall into any of these categories of friends that cost you money.
10 Types of Friends Who Are Costing You Money
By Tim Lemke
Our friends are some of the most important people in our lives. But have you ever considered the impact they have on your finances?
Some friends can suck money from your wallet, even if they don't intend to. And because they're your friends, you may not even notice.
Consider whether yours fall into any of these categories of friends that cost you money.
1. The Leech
He's more than just cheap. He's a moocher. He's always asking to borrow money. He raids your fridge, and if you go out to eat, he always insists on paying just half the check — even if he ordered more.
He wants you to spot him his share of the monthly rent and promises to pay you back — but you know he won't. He'll even "borrow" books and DVDs that you'll never see again. You need to draw a hard line on what you'll do for this friend. Otherwise, you'll both end up suffering financially.
2. The Big Spender
If you go to a baseball game together, they insist on getting tickets behind home plate instead of in the bleachers. When you suggest a weekend of camping, they push for a week of skiing in Aspen. Perhaps this friend is wealthy and has a good chunk of disposable income.
Or, perhaps they just love to spend and hate to save. Either way, keeping up with their lifestyle is making you go broke. You like this friend because you enjoy his or her company, but you must politely find a way to spend time with them on more frugal terms.
3. The Bad Association
He's always getting in trouble, and you're often dragged in his wake. He's the guy who shows up with weed at parties, or gets into fights at clubs. You can try your best to be on the straight and narrow, but just being around him can put you at risk for legal trouble.
And even if your criminal record stays clean, your social media profile might not. Think you're due for a raise at work? You better hope the boss doesn't see the drunken Instagram pic your friend tagged you in.
4. The Awful Entrepreneur
She always has a new idea for something that will change the world, and all she needs is some money to get it off the ground. Maybe it's a new mobile app to help you brush your teeth, or a new restaurant specializing in gourmet scrambled eggs.
You admire her entrepreneurial spirit, but the truth is that she has neither the business sense nor the dedication to get rich from any of these schemes. It may be tempting to lend money to friends for their business ventures, but don't let your friendship skew your assessment of whether the investment makes good financial sense.
To continue reading, please go to the original article here:
http://www.wisebread.com/10-types-of-friends-who-are-costing-you-money?ref=seealso
.5 Friend Types That Can Hurt Your Finances
5 Friend Types That Can Hurt Your Finances
By Aja McClanahan
Your inner circle of friends can have a direct impact on many areas of your life, including your financial behavior. According to a 2014 study from the Journal of Consumer Research, peers can influence you to make certain decisions.
You can even bond with someone over decisions to abstain or indulge in certain activities. The study found, for instance, that friends bond over small shared indulgences like eating chocolate, but were more inclined to abstain as the stakes were raised.
5 Friend Types That Can Hurt Your Finances
By Aja McClanahan
Your inner circle of friends can have a direct impact on many areas of your life, including your financial behavior. According to a 2014 study from the Journal of Consumer Research, peers can influence you to make certain decisions.
You can even bond with someone over decisions to abstain or indulge in certain activities. The study found, for instance, that friends bond over small shared indulgences like eating chocolate, but were more inclined to abstain as the stakes were raised.
Because of this, you want to be especially aware of how your friends might be influencing your financial behaviors. You don't necessarily have to dump friends who negatively affect your spending, you just have to know how to handle your interactions so they don't cause you to make poor money decisions.
If you think it's time to take stock of your friend circle for the sake of your wallet, here are some personalities to watch out for.
1. The risk-taker friend
This person takes a lot of risks when it comes to their money. They aren't necessarily careless, they just tend to leap without looking. Sometimes they win and sometimes they lose. If you're not careful, these seasoned risk takers can take you along for a ride you're not ready for.
The excessive risk-taker tends to be impulsive, and seeing them win can influence you to make similar choices. This friend may encourage you to make major decisions without properly weighing all the risks involved.
How to handle them
Take their "bright ideas" with a grain of salt, but don't shun everything they conceive. They can be good business partners when tempered with caution. Sometimes, you won't be able to talk them out of anything, but you can definitely leverage their passion for risk taking if you find yourself being too conservative for your money goals.
2. The spendthrift friend
This friend spends every single penny that comes into their hands. They take expensive trips, show up at exclusive parties, and seem to be forever shopping and eating at fancy restaurants. In fact, whenever you two hang out it involves spending obscene amounts of money.
The spendthrift is not always broke. They may actually have the money to support this lifestyle; you, however, do not. One minute with the spendthrift and you could easily find yourself swept away by the sheer excitement of spending more money than you can afford.
How to handle them
In some ways, they could actually help you live a little. Just make sure to manage your interactions so that you don't end up in the red. If your friend suggests an outing that could cost more than you've budgeted for, suggest a more reasonable alternative. This way, you get quality time with your bff without the collateral damage to your wallet.
