In his famous novel “A Tale of Two Cities,” Charles Dickens wrote: “It was the best of times.” Dickens novel is set in the years leading up to the French Revolution. The struggle of people against the entrenched power structure feels familiar to many. It seems to describe our current social and political climate. Despair and opportunity are swirling beside one another. This is creating a tale of two futures for the US economy. Continue reading “A Tale of Two Futures”
Regardless of whether the economy is surging or crashing, debt is always a topic of discussion in the media. Whenever the news cycle shifts to US budget deficits, it creates a renewed focus on the impact of debt. This is important because most of the developed world is deeply indebted. The most important thing to understand about debt is exactly what it is, and by extension, what it is not.
When most people think of “creating wealth” it conjures up grandiose mental pictures of fabulous riches and exotic celebrities. However, “wealth” simply means you own valuable assets. There is no particular reason why normal, regular people can create wealth using nothing more than their current income and intelligent decisions. The principal barrier to achieving this goal is a mindset that “It takes money to make money.”
When many young people endeavor to purchase their first automobile, they face a wide variety of choices. One of the choices available is to lease or buy. If buying, you can purchase the automobile with cash or finance it. It is highly important to make the right decisions when purchasing a car since the wrong move can turn that shiny new street cruiser into an automotive prison that locks up your financial resources for years on end.
With all of the recent news about the real estate market, it is probably a good idea to take a look at the different kinds of real estate that are available. In general, real estate breaks out into “residential” and “commercial” properties. The key difference between these categories we will be examining is the way that they are valued. This is very important because price increases & decreases are driven by the means of valuation.
The advent of boom and bust business cycles is certainly not a new phenomenon. Economic expansions and contractions have been commonplace throughout human history. The thing that made the recent economic downturn so painful is the fact that it followed successive decades of “fine-tuning” the economy by government and quasi-government institutions that skewed incentives and systematically diverted economic resources away from their optimal use. When this artificial stability (necessarily) collapsed, the result was a much more intense adjustment than most people had anticipated.
There is a popular phrase in investing terminology called the “smart money.” Typically this phrase is used to describe the investors that are ahead of market sentiment. These are the people with the foresight to sell before the market crashes and buy before the market booms. The critical question to ask is how we can become part of the smart money?
There are many schemes to “Get Rich Quick” but all of them rely on some form of luck or market timing that is not indefinitely sustainable. Thus, all of these “get rich quick” bubbles eventually burst. The only RELIABLE way to get rich quick is by selling “get rich quick” systems to all of the suckers. (It may not have been PT Barnum who said that there is a sucker born every minute, but whoever did appear to be right)
One of the personal finance topics that many people desperately avoid thinking about is that of insurance, specifically life insurance. The most prominent reason for this is because most people do not cherish the thought of their own demise. Another reason is that there are many insurance products available, and many people get confused.
A survey of millionaires conducted by Thomas J. Stanley and William D. Danko for their book “The Millionaire Next Door” found that taxes are their single highest expense item. Because of this, managing taxes is one of the highest impact items that can increase your net personal income. It is also worth mentioning that taxes work differently for employees and business owners.