.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.

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

.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.

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:

https://www.sovereignman.com/offshore-bank-account/fbar/?utm_medium=email&utm_source=sm_notes&utm_campaign=notes&utm_content=20190415_high_taxes

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?

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.

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/

.Uncle Sam Just Used Its Financial Nuclear Weapon Again

Uncle Sam Just Used Its Financial Nuclear Weapon Again

Notes From The Field By Simon Black January 15, 2020  San Juan, Puerto Rico

In August of 1945, the United States became the only country to drop nuclear bombs on an enemy.

Hiroshima and Nagasaki were largely destroyed in the blink of an eye. And the Japanese had no choice but to surrender to the Allies, finally ending World War II.

Ever since, world superpowers have been rapidly advancing weapons technology, constantly raising the bar for destructive power.

It won’t surprise you to find out that the most powerful and destructive weapon in the world, though, by far, is claimed by the United States.

But this weapon has nothing to do with America’s nuclear arsenal. It doesn’t even require bullets.

I’m talking about the US dollar.

The US is still the world’s dominant superpower, still the largest economy in the world. And the US dollar is still the world’s dominant reserve currency.

This means that the VAST MAJORITY of international trade and cross-border financial transactions take place in US dollars.

When Saudi Arabia’s state-owned oil company sells petroleum to the Chinese, that transaction takes place in US dollars.

To continue reading, please go to the original article here:

https://www.sovereignman.com/trends/uncle-sam-just-used-its-financial-nuclear-weapon-again-27056/

.The Best Way to Manage Your Money Isn’t What You’ve Been Told

The Best Way to Manage Your Money Isn’t What You’ve Been Told

By Anne Gaviola  Jan 6 2020

Outdated advice on how to save, budget, and handle your finances doesn’t cut it anymore.

Financial advice should come with an expiry date. Because outdated guidance is like financial sabotage, according to money experts.

As written about in the Wall Street Journal last year, much of the financial advice young people have been given might actually be the opposite of what they’re supposed to be doing with their money.

Young people are delaying or foregoing life milestones like getting married, buying a home, and having kids, so advice that was fine for boomers doesn’t always make sense for the economy that millennials and Gen Z live in. Personal finance expert Robin Taub said precarious employment and changing values are why the old financial playbook needs a refresh.

“We have a sharing and a gig economy now—meaning there are a lot of people that don’t have full-time employment. A lot of freelancers and solopreneurs work for an app like Lyft or Foodora. There’s also been a shift in terms of people not feeling like they have to own things like a car or a house,” she said.

Here are seven pieces of money advice that your parents probably didn’t give you.

1) Set up saving so you don’t have to think about it

The old 50/30/20 budgeting advice suggested allotting half of what you make to essentials like rent and food, 30 percent for fun, and 20 percent savings for “a rainy day.” U.S. presidential candidate Elizabeth Warren famously used this formula in her 2006 book All Your Worth: The Ultimate Lifetime Plan, which she co-authored with her daughter. But nowadays, aiming to save 10 percent of your income is probably more realistic. And according to Taub, how you save that is really important.

To continue reading, please go to the original article here:

https://www.vice.com/en_us/article/m7qaxb/the-best-way-to-manage-your-money-isnt-what-youve-been-told

.How the 2010’s Taught Us to Hate the Rich

How the 2010’s Taught Us to Hate the Rich

By Matt Taylor, and Maxwell Strachan; illustrated by Hunter French  Nov 26 2019,

 From the gig economy to supervillains like Martin Shkreli to the college cheating scandal, this is the story of "late capitalism" coming to life.

In the past ten years, we lost hope in American politics, realized we were being watched on the internet, and finally broke the gender binary (kind of). So many of the beliefs we held to be true at the beginning of the decade have since been proven false—or at least, much more complicated than they once seemed.

The Decade of Disillusion is a series that tracks how the hell we got here.

If you squint hard enough, you could theoretically be optimistic about capitalism in America right now. Technically speaking, the U.S. economy is currently in the midst of the longest expansion in its history—a record that started when the country dragged itself out of the Great Recession and back into something resembling growth in 2009. Middle-class incomes have shown (at least fleeting) signs of life after decades of stagnation, too.

