Irrational Sensitivity to Gas Prices
Speaking of inflation, I noticed that people have irrational sensitivity to gas prices.
Warehouse club Costco stores in my area also sell gas. The price is usually a little cheaper than the price at other gas stations. I can tell by the length of the lines how much cheaper it is. If it’s five cents cheaper, the lines are very short or non-existent. If it’s cheaper by 10 cents or more, the lines are long. You have to wait good 10-15 minutes.
Is it worth it?
CPI Seasonal Adjustments
Every month, around the 15th, a government agency Bureau of Labor Statistics (BLS) announces the Consumer Price Index for the previous month. The inflation numbers for May was announced last week. A typical news report went like this:
Consumer prices rose 0.2% in May, the lowest in six months. Excluding the volatile food and energy, the core inflation was 0.3%.
The Market Is Always Wrong
Here are some articles I read recently. Some them have been out there for some time.
Privately Traded REITS by White Coat Investor – The White Coat Investor is a new blog by a doctor for doctors. The articles are still relevant if you are not a doctor but a busy professional with high income.
Privately REITs (and limited partnerships) are a problem primarily for wealthy investors: doctors, lawyers, and business owners. Stated more precisely, they are problem for wealthy investors who work with brokers.
Speaking of products for the wealthy, also read CME Pushes Managed Futures – Wealth with little risk by Allan Roth at The Irrational Investor.
Fitness Trainer and Financial Advisor
In a previous post Pay Someone to Enforce the Discipline, I compared fitness trainers to financial advisors.
"I’m pretty sure [the trainees] can get exercise routines off the Internet and do the same exercises on their own. Are those people foolish in paying good money for nothing?"
Peter Sagal is the host of NPR’s new quiz show Wait Wait … Don’t Tell Me!. He also runs marathons. He wrote a story in Runner’s World magazine about engaging a personal trainer.
Mortgage Refinance: Don’t Overlook Adjustable Rate Mortgages (ARMs)
The mortgage rates dropped again. I’m refinancing my mortgage again. It’s amazing it hasn’t been even a year since I did it last time.
The rates were low last year because of the anticipation for QE2. Once QE2 started, rates went up. Now rates are low again. Why? I don’t know. Maybe the market is expecting a QE3.
This time, instead of following my usual Stepping Down the Ladder script, I’m refinancing my mortgage to an ARM with a cash out. Before you call me crazy for choosing an ARM when rates are lower than ever, bear with me and read to the end.
Save More For Retirement Or Save For House Down Payment?
I see this question come up a lot from recent college graduates. After you contribute enough to get the employer match in the 401k or 403b plan, should you save more for retirement, or should you save for a house down payment?
The question is asked presumably because the income does not allow one to do both and therefore one has to choose one or the other.
The answer is simple: save more for retirement.
Buy My Book
Subscribe
What are these?
