Tag: Personal Finance
The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns
Owning a diversified portfolio of stocks and holding it for the long term is a winne's game. Trying to beat the stock market is theoretically a zero-sum game (for every winner, there must be a loser), but after the substantial costs of investing are deducted, it becomes a loser's game. Common sense tells us, and history confirms, that the simplest and most efficient investment strategy is to buy and hold all of the nation's publicly held businesses at very low cost. The classic index fund that owns this market portfolio is the only investment that guarantees you with your fair share of stock market returns.
Filled with in-depth insights and practical advice, The Little Book of Common Sense Investing will show you how to incorporate this proven investment strategy into your portfolio. It will also change the very way you think about investing. Successful investing is not easy. (It requires discipline and patience.) But it is simple. For it's all about common sense.
Debunkery: Learn It, Do It, and Profit from It-Seeing Through Wall Street's Money-Killing Myths
Many investors fail to question if what they believe is trueâ€”and are therefore blinded by tradition, biases, ideology, or any number of cognitive errors. The problem is, the errors don't seem like mistakesâ€”they seem like smart, intuitive, and/or widely recognized investing "wisdoms."
In short, accessible, and highly entertaining chapters, Debunkery details and debunks 50 common Wall Street myths.
Enough: True Measures of Money, Business, and Life
Written by John C. Bogleâ€“the legendary founder of the Vanguard Mutual Fundâ€“Enough. offers his unparalleled insights on money, the values we should emulate in our business and professional callings, and what we should consider as the true treasures in our lives. Inspired in large measure by the hundreds of lectures Bogle has delivered to professional groups and college students in recent years, this book will help you discover what it really means to have "enough" and how close you are to really having it.
The Jubak Picks: 50 Stocks That Will Rebuild Your Wealth & Safeguard Your Future
Jim Jubakâ€™s top-down stock-picking method is based on being in the right asset at the right time, ensuring that your portfolio is composed of stocks with the wind at their back and that are trending upward. He shows how to find the best stocks by first understanding ten macro trends changing the world, including:
â€¢ The economiesâ€”Brazil, Russia, Vietnam, India, China, and the "rest of the gang"â€”driving global demand
â€¢ The rising tide of retirement money in an older and wealthier world
â€¢ The commodities crunch in a world ever more hungry for natural resources
â€¢ The end of cheap oil
Save Some of Each Raise
"Anytime you get a raise split the raise between savings, paying off debt (if you have any non-mortgage debt), and increasing the amount you have to spend. I think too many people think financial success is much more complicated than it is. Doing simple things like this (and some of the other things, mentioned in this blog) will help most people do much better than they have been doing."
Charlie Rose Conversation with Elizabeth Warren
"If your worldview is that itâ€™s all about that handful of banks
on Mount Olympus, then you have a different notion of what the problem is
and you have a different notion of what the solution is. If your worldview
is about 117 million American families, households, and you understand the
kinds of pressures they are under and the problems facing them, you have a
very different vision of where we need to concentrate our resources and
where we need to start solving the problem."
Pitfalls in Retirement
A very good, detailed, overview of reasonable retirement planning and retirement spending expectations.
"Spending rates of 3% or less are likely sustainable, while those much above 5% may not be. Careful research confirms these observations.
The sustainability of spending rates within the range of 3â€“5% depends on the period in question as well as the other factors noted above"
Curious Cat Investing Blog post on the paper
Middle Class Families from 1970-2005
John Hunter, Elizabeth Warren
Webcasts of speech by Elizabeth Warren. Interesting data. Looking at standard family (Mom, Dad and 2 kids from 1970 to 2005), in inflation adjusted dollars: earnings increased a great deal (due to women working much more) but disposable income decreased. This is because basic expenses increased: health care, housing, transportationâ€¦ (and this is with assuming employer provided health care â€“ which has really been decreasing in likelihood over time). Those families are also more deeply in debt and reliant on 2 incomes. And if either income producer losses their jobs the economics of the family fail. Which means the family is much more at risk.
Fund manager keen on Malaysia
"Mobius said that over the past 25 years, he had been telling people that equities was the way to go and emerging markets were the places to be. Supply of stocks is growing in Asia and is actually soaking up the flow of hot money from offshore to this region.
'I am bullish on property everywhere. I put one third of my own money in equities, a third in property and a third in cash.'"
"To get the deals done, banks have turned increasingly to unregulated mortgage brokers, who now account for 80% of all mortgage originations, double what it was 10 years ago, according to the National Association of Mortgage Brokers. In 2004 banks began offering fatter sales commissions on option ARMs to encourage brokers to push them
The problem, of course, is that many brokers care more about commissions than customers. They use aggressive sales tactics, harping on the minimum payment on an option ARM and neglecting to mention the future implications. Some even imply verbally that temporary teaser rates of 1% to 2% are permanent, even though the fine print says otherwise."
5 Keys to Successful Dividend Investing
"build a diversified portfolio of hand-selected dividend payers with above-average but modest yields, well-covered by plenty of free cash flow. Pair this group with high-quality investment-grade bonds and a smattering of REITs, and you'll have built yourself a well-rounded income-focused portfolio that can help you achieve solid profits without undue risk."
New Normal math: How your investing plans must change
"I don't think the implications of changing stocks' rate of return from 10% to 5% have sunk in. We acknowledge that stock returns will be poor, and yet all of our retirement adviceâ€”save 10% of your income... withdraw 4% in retirementâ€”stays the same.
Option number two: Retire later. You're likely going to live to an age older than your parents anyway, and I'm sure you've had it in the back of your mind that it was never reasonable to work 40 years and then have a 40-year retirement anyway."
How to save $1 million by 65
"Save $250 a month until you're 65, for example, and you would need a 10% annualized return to hit that $1 million target.
I still consider that overly optimistic even for an all-stock portfolio, given the prices stocks are selling at today and the uncertainly surrounding the growth prospects here and abroad.
Boost your monthly savings to $400, and the return you need falls to about 8% annually. Possible? I suppose. But perhaps still ambitious.
Remember, though, having a million bucks 37 years from now isn't like having that sum today. In fact, assuming a modest 2.5% inflation rate, $1 million in 2047 would be the equivalent of having about $400,000 now. Or, viewed another way, you would need about $2.5 million in 2047 to have the purchasing power of $1 million today."
Investing Web Sites and Resources
Gen Y Wealth
Blog by R.J. Weiss: "Personal financial planning, because it's not that hard to get rich"
NPR Planet Money
Blog from National Public Radio (USA) on personal finance, the economy and all matters money related.
TIAA - Saving For Retirement
Articles to help learn about the financial issues and strategies to plan for a successful retirement savings strategy.
The Motley Fool
" Our mission: To educate, amuse, and enrich
Our vision: To build the world's greatest investment community
Our core values: Honesty, optimism, teamwork, innovation, winning"
The Frugal Life
Piper Terrett blogs about her adventures as she tries to live more simply while working from home (UK).