3. The doom and gloom friend
This friend is also known as the conspiracy theory or financially "woke" friend. They always predict that the financial world as we know it will come to a terrible end. Their portfolio consists mainly of assets in precious metals, canned goods, and their homemade bomb shelter. This friend won't save or invest for tomorrow because it might not come, or will be dystopian at best.
At times, they may tempt you to believe that the sky is falling and that you should do something about it. The problem is that many of their "solutions" involve ignoring sound, practical principles for the sake of events that are unlikely to happen.
How to handle them
To continue reading, please go to the original article here:
http://www.wisebread.com/5-friend-types-that-can-hurt-your-finances?ref=seealso
.How to Get Through Tough Times When You Are in Despair
.How to Get Through Tough Times When You Are in Despair
From Lifehack By Daniel Matthews, CPRP November 5, 2018
A Certified Psychosocial Rehabilitation Practitioner with an extensive background working with clients on community-based rehabilitation. Read full profile
Suddenly, a class 5 hurricane comes out of nowhere and literally wrecks your life; you discover your health is failing; your best friend commits suicide. These aren’t scenarios from a TV show or movie — they’re tough times that many people face all over the world, and even if you’re not dealing with something so major, you’re still in a state of utter despair.
Step back for a second. You’re still able to read this, or you have someone reading it to you. To realize the fact of your existence and what that realization means right now is part of the journey not just to recovery, but to bliss.
How to Get Through Tough Times When You Are in Despair
From Lifehack By Daniel Matthews, CPRP November 5, 2018
A Certified Psychosocial Rehabilitation Practitioner with an extensive background working with clients on community-based rehabilitation. Read full profile
Suddenly, a class 5 hurricane comes out of nowhere and literally wrecks your life; you discover your health is failing; your best friend commits suicide. These aren’t scenarios from a TV show or movie — they’re tough times that many people face all over the world, and even if you’re not dealing with something so major, you’re still in a state of utter despair.
Step back for a second. You’re still able to read this, or you have someone reading it to you. To realize the fact of your existence and what that realization means right now is part of the journey not just to recovery, but to bliss.
When you’re in a state of bliss, what does that look like? Where are you, is there anyone with you, are you relaxed, is there an incredible scent hanging in the air?
Even if the advice I’m about to give you doesn’t put you in a state of bliss, it will help you get closer to a place where bliss is possible.
Below, you’ll discover the initial steps towards recovery — those first essential actions you must take to recover from being in a state of despair. Next, you’ll get tips on maintaining psychological stability once there’s some distance between yourself and whatever is causing you to despair. Finally, you’ll grasp a philosophical standpoint that will help you help others when they are in a state of despair like yours.
Ready to get through this tough moment in your life and emerge a better person? Let’s do this.
1. You Are Not Alone — Cry out for Help
First, know this: Isolation is dangerous while you’re in despair.
If you break down and do something you can’t take back, there’s a good chance no one is helping you think differently.
Some 70 percent of people who commit suicide are not undergoing mental health treatment, and suicide rates for people between the ages of 34 and 65 have increased by 33 percent since the year 2000.[1] If those individuals who killed themselves had been able to get treatment, it could have saved their lives.
Find a counselor. If you don’t have health insurance and it’s going to cost too much, search for free counseling options in your community. Try the SAMHSA Treatment Referral Helpline, 1-877-SAMHSA7 (1-877-726-4727), if you’re at a loss.
Or call a family member or friend if you simply need someone to talk to. Even if you can’t completely unburden yourself, talking to someone is better than the alternative of carrying such a heavy burden.
A caveat: Do not try to substitute your friends and family for an actual therapist. It’s unhealthy for both you and them, because there’s too much emotional attachment.
In short, you’ll be burdening them too much, and they may give you biased advice. A counselor will give you objective advice that can help immensely.
2. Search Yourself and Be Honest About Absolutely Everything
Now that you’ve identified someone to talk to, it’s time to take these important steps:
Take a look at your life and ask whether there are any ongoing physical, external issues in your environment making things worse.
Examine your diet and lifestyle for factors affecting your wellness (more on this soon).
Examine your thoughts and look for the types of thoughts, or the very specific thoughts, that are causing you to despair.
At this point, it will help to go to the doctor and get a physical exam. Find out where you’re at biologically. Maybe you’re not getting enough vitamins or nutrients, or you’re getting too much of something. You may not be getting enough exercise. Be honest with the doctor.
To continue reading, please go to the original article here:
.Is Your Bank Actually Safe
.Is Your Bank Actually Safe
Notes From The Field By Simon Black
Here’s an easy way to tell if Your Bank Is Actually Safe
March 15, 2013 was a pretty normal day in Cyprus. It was a Friday, and most people were looking forward to a relaxing weekend.
