Personal Finance For the N64 Generation
all about markets, stocks, bonds, and more
Reader in San Francisco: I have seen two articles about younger investors playing the oil speculation game, specifically on UWTI and DWTI (leveraged oil ETNs). I’ll have to admit, its a pretty interesting consideration for the Robinhood slush account. How bad are these leveraged products and what is the decaying nature of them? Continue reading “Should Millennials Be Playing the Oil Speculation Game?”
Back on June 30 in “How Tech Workers Can Get Ready For a Coming Crash“, I predicted that a tech stock crash was coming. My rationale was based on the huge size of many of the largest tech companies relative to their earnings. I profiled 11 household names and looked at how they were trading relative to their earnings. I took particular care to warn that many of these big tech names were losing money and could collapse in value. Let’s see how I did. Continue reading “Seven Months Ago I Predicted a Tech Stock Crash, How Did I Do?”
How about those Iowa Caucus results? Bernie Sanders and Hillary Clinton ended up in a virtual tie, and the top three Republicans finished within a few percent of one another. Looking at the entrance polls on CNN last night, I had a random financial thought and realized I really needed to share it with you. Last night’s Iowa causes just made me love the Roth IRA. Here’s why. Continue reading “Why the Iowa Caucuses Made Me Love the Roth IRA”
I got a really interesting email from a millennial missionary reader in Malawi. I’ll call him Kirby to preserve his anonymity. Kirby is a 20 something college grad, but he has no retirement plan or other employer savings program. This is a really common problem for workers in the ministry, as churches and other nonprofits tend to not put a lot of thought into benefit programs, or can simply not afford them. What’s a guy to do when he wants to be responsible and prepare for his future but has no organized program to help him do it? Here’s the email below, edited for length and clarity. Continue reading “Millennial Missionary Wants To Save For Retirement”
Before I started this website, I worked in the municipal bond business. Everyone in that world knows New Jersey’s finances are a basket case. However, no one is talking about right now is how badly the the latest stock market crash has affected the New Jersey Teachers’ Pension Fund. It speeds up the timeline for Armageddon in New Jersey by years. People are lazy. They look at the latest published reports for their information. However, by simply extrapolating their cash burn rate it is clear that the New Jersey Teachers’ Pension Fund will run out of money. The fund will be totally gone within 10 years. New Jersey will owe billions in payments to retired teachers that it doesn’t have. At that point, I conservatively estimate that New Jersey slashes teacher pensions by 50% and New Jersey raises taxes by about 30%. Continue reading “New Jersey Teachers’ Pension Fund Has Eight Years to Live”
I’ve taken a real beating in the stock market this year. My performance has been worse than a 50/50 blend of US and International index funds. My personal year to date return is somewhere in the neighborhood of -10%. As I write this, the broad US stock market returned close to 0% year to date and the broad International stock market returned about -6% over the same period. Am I a fraud? Should you completely ignore all my financial musings due to my under performance? The good news is that I have a very specific rationale for investing the way that I do. It helps me stomach my terrible portfolio performance in 2015. Understanding why I have a 100% stock allocation and why I’m not selling anything in response to the market downturn will help you the first time you see a 5 figure loss staring back at you on your account statement. Continue reading “Why I Am Cool With My Terrible Portfolio Performance in 2015”
Continuing this week’s series focusing on teacher finances, I wanted to warn about how the pizza in the faculty lounge could be the most expensive one on Earth and why teachers are at great risk for buying it. To explain why this food is so dangerous for your financial health, I need to explain how people in the financial advice industry are paid and why teachers make great targets for folks not legally obligated to act in the best interest of their clients. Hold onto your rulers and apples because this could literally save you several years worth of salary. Continue reading “Teachers, Beware the $100,000 Pizza in the Faculty Lounge”
This week, I would like to focus on the finances of one of America’s most important occupations, teaching. There are millions of teachers in the US, so if you’re not one yourself you probably know someone who is. Most of what I’m going to write applies to anyone with a similar occupational profile, but I want to target it towards that group. In regards to the title, a lot of you are going to laugh at me right now for saying the teachers can become billionaires. Unfortunately though, most workers of a modest wage write off their ability to ever build meaningful wealth in this country. To illustrate how even underpaid professionals like teachers can become fabulously rich, I thought I would run a simulation to show that a couple of teachers can really become billionaires one day, even though there are some major caveats. For all you public servants out there, here’s a way to serve society and secure a spot on the Forbes list at the same time. Along the way, you’ll enjoy long summer vacations, smart coworkers, and the knowledge that you’re making a difference. Continue reading “How Teachers Can Become Billionaires, or At Least Multimillionaires”
If you’re like me, your 20s are a scary time because of all the decisions you have to make. Sure, there are big life choices in every decade, but for some reason the ones you make in your 20s seem more intense and permanent. What are you going to study in college? What job are you going to pursue? Where are you going to live? Who are you going to marry? The weight of these decisions seems to make the things we struggled with as teenagers (Does he / she like me? Am I going to take Honors Math?) and the things we will struggle with as 30 and 40 somethings (Which house do I want? What school district do I want my kids in?) seem trivial by comparison. I’m here to tell you some good news. You can literally avoid a million dollar mistake and knock years off your retirement date if you follow one simple step in your 20s: Max out your Roth IRA. Continue reading “The Million Dollar Mistake Most People Make In Their 20s”
I still can’t shake the feeling I got from how Monday’s Flash Crash 2.0 went down. Investment funds like ETFs are supposed to be stable instruments to build long term wealth, and the SEC let fast money accounts take 30% or more from average retail investors. Before Monday, I never thought that ETFs could separate so drastically from the price of their underlying holdings, but now we know. Now that we have ultra fast computers and everything is run on algorithms, what might the next crisis look like and how can we be prepared? Continue reading “Flash Crash 2.0 Showed Us What the Next Crisis Might Look Like”
