I heard about the book The Richest Man In Babylon by George S. Clason but I haven’t read it until now. It’s a fun little book. Two middle class guys in Babylonian times were wondering how come they didn’t have money although they worked hard in their trades. They went to ask the richest man […]
Pay Down Mortgage vs Investing In Bonds
In a low interest rates world, you should take a serious look at any loans you have. Although a 3.25% 30-year mortgage is often said to be "cheap money" or "almost free money" it’s neither cheap nor nearly free compared to the rate you earn on your bonds. This chart shows the difference between the […]
Find Out How Much You Paid Admin Fees In Your 401k Or 403b
Back in August, my 401k provider sent a disclosure required by the new Department of Labor rules. It basically said they may deduct fees from my account and when they do, the amount would show up on the quarterly statement. It didn’t say how much those fees would be. See my previous post New 401k […]
EE Bonds vs CDs and Bond Funds For Long-Term Investment
It’s often said that one’s ability to delay gratification is an important factor of success in personal finance. When you don’t buy that new whatever until you have enough money to pay for it, you save on interest you would otherwise pay. When you save a portion of your current pay for retirement, you are […]
Tax Efficiency: Relative or Absolute?
Tax efficiency becomes a factor when you have investments in regular taxable accounts (versus a tax advantaged accounts such as a 401k or IRAs). Because you have to pay taxes on interest, dividends, and realized gains, an investment that loses less of its returns to taxes is said to be more tax efficient. Tax efficiency […]
Stocks or Bonds in Roth?
[This is a guest post from Bogleheads investment forum participant Bob’s not my name.] A number of spurious arguments are made for holding riskier assets in your Roth IRA as opposed to a Traditional IRA. Let’s examine them. For simplicity, we’ll refer to risky assets as stocks and less risky assets as bonds, but the […]
Double The Bond Yield: Maximize Your Advantages As An Individual Investor
QE3 is a tipping point to me. It hit me with the reality that we are going to be in this low interest rate world for the long haul. Instead of taking a punch in the face, I resolve to fight back. I’m tired of getting paid a puny amount on my money. I’m going […]
Guest Post at Michael Kitces’ Nerd’s Eye View Blog
Michael Kitces is Director of Research for Pinnacle Advisory Group, a private wealth management firm in Columbia, Maryland. Michael is also a very active writer and speaker in the financial advisory community. He provides very good insight for financial advisors, clients, and DIY investors on his blog Nerd’s Eye View. Michael published a guest post […]
New 401k Fee Disclosure Does Not Disclose Admin Fees
New regulations from the federal government forced 401k plan providers to give better disclosure to the plan participants about the fees they are paying. August 30 was the deadline for distributing the first disclosure. You should have received yours by now. I read the disclosure from my plan. It confirmed that the funds in the […]
5 Stages of Grief and Low Interest Rates
I heard about the five stages of grief but I hadn’t really looked into it. When I read about it on Wikipedia, I thought the model fits very well how savers grieve about low interest rates. Denial "Rates have nowhere to go but up." "The Fed only controls short term rates. Low short term rates […]
Vanguard Index Fund Lost $25 Million On Facebook
Facebook stock did poorly since its IPO. It opened on May 18 at $42. Now it’s at $21. Nevertheless, as I predicted in the previous post When Will Your Index Fund Buy Facebook Stock? Vanguard still added Facebook to the Vanguard Total Stock Market Index Fund soon after the IPO. In the fund’s list of […]
Sell Cash-Secured Puts: Get Paid for Your Rebalancing Commitment
The previous two posts Pay a 30-Year Loan On a 15-Year Schedule and Borrow 30-Year and Invest The Difference showed how you can save money if you are committed to making higher monthly payments on your mortgage. This fits into a general theme: pay a lower price if you commit to something and you make […]