Here is the best investment tip you will ever read: You are much better off by investing in a low-cost index fund than owning an active mutual fund or hedge fund. Kim Ishyan writes on TheStreet: “Every year, Standard and Poor’s publishes a scorecard showing how many fund managers beat various stock market indices around the world. And every year the fund managers lose. Last year’s scorecard showed that 84% of U.S. equity fund managers could not beat the market over the previous five years. Eighty-two percent could not do it over a 10-year period… It’s true some fund managers can beat the index from time to time (and these managers’ marketing departments let everybody know when they do). Some can even beat the index for a few years in a row. But there are almost none that can do it consistently. The managers that on occasion beat their benchmark index are probably just lucky.” Even the legendary investor Warren Buffett embraces this view on the money he’ll leave behind for his wife: “My advice to the trustee couldn’t be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard’s.) I believe the trust’s long-term results from this policy will be superior to those attained by most investors — whether pension funds, institutions or individuals — who employ high-fee managers.” (thestreet.com)
7 Things Debt-Free People Never Do
Charis Brown writes on ClarkHoward.com: