There’s a tremendous amount of concern out there about the future of the dollar. I know this because you tell me in my conversations with you. And that’s why we talk. I want to know your concerns. And believe me, I know today’s concerns are different than yesterday’s. Welcome to current times. “Survival Guy, what’s your take on the U.S. dollar?” you ask, and I understand why. I get the same “the world is ending” emails you do. But as far as the dollar is concerned, it’s the nicest house in a bad neighborhood. The world’s a scary place today. You can’t even watch the news. And the hucksters … [Read more...]
The Magical Word We’re Taught in School
Not to bore you with math, but investing is math. Hoping for a stock to get to some price is just that, a hope. It’s qualitative, not quantitative. Collecting income from all areas of your portfolio—even that money your nephew owes you—is quantitative. You can actually see it hit your portfolio, your bank account, or your wallet. When I think about the magic of compounding money, I think about math. It’s simple. You get paid like you did from your nephew. You got back what you lent out (though maybe you didn’t expect it) and usually some interest. But because he’s your sister’s son, you … [Read more...]
Investing Is Math
Sorry to burst your bubble, but investing is math. Sure, prices are fun to watch, but they aren’t the math of collecting income from your stocks, bonds, or that nephew who owes you. That’s math. You can see the money, rent, dividends, income, and even crumpled dollars coming into your possession. That’s investing. Look at today’s yields on bonds. Finally, you can sink your teeth into them. You can plunk $100,000 in a one-year bond yielding five percent and be pretty sure, especially in Treasurys, you’re getting $5000 plus your original outlay at maturity. You can’t say that about prices. … [Read more...]
If You’re Overexposed to Stocks, Then Look Here
If you’re overexposed to the stock market, it’s been a long time since risk-free Treasury bills offered yields like these. Yields you can sink your teeth into and do it again in a few months. Your Survival Guy isn’t in the prediction business. Predictability is not something you can say about tech-heavy Nasdaq, for example. Because we’ve seen how long it can stay down when problems arise. But that’s not my concern today. My concern is making sure you have multiple streams of income, so to speak. And I like doing it without you being exposed to leverage, which basically eliminates … [Read more...]
Investing Habits of the Fairly Wealthy: #6 Armadillo
When I was a kid, we took a lot of trips to Disney World, and when we were there, we stayed at Fort Wilderness. One day, a day off from the parks, my dad and I rented a canoe. Floating near the shore, we noticed these little animals digging in the dirt with what looked like a shell as hard as armor. “Those are armadillos,” my dad said. “They're harmless.” They didn’t look harmless to me, and I was sure I didn’t need to see them up close, but he thought we should. As we got closer, I said, “Dad, that’s close enough.” “OK,” he said, “I’ll turn us around.” Easier said than done, as … [Read more...]
Storming the Magic Kingdom: Wall Street and the Raiders…
When you look at the long-term advance of stocks over the past four decades, an observation worth noting: It was good to be 24 in 84. Meaning if you were young and hungry and happened to work on Wall Street, the world was your oyster. Until it wasn’t. Risk was rewarded, and a fair amount of luck was involved, disguised as skill. Not that these weren’t wicked smart people like Mike Milken, for example, the father of junk bonds. Because it was Milken who showed corporate raider Saul Steinberg how to storm Walt Disney’s castle with high-yield debt. Steinberg, like Captain Hook, had a boatload … [Read more...]
“There’s No Way He Deserves It,” They Say
When you look at today’s yields, you can finally say, “Self, this is your grandfather’s treasury bill rate.” Because it’s been a long time since we had rates that you can sink your teeth into. Yet, that doesn’t stop the howls and jeers for lower rates from the talking heads. “Houses are too expensive,” they complain. But you remember a time when your first mortgage rate was in the teens. You got through it. You figured it out. And here you are. In a world of instant gratification, where every asset was going up, and everyone was a stock market trader, now we’re seeing a taste of reality. … [Read more...]
Time to Revisit Your Bond Portfolio?
In The Wall Street Journal, John Greenwood and Steve H. Hanke, both economists at Johns Hopkins, discuss the similarities of today's markets to that of 1987, and October 19 of that year, which is known as "Black Monday." They write: This brings us to the stock-market crash of 1987. In that year the key 10-year bond yield rose steeply from January onward (from 7% in January to 10% by Black Monday in October) and the money supply slowed sharply. In 1987 growth of M2 declined by almost half, from 9.7% year-on-year in January to 4.9% in September, while M3—no longer published by the Fed—slowed … [Read more...]
Part II: When Others Resent You for Your Success
You appreciate what you have, where you’re at in life (maybe a little more money wouldn’t hurt), and where you’re going. You saved ‘til it hurt, and you know you definitely don’t want to have to do that again. You worked hard at your job, your business, and you put in the time. It went by fast, but a lot of those days were long. Now, you need to keep what you’ve made. A different skill set is needed. What are you going to do? First, I want you to avoid the mistakes that keep investors from realizing the success they deserve. Mr. Market has a way of wanting to change people’s lives, and not … [Read more...]
Life: When Others Resent You for Your Success
Let’s not beat around the bush. I’m Your Survival Guy, not Your Get Rich Quick Guy. I’m interested in helping the highly successful, fairly wealthy among you get through tough times with the peace of mind you deserve. My focus is mostly on navigating Your Retirement Life, the times when you want to enjoy your life’s work; living off your savings, not draining the bank, and doing what you have always wanted to do. Ahhh, the savings. I can’t do that part for you. That’s the heavy lifting that’s up to you. The showing up every day and getting the job done. Because the act of saving is just … [Read more...]
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