The next morning the entire nation woke up in horror. Their politicians had been up all night, negotiating with international lenders to provide an emergency loan to the country, and its banks.
It turned out that the banks in Cyprus were all insolvent; just like banks in the United States during the 2008 sub-prime crisis, banks in Cyprus had been making idiotic decisions with their customers’ hard-earned savings.
Is Your Bank Actually Safe
Notes From The Field By Simon Black
Here’s an easy way to tell if Your Bank Is Actually Safe
March 15, 2013 was a pretty normal day in Cyprus. It was a Friday, and most people were looking forward to a relaxing weekend.
The next morning the entire nation woke up in horror. Their politicians had been up all night, negotiating with international lenders to provide an emergency loan to the country, and its banks.
It turned out that the banks in Cyprus were all insolvent; just like banks in the United States during the 2008 sub-prime crisis, banks in Cyprus had been making idiotic decisions with their customers’ hard-earned savings.
And by 2013, the banks’ losses were too great to ignore.
Unfortunately for depositors, the government of Cyprus was also broke, and they were unable to bail out the banks.
So they came up with a new idea. Instead of a bail-out, they had a bail-IN.
First, they closed all the banks. ATM machines quickly ran dry and ceased functioning altogether. Then they just started confiscating deposits. They called it a ‘tax’, but it was theft, plain and simple.
The government just came in and grabbed money from people’s bank accounts... then gave it right back to the banks to bail them out.
It was an incredibly important lesson about banking: most people simply assume that their bank is in good financial condition… that, since the bank is regulated and insured by the government, our money must be safe.
Sometimes that’s an incredibly dangerous assumption to make.
Even in the US, we’ve seen how quickly banks’ idiotic decisions can unravel. Back in September 2008, the entire US financial system came crashing down, practically overnight, just like in Cyprus.
A big part of the reason is that banks have very little incentive to act conservatively and responsibly with your money.
Think about it-- you walk into a bank and hand them your paycheck, and in exchange they offer you a ‘free checking account’.
Really? Free? If it’s free, then how does the bank pay for all of those fancy buildings and huge bonuses?
Simple. By taking RISKS with your money. They make loans and other investments-- bonds, auto loans, home mortgages, etc. And each of those carries some kind of risk.
To pretend otherwise is foolish. There’s risk in everything you can possibly do with money… whether buying a government bond, stuffing cash under your mattress, or owning Apple stock. There’s always risk.
And they take these risks with upwards of 97% of their deposits.
Current US banking regulations, in fact, require as little as ZERO PERCENT of customer deposits to be held on reserve, meaning almost all of your money can be gambled away on whatever investment fad makes the bank the most money.
And that’s the problem: the incentives are all wrong.
Banks make money by putting YOUR money at risk. But they don’t share the reward. They pay you some pitiful interest rate like 0.02%. And then keep all the rest for themselves.
To continue reading, please go to the original article here:
To your freedom & prosperity, Simon Black, Founder, SovereignMan.com
.How Should You Pay for Financial Advice?
.How Should You Pay for Financial Advice?
By Michael Pollock
From robo advisers to full-service professionals, investors have more choices than ever in getting, and paying for, financial advice
Deciding what kind of financial advice to pay for, and which fee structure is right for you, can be daunting.
The advice market is evolving rapidly, and investors today have more choices than ever before—from expensive, highly tailored advice to more impersonal services that cost next to nothing.
Financial experts say investors should shop carefully, while considering these questions: Do you have a complex financial life, where paying a premium for advice could produce lasting benefits? Or are your needs more basic—such as crafting a starter financial plan—where fees could be much lower?
How Should You Pay for Financial Advice?
By Michael Pollock
From robo advisers to full-service professionals, investors have more choices than ever in getting, and paying for, financial advice
Deciding what kind of financial advice to pay for, and which fee structure is right for you, can be daunting.
The advice market is evolving rapidly, and investors today have more choices than ever before—from expensive, highly tailored advice to more impersonal services that cost next to nothing.
Financial experts say investors should shop carefully, while considering these questions: Do you have a complex financial life, where paying a premium for advice could produce lasting benefits? Or are your needs more basic—such as crafting a starter financial plan—where fees could be much lower?
The Wall Street Journal invited three people to discuss this issue: Terrance Odean, Rudd Family Foundation professor of finance at the University of California at Berkeley’s Haas School of Business; Micah Hauptman, a financial-services counsel at the Consumer Federation of America; and Antoinette Schoar, the Michael Koerner ’49 professor of entrepreneurial finance at the MIT Sloan School of Management. Edited excerpts follow.
Conflicts Of Interest
WSJ: How do investors pay for advice today?