But if the first decade of the 21st century was defined by the rise and fall of what George W. Bush described as the American "ownership society,” the second saw that myth permanently disintegrate, replaced by the realities of economic precariousness. Even as stock markets started booming again, politics shifted leftward and socialists gained clout—and hackneyed terms like "late capitalism" gained followings.

Along the way, the very idea of what counts as money—what wealth looks like and how it's represented, what people aspire to earn and how popular figures flaunt it—shifted radically.

This is the era of memes about the horrors of student loan debt and temp gig labor, about young people subsisting on GoFundMe campaigns and Seamless coupons, about plowing all your savings into brand-new digital currencies.

If the economy's capacity to atomize workers and conjure up wealth were part of the story of our unraveling confidence in capitalism, this decade also saw a surge in awareness of pay disparities, discrimination, and scams. The Women's National Soccer Team. Theranos. Fyre Festival.

This was the time when the spectacular display of wealth reached its zenith, and also when society started to turn up its collective nose at the ugly truth.

End of 2011: U.S. Student Debt Tops $1 Trillion

In late 2011, as the Occupy Wall Street movement communicated millions of people’s frustrations with the economic policies of the last decade, the country quietly eclipsed a statistical marker that would help to define the next one: $1 trillion in student loan debt.

Over the following years, the amount of student debt accrued by Americans would continue to steadily rise as the nation came to grips with the true extent of a college-affordability crisis that disproportionately affected lower-income families and people of color.

By 2018, total student debt would reach $1.5 trillion, leading to calls by Democratic presidential candidates Bernie Sanders and Elizabeth Warren to eradicate most (if not all) of the debt that continues to hamper an entire generation.

For a huge percentage of the millennial generation, the debt they took on in hopes of obtaining decent-paying jobs also became the reason they stayed at home with their parents, put off having children, and lost hope that they’d ever own a home of their own.

July 2012: Uber Launches UberX, Mainstreaming the Gig Economy

In the middle of 2012, a three-year-old tech company called Uber announced a new version of its service: Uber X. Until then, Uber had only offered rides in fancy black Town Cars. But Uber X allowed regular people to sign up to pick up customers in their regular cars. Riders would pay less—35 percent less to be exact, according to then-CEO Travis Kalanick at the time.

To continue reading, please go to the original article here:

https://www.vice.com/en_us/article/ne8xpd/2010s-decade-money-wealth-debt

.12 Signs That The Economy Is Seriously Slowing Down As 2020 Begins

12 Signs That The Economy Is Seriously Slowing Down As 2020 Begins

By Michael Snyder January 12, 2020

 Lost in all of the headlines about Iran and impeachment is the fact that the U.S. economic slowdown which began during the latter stages of last year appears to be accelerating.

The final numbers which will tell us if we are officially in a recession at this moment won’t be released until months from now, but for millions upon millions of Americans it definitely feels like one has already started.

Yes, the stock market has been soaring, but at this point the stock market has become completely divorced from economic reality. And as you will see later in this article, stock prices are now the most overvalued that they have ever been in all of American history.

But before we get to that, let’s talk about what is happening in the real economy.

The following are 12 signs that the economy is seriously slowing down as 2020 begins…

 #1 The U.S. Manufacturing Purchasing Managers Index has been in contraction for 5 months in a row, and it is now at the lowest level we have seen since June 2009.

#2 Last month, manufacturing employment fell at the fastest pace we have seen since August 2009.

To continue reading, please go to the original article here:

http://themostimportantnews.com/archives/12-signs-that-the-economy-is-seriously-slowing-down-as-2020-begins

.People Who Take Precaution Seriously Are Well-Protected

People Who Take Precaution Seriously Are Well-Protected

Notes From The Field By Simon Black

January 13, 2020 Bahia Beach, Puerto Rico

Do You Have A Backup Generator?

The news headlines read, “Deadly 6.4 Magnitude Earthquake Plunges Puerto Rico into Darkness”; and “Powerful Puerto Rico Earthquake Knocks Out Entire Island’s Power.”

It was enough to prompt my mother to call, four times, to make sure I was OK.

There’s been a string of fairly strong earthquakes lately in Puerto Rico... which is incredibly unusual for this part of the world. It’s been more than a century since the island was rocked by anything of this magnitude.

But I explained to my parents that the press had blown things out of proportion as usual. They were running video footage that made it seem as if the island had been blasted back into the Stone Age.

It’s true that there were some displaced families and property damage near the epicenter.

