Debt

August Finance Reads-Sharpe, Buffett, Trump and More

August Finance Reads-Sharpe, Buffett, Trump and More

By in Debt, Investing, Links, Stocks | 2 comments

With the Chinese Yuan falling, Donald Trump rising, Greek debt still in the media, there’s plenty to think about. For a quick diversion, here’s some of the articles I’ve been reading recently. I hope you enjoy them as much as I did.  “Valuable Lessons From Warren Buffett’s Letter to Shareholders“, Cullen Roche of Pragmatic Capitalism – Cullen does a great job of pulling out the key takeaways from Buffett’s last years annual report. My favorite was “stop paying high fees”. My ‘ah-ha’ lesson was “risk is not volatility”. He referenced Buffett is saying that risk is actually not meeting your financial goals. Simple and true! How to Get the First Million Dollars“, Peter Anderson of Bible Money Matters – He took inspiration from the Quora question, “How did you make your first million dollars?”. The responses to that question gives insight into various ways to get to that 7 figure benchmark. My simplest solution to hitting a million at age 65 is to start at age 30 and invest $555 per month in a diversified portfolio of stock and bond mutual funds. (Assumes you average a 7% annual return.) Indexed Investing: A Prosaic Way to Beat the Average Investor; William Sharpe, Nobel Prize winner – This legacy work by founder of the Sharpe ratio and stalwart of modern investing lays out the importance of an index investing approach. This is a research-informed article and still important, more than a decade after it’s initial publication. (Now you know what a finance geek I really am) “The Power of Dividend Income“; John Dulin of Money Smart Guides – John explains how dividend investing exemplifies the magic of compounding. He graphically shows how reinvesting those dividends can really add up.  “If You Prioritize Stability; Don’t Prioritize Stocks“; PK at DQYDJ.com. I had a tough time picking an article to feature because I got caught up in the calculators and visualizations. PK is so smart and his data interpretations are fascinating. In this particular article, he takes the simple concept of ‘higher returns necessitates greater risk’  and expounds upon it.  “The Best Way to Pay Back Student Loans While in College“; Magnify Money. With student loan debt blanketing the media, this article is a down-to-earth view...

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Personal Finance Luminary-The College Investor

Personal Finance Luminary-The College Investor

By in Debt, Mind and Money, Money Management, Personal Finance Luminaries | 0 comments

Personal Finance Luminary Series-Robert Farrington Welcome to an inside look into some of the most important personal finance luminaries online. These influential people educate and entertain others about money topics. From authors to podcasters to writers, these money mentors are working to raise the level of financial knowledge and education.  Read more about Personal Finance Luminaries >>> Personal Finance Luminary College Investor-Robert Farrington Enjoy this interview with Robert, personal finance luminary college investor, one of my favorite online inspirations. 1. What is your background and money/financial influences? I honestly started blogging about personal finance because I was bored and I’ve always had a passion for money. In college, I went to my schools investing club, and I was pretty disheartened by what I found. It was really just a bunch of amateurs talking about day trading and penny stocks. It wasn’t what I was interested in. Then, as I talked to more of my friends, they were searching for the information I wanted to provide. Finally, one day sitting in the back row of my econ class, I decided hey, I’m just going to start writing on a blog about this stuff. That started The College Investor. After writing for a few years, I kept being frustrated at roadblocks stopping young adults from investing. As such, student loan debt started becoming a central theme on the site as well. It’s since evolved into one of the largest sites dedicated to helping millennials navigate out of student loan debt and start investing in their future.  Given what the site has become, I’ve also been able to brand myself as America’s Student Loan Debt Expert, and I regularly help students and graduates navigate the crazy world that is education financing – all with the end goal of helping them be able to start investing and building wealth. Learn wealth building basics in a few hours here. 2. With a full time job, how do you make time for a full online career as well? You also need to add that I’m a husband and dad as well – family is always my #1 priority. Otherwise, it’s time management and solid planning. I am very diligent when it comes to my schedule. I own...

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What’s the Impact of the Greek Debt Crisis On My Investments?

What’s the Impact of the Greek Debt Crisis On My Investments?

By in Asset Allocation, Bond, Budget, Debt, Economics, Investing | 0 comments

Current Investing Analysis Will the Greece Situation Hurt My Investments? As investors, we tend to get nervous when there’s economic upheaval. It’s well known that investment markets are skittish. Markets can drop in a minute after negative economic news. The Greek Debt Crisis is all over the news. But what are the implications of this global crisis for the average investor?  Click here if you want to solve your investing problems.  Greek Debt Crisis Overview Let’s get a quick drill down into the Greek Debt Crisis. Then we can look at potential impacts for our investments and finally, what should you, the investor do. Greek is in debt to Germany, France, The European Central Bank and the International Monetary Fund (IMF). Athens owes approximately 320 billion euros. During the first week of July, Greece missed a 1.5 billion euro payment to the IMF, according to a recent NYtimes.com article, “The Debt Crisis: What Greece Wants and What  It’s Offering” by Jeffrey Marcus here’s a break down of the situation. Greece can’t make the payments because it’s almost out of money and Europe won’t lend them any more. When Greece runs out of money and can’t borrow any more then it won’t be able to pay it’s debts including pensions. Greece might be kicked out of the European Union. Then the country would have to start printing it’s own money. >>> Positive and Negative Impacts of Globalization; Financial and Other Implications>>> Greece is begging for a three-year loan remediation program. After the three years, they want additional market financing going forward. They previously wanted debt relief, which was not acceptable to the major players in the crisis. Include international investments in your portfolio to benefit from growing international economies. Click here to get a successful approach to make more money with investing. Europe requests that Greece cut its spending or ‘no deal’. This week Greece and it’s Eurozone partners announced an agreement in an attempt to resolve the crisis. According to the WSJ.com article, “Greece Approves Austerity Measures” by Stamouli, Bouras, and Stenhauser the Greek Parliament passed the stringent changes required by the Greeks to gain a new bailout. This act led to great conflict among the Greek legislative members.  This ongoing...

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Prosper Review – Where to Get a High Return On My Cash?

Prosper Review – Where to Get a High Return On My Cash?

By in Advanced Investing, Debt, Investing, Make Money | 34 comments

Prosper Loan Investment Returns-Where to Get a High Return on My Cash? Since October 2011, I’ve invested in Prosper Loans. This is the fourth update of my experience investing in Prosper loans. In October, 2011, I decided to take a small percent of my investment money and lend it to Prosper borrowers through the Prosper Marketplace. Prosper borrowers must meet minimum credit score ratings and go through a vetting process. These borrowers typically want to borrow money for short term needs such as debt consolidation, homeowner remodel, or business expansion. The borrowers are graded according to credit worthiness from AA to HR. Typically, the lenders return varies based upon the percent of loans in their portfolio from each specific credit grade. For example, if you had a portfolio of all E rated loans, then you could expect a return of 12.51%. Whereas, if you were a more conservative lender and only lent to the AA borrowers, you average would be approximately 5.21%.  As you would assume when considering ‘Where to get a high return on my cash‘, the lower quality lenders; C, D, and E have higher returns because they are riskier borrowers with a greater chance of default. That said, lending to others through Prosper is increasing my income as I serve as a banker to those who need money to build their businesses, pay off debt, or for other short to medium term uses. Caveat; this type of investment has a greater risk and may be considered a speculative investment. Investors! Earn great returns with Prosper.com peer-to-peer lending Why I Invest in Prosper Loans I believe in the concept of peer-to-peer lending directly to borrowers in need. I diversify my investments across many loans, in order to reduce the risk. And, I want to get a high return on my cash! At present I have 1,108 notes and of those notes, 35 are past due. That’s about 3% of the total. Fortunately, when Prosper approximates the return, they take into account the default rate.   By diversifying across many loans, if a borrower defaults on her loan, it’s only a small loss to me. As in any riskier investing endeavor, with higher rewards, the lender also expects more losses....

