After reading my post about ESPP, a reader David sent me an e-mail and asked I’ve read a bunch of stuff about ESPP and while everyone talks about what a good deal it is for the employees who are able to participate, or the tax consequences of the various ways to sell the shares, no one talks about what […]
Agency Bonds for Higher Yield Over Treasury
I invest my short-term money in a Vanguard money market fund and Treasury Bills. I also tested water with Agency bonds for slightly higher yield over Treasury for the same maturity earlier this year. Agency bonds are bonds issued by a federal government agency or a Government Sponsored Enterprise (GSE). A GSE is a entity […]
$10,000 Lesson On Variable Universal Life (VUL)
Variable Universal Life insurance or in short VUL is sold by insurance agents as a smart investment to unsuspecting people. The pitch usually goes like this: You invest in VUL. The money in the policy grows tax deferred. You get to choose what you invest in, stocks, bonds, international, you name it. It’s like a […]
Individual TIPS Or TIPS Mutual Fund/ETF
Just like there are mutual funds and ETFs that invest in stocks, there are mutual funds that invest in TIPS. I show a list of them in More Inflation Protection with TIPS After Maxing Out I Bonds. Mutual Fund/ETF Advantages Buying TIPS through a mutual fund (or ETF) is a good idea, because it gives […]
Payday Loans, Anybody?
No, I’m not talking about borrowing a payday loan. We all know it’s very expensive for the borrowers. If you treat the fee as an interest charge, the rate often reaches several hundred percent APR. You know, what’s bad for the borrowers must be a good deal for the lenders, right? What about owning a […]
Patent on Roth IRA Conversion
If you have a Traditional IRA, perhaps as a result of rolling over a 401(k) plan balance, should you convert it to a Roth IRA? I heard on the radio program Marketplace that someone got a patent on the thought process. I looked it up and lo and behold it’s there. U.S. Patent 6,058,376 “Process […]
401(k) Committee Chasing Performance
I received an e-mail from my employer’s HR department this week announcing some changes to our 401(k) plan. Here’s what they said (emphasis added by me, fund names masked). The 401(k) Committee decided to remove the ABC Fund from the Plan due to poor performance for several quarters. The committee closely monitors all funds in […]
Successful Business Strategy: Selling Hope
While reading newspapers on a plane, I discovered a winning business strategy: Selling Hope. The products you sell don’t have to work as advertised. They may or may not. That’s not the point. All you have to do is selling the hope that they will work. There are plenty of examples for this strategy. Airborne […]
Tax and Inflation Penalize Savers
I bought some EE savings bonds in May 2002. Today is the first day I get to redeem them without penalty. Each $100 saved back then is now worth $118.40. This is one of my worst investments in the last five years. My return on these EE savings bonds is 3.44% a year over the […]
Vanguard or T. Rowe Price Funds: Actively Managed vs. Index Funds
Blogger pf at My Personal Finance Odyssey reviewed his investments in T. Rowe Price funds. He gathered last 5 years’ performance numbers for the T. Rowe Price funds he invested in and the performance numbers for similar funds by Vanguard. His analysis showed that many T. Rowe Price funds had better returns than the comparable […]
Opt In or Opt Out: The Power of the Default Option
I read a great article on New York Times last week, Unnatural Selections. The author, Mr. Barry Schwartz is a professor of psychology at Swarthmore College. He wrote about the power of the default option. People tend to stay with the default option presented to them because deviating from the default option requires making a […]
Picking Stocks Is a Waste of Time
The 2/26/2007 issue of the Wall Street Journal had a special section for stock score board. If you don’t have access to WSJ Online, it’s worth digging it out from a library. I’m highlighting something I noticed in that section which makes the point for the title of this post — picking stocks is a […]