But most of the island was not substantially affected. None of the major news organizations bothered to show footage of busy shopping malls, crowded restaurants, and packed movie theaters teeming with consumers.

It’s also true that the electrical grid went down: the island was without power for some time. Here in my community, the power came back on after 2 days. Some people had it on after a day, some after 3 or 4 days.

But here’s what people don’t realize-- the electricity problems in Puerto Rico have a lot less to do with the seismic activity, and a lot more to do with the island’s decade-long economic depression.

To continue reading, please go to the original article here:

https://www.sovereignman.com/trends/do-you-have-a-backup-generator-27052/

.Rich People Agree That Life Is Unfair

 Rich People Agree That Life Is Unfair

By Harry Cheadle  Jan 10 2020,

They are concerned about inequality, according to a new survey, but don't ask them to pay more in taxes.

Huge numbers of Americans understand that life in their country is fundamentally unfair. Even many of those in households making more than $500,000—the literal top 1 percent of earners—think that they are unfairly privileged in areas of life ranging from college admissions to housing, and believe the richest of the rich should pay more in taxes.

But when those high earners are asked if the merely rich, i.e. them, should have to chip in more, they balk. Oh, reducing inequality and making the world nicer means that I, personally, might have less stuff? No thank you.

That's one of the takeaways of a new report from NPR, the Harvard T.H. Chan School of Public Health, and the Robert Wood Johnson Foundation, which jointly conducted a telephone survey of 1,885 adults.

In the most no-s* finding of all time, 1 percenters were found to have "near-universal life satisfaction," with 90 percent of that group saying they were "completely" or "very" satisfied with their lives, compared to just 44 percent of respondents in households earning less than $35,000.

Only 8 percent of those high earners reported having a serious problem paying for medical bills, while 57 percent of those making under $35,000 did. Even fewer of the rich said they had problems paying off debt, finding an affordable place to live, or paying for food or housing, which are routine and often crushing problems for those at the bottom of the income pyramid.

To continue reading, please go to the original article here:

https://www.vice.com/en_us/article/n7jb9m/the-1-percent-cares-about-inequality-but-not-taxes

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.5 Lessons From the 'Witch' of Wall Street

5 Lessons From the 'Witch' of Wall Street

The best advice is often timeless.

Karen Wallace, CFP®  Dec 31, 2019

Mentioned: Berkshire Hathaway Inc (BRK.B)

During the Gilded Age of the late 19th century, a woman named Hetty Green was one of the most powerful financiers in the world. She made the vast majority of her $100 million fortune ($2.3 billion in today’s dollars) herself, investing in railroad stocks and bonds, government bonds, and mining stocks. She also provided loans to cash-strapped businesses and bailed out the city of New York on several occasions.

But high society didn’t quite know what to make of Green. Despite having all the makings of a socialite--a huge fortune and a direct bloodline to the Mayflower settlers--Green preferred to dress plainly and conduct business with men. That Green preferred black, Quaker-style dress to fancy clothes wasn’t the only reason she’s best remembered by the epithet “The Witch of Wall Street,” though.

 Bain News Service, Publisher. Mrs. Hetty Green. [No Date Recorded on Caption Card] Photograph. Library of Congress, Prints and Photographs Division. https://www.loc.gov/item/2014680543/.

Green was much maligned in the press and among her contemporaries, who called her stingy and greedy. People couldn't make sense of this grotesquely wealthy woman who reputedly didn’t give to charity and made a habit of suing people--including members of her own family. Her frugality is legendary: She was even listed in the Guinness Book of World Records as the “World’s Greatest Miser.”

Unfortunately, Green’s enduring legacy hinges on the “Witch of Wall Street” dichotomy: Discussions of her enormous self-made fortune are typically offset by tales of how cheap and mean she was. Though it’s tempting to dispel a few of these myths and paint a less-wicked picture of Green, doing so ignores the more relevant lessons we can learn from her.

Here are five lessons we can learn from Hetty Green about investing and life.

1. Teach Girls about Business

American women would be much happier if they learned the principles of business in girlhood,[1] Green once told the Ladies’ Home Companion. Indeed, she credited much of her business acumen to lessons learned watching her grandfather run the family business while she was still a girl.

 To continue reading, please go to the original article here:

https://www.morningstar.com/articles/959622/5-lessons-from-the-witch-of-wall-street