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What Happens to Retirement Accounts During Bankruptcy?

What Happens to Retirement Accounts During Bankruptcy?

By in Debt, Guest Post, Retirement | 1 comment

Facing Bankruptcy? Understand What Happens to Retirement Accounts During Bankruptcy No one wants to imagine filing for bankruptcy, particularly as they get close to retirement age. Unexpected job losses, injuries, illnesses, or other disasters can leave people owing more than they can afford to pay. Sixty-two percent of all bankruptcies are related to medical expenses. Other common causes include job loss, divorce, lack of insurance to pay for disaster costs, and poor credit management. Instead of thinking about moral imperatives, think about how to paint a better financial picture for yourself going forward. Bankruptcies have increased because of the recent financial crisis, so you’re not alone in seeking protection. Make sure to ask your bankruptcy attorney for formal advice about protecting your retirement assets. Let’s take a look at what you can and can’t keep when you file for bankruptcy. For the purposes of this article, we’ll assume that you’re filing for Chapter 7 bankruptcy protection. What’s Protected From Your Creditors When you file bankruptcy, you can keep most retirement and pension plan funds. The types of retirement accounts are protected during bankruptcy: 401k 403(b) Keoghs Profit sharing plans Defined benefit plans (traditional pensions) Money purchase plans As of 2015, traditional and Roth IRAs are exempt up to $1,245,475. This amount changes every three years due to cost of living adjustments, so it’s always good to double-check the amount with your attorney. Anything over that upper limit might be used to pay back your creditors. The exception to this rule is the rollover IRA. If you rolled over retirement funds from one of the exempt plans into a traditional or Roth IRA, your rollover remains protected from creditors even if the amount exceeds the upper limit. If you’re already collecting income from your retirement accounts, the bankruptcy court can’t touch any amount needed for your essential support, but it can take an amount deemed unnecessary to meet your needs. Again, double-check with your attorney to find out how much of your income is protected. Also, just because funds are held in an instrument called an IRA doesn’t mean that the money is exempt from bankruptcy. According to the Supreme Court’s recent Clark v. Rameker decision, IRAs inherited from someone else...

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How to Clean Up My Credit History

How to Clean Up My Credit History

By in Debt, Guest Post | 4 comments

What People Overlook After They Get Out Of Debt  Guest contributor, Neal Frankle of Wealth Pilgrim.com One of the many things I love about Barb’s personal finance blog is that it provides a wealth of strategies to help you build a solid financial future.  As Barbara repeatedly points out, the first order of business is to get out of debt if you have any. That step is very clear.  But what many people overlook is the aftermath that debt leaves. The problem is, if you were late in making payments or had a charge off or two, when you were struggling, that leaves a mark on your credit score – even if you subsequently get current on all your bills. And a negative credit history means it will be harder and more expensive to get credit now. So even if you’ve cleaned up your credit act, you may be still pay the price if you don’t clean up your credit history on your report as well.  Cleaning up your credit history an important step to take before investing and building wealth. How to Clean Up My Credit History? There are some companies who promise you the moon and the stars and claim they can help you wipe out any credit blotches – no matter how ugly.  Sadly this is not true.  If there is a negative item on your credit report, it will have to stay on your record for a number of years unless it is inaccurate, unverifiable or incomplete. On the face of it, that may sound discouraging but actually there is a big ray of hope in that statement, if you read between the lines.  Again, in order for a negative item to remain on your credit report, it must be accurate, verifiable and complete.  Is My Credit Report Accurate? You probably already know that the three major credit bureaus are required to provide you with a free report once each year.  Make sure to order yours and go through it with a fine-tooth comb. Ask yourself these questions when thinking about, ‘how to clean up my credit history’. Are there any misrepresentations? Are there any negative items reported that never really happened?  Are there other errors?  If...

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