MR. ODEAN: Traditionally you paid a broker commissions for buying and selling stocks. Many people now use fee-only advisers, who charge a percentage of assets under management, often with a scale.
It may be 1.25% a year on a portfolio with less than $1 million and lower if you have more assets than that.
MR. HAUPTMAN: Investors also can pay by the hour, or by engagement—where an adviser provides a complete financial plan for a fixed fee. Or people may pay a monthly retainer.
WSJ: Ís it always clear at the outset which fee model you are getting?
MR. HAUPTMAN: Many financial professionals market themselves as advisers, using titles like financial adviser or financial consultant. They may be dually registered as broker-dealers and investment advisers.
If you don’t know which you want, you might be directed toward their brokerage platform, in which case you would be paying for the transaction, not the advice.
WSJ: Mutual funds and ETFs contain embedded financial advice, though it isn’t tailored to the individual.
MS. SCHOAR: Funds in a sense do contain a form of advice in that they provide portfolios that have been preselected. But in itself, that is only a small step toward getting good advice.
Many individuals use index funds as passive investment strategies and pay advisers separately for add-on services such as tax advice and estate planning.
MR. ODEAN: With mutual funds, there’s sometimes a compensation structure where a fund company gives money to a broker. This can create a significant conflict of interest, because a fund might be charging a high management fee and paying a significant commission back to the adviser or broker who sold the fund.
WSJ: Is any one fee structure clearly in an investor’s best interests?
MR. HAUPTMAN: Every model can have conflicts of interest. Transaction-based professionals may provide quality advice, but their firms may set sales quotas or offer bonuses or other rewards that encourage them to put their own self-interest ahead of the client’s.
MR. ODEAN: The commission structure creates this incentive where brokers would like to see their clients trade more often. But one advantage is that if you are a buy-and-hold investor, you don’t incur the commissions very often.
To continue reading, please go to the original article here:
https://www.wsj.com/articles/how-should-you-pay-for-financial-advice-1489975201
.Dreaming About Money? What Does It Mean?
.Dreaming About Money? What Does It Mean?
Erinn Bucklan | April 11, 2019
Dreaming About Money? What Does It Mean?
Have you been dreaming about money lately? Us, too. Find out what it means when you dream about money.
Before you shake your head and say that dreams have no impact on your waking life, consider this: Scientists have found that they can actually affect our daytime behavior.
In research published in the journal Social Psychological and Personality Science, a team of U.S. and British researchers found a link between particular events in dreams and later real-world interactions with our significant others.
Dreaming About Money? What Does It Mean?
Erinn Bucklan | April 11, 2019
Dreaming About Money? What Does It Mean?
Have you been dreaming about money lately? Us, too. Find out what it means when you dream about money.
Before you shake your head and say that dreams have no impact on your waking life, consider this: Scientists have found that they can actually affect our daytime behavior.
In research published in the journal Social Psychological and Personality Science, a team of U.S. and British researchers found a link between particular events in dreams and later real-world interactions with our significant others.
Other past studies have also found that dreams can influence our actions and emotional state the next day. Certainly the father of all psychoanalysis would agree. “Dreams are the royal road to the unconscious,” Sigmund Freud said famously in the 19th century.
So what does it mean if you’re dreaming about money? In dreams, money can reflect everything from perceived power and energy to resourcefulness and even self-esteem, says Kelly Sullivan Walden, author of “It’s All In Your Dreams.”
We asked her and two other dream experts to analyze the five most common money-related dreams. Keep reading to see what these money dreams mean.
What Do These Money Dreams Mean?
You Dream About Winning Money
You Dream About Finding Money
You Dream About Losing Money
You Dream of Giving Money Away to Others
You Dream of Being Harassed by Bill Collectors
You Dream About Winning Money: What Does This Dream Mean?
Before you chalk it up to just wishful thinking, dream expert Anna-Karin Bjorklund, author of “Dream Guidance: Interpret Your Dreams and Create the Life You Desire!” suggests that the “winning” feeling could relate to other aspects of your life you have good feelings about, such as being lucky in love.
“This is when you have the power to attract what you really want in life. It may not literally mean a lottery payout, but rather you can expect to attract more positive energy and winning opportunities your way,” Bjorklund says.
She also recommends capitalizing on how you felt when you were asleep. “I call this a wish-fulfillment dream. Take advantage of this amazing feeling you had and bring this confidence with you into your daily life.”
You Dream About Finding Money: What Does This Dream Mean?
In your dream, you’re walking down the street and you find a $100 bill stuck to the bottom of your shoe. Or you try on an old coat you had stored for years in the attic and discover a wad of $20 bills in one of the pockets. Just because these scenarios happened in slumber and not real life, don’t despair.
To continue reading, please go to the original article here:
https://www.hermoney.com/save/what-do-your-money-dreams-mean/