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Archives for May 2016

Working Millennials: Rent or Buy Real Estate? Part III

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Buy of course! As I wrote to you in Parts I, and II the key for you is to be creative and get started: Make the jump from a life of paying “The Man” to one where you pay yourself. A simple concept, yet hard to do. What did I do when I was your age? I made the monumental change in my own mindset—I became determined to pay myself. I bought a multi-family, rented the top two floors and lived on the first with two co-workers from Fidelity Investments. I want you to buy a multi-family type property.  It can be a two-family, four-family, you can live in the basement of a brownstone. It … [Read more...]

Worthy Reads: Hope is the Strategy for Tesla Investors

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Refiners The Last Domino to Fall in Oil Bust (WSJ) Investors Discover Fintech Firms a Feature not a Business (Fortune) High Anxiety: Markets Get Roiled (WSJ) Technology Crashing Relative to the Market (Business Insider) Hope the Strategy for Tesla Investors (WSJ) Will Computers Replace Journalists (Financial Times) Soda Sales Immune to Higher Taxes in Mexico (WSJ)       … [Read more...]

Working Millennials: Rent or Buy Real Estate? Part II

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In Part I told you how I got into real estate and I haven’t looked back since. How can you, a young Millennial, get started? Get creative! Figure out a way to come up with a down payment. I did. I borrowed from my dad. But what if that isn’t an option for you? Well, keep moving forward. Get creative. The best way I have found to be creative is to speak directly with the decision maker. It’s the best way to find out the real story. During my search for a multi-family property in Marlborough, MA I scoured the classified ads with a red pen. I came across an intriguing listing 40 minutes … [Read more...]

Fed Economist: Negative Rates a Tax

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Chris Waller, an economist and EVP and Director of Research at the St. Louis Fed, wrote on Monday that negative interest rates are a tax in sheep's clothing. Waller says: Many foreign central banks—such as the European Central Bank, the Bank of Japan and the Swiss National Bank—have implemented negative interest rates on bank reserves as a policy tool to stimulate demand for goods and services. If a bank holds a dollar of reserves, the central bank may take, say, half a cent. The hope is that a negative interest rate will induce firms to lend out the reserves by charging a lower interest … [Read more...]

Working Millennials: Rent or Buy Real Estate?

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When you’re a working Millennial, your weekends are extra valuable: Everybody’s working for the weekend. When I was the age of today’s Millennial I worked at Fidelity Investments and lived in Watertown, MA. Rent was a big chunk of my paycheck but that’s what it cost to be so close to Boston. I wasn’t saving much money. Then there was a change. My department was moved out to Marlborough, MA—40 minutes west of Boston. For a while I did the reverse commute from Boston to Marlborough. But that got old fast. I wanted to live where I worked and I was also tired of paying someone else … [Read more...]

The Most Powerful Force in Investing

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The most powerful force in investing is compound interest. As Charlie Munger, Warren Buffett's long-time partner once said "Understanding the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things." The examples of compound interest that we see presented most often are those that show its power over long periods of time. Here we illustrate the power of compounding in another way. The chart below shows the gain on a $10,000 investment over a 20-year period using different rates of return. The rates of return are on the horizontal axis … [Read more...]

The Prudent Man: The Wisest Action is Sometimes No Action

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What is the key to achieving the financial success you and your family deserve? Well, for one it’s about keeping it simple—Simple is Sophisticated. Another key is to stop spinning your wheels. In portfolio management terms, spinning wheels or, how long a position is held over the course of a year is called the turnover rate. In other words, if your holdings at the beginning of the year were sold and replaced by new positions, then the turnover rate would be 100%. Here’s a wonderful example, one of my favorite, that Dick Young explains to his readers: Mr. 3.5% Turnover In 1992, Forbes … [Read more...]