Just a quick quote regarding debt, mostly personal. The problem is usually not an income issue but rather a spending issue. There are plenty of people who make less money but date alsop in less debt, and likewise individuals who make more and they are a financial disaster. The trick is not to resolve your issues by simply increasing income but to improve our capacity to manage the income we do have.
The question of debt October 10, 2010
2009 Meltdown for institution and casual investors March 18, 2010
So I was just reviewing some old posts and I figured it may be a good time to revisit an old post on Losses (March 16, 2009). Back then we were talking about how casual investors were realizing their paper losses when they pulled out of the market. I also mentioned my strong “hold” position on my Walt Disney Company stock. If we just hop over to Money Central we can see that Disney stock hit an all time low in March 2009, around $18/share. As of the close of business Thursday, the stock is at $33.78/share, and has been pretty much a constant growth since March 2009. So, yes, it depends on when you purchased your stock, but basically you are realizing your loss when you sell. Those people who sold in March 2009, I believe took a $10/share loss, which means they purchased it for around $28/share. And they lost around $1,000. Which means they had roughly 100 shares. Now, if they waited a year before they sold it, instead of a $1,000 loss. They would have a $5.78 ($33.78 – $28.00)/share or $578 gain — roughly a $1578 difference!
The power of compound interest October 1, 2008
As we evaluate the collapse of the mortgage market, we see the power of compound interest, and what happens when the interest rate increases. However, recently while at the bank, I made a transfer into our son’s Coverdel Savings Account. Check this out. We have both a regular savings account, 3.02% APR, and a Coverdel Savings Account on a 2-year CD @ 5.02%. If we left his current balance at $500 and never changed it (and presuming the interest rates stay the same), over the next 20 years, before he is ready for college, the same $500 will grow to $910 and $1356 respectively. So, you can see that the simple difference of 2% yields a double rate of return. $410 growth, versus $856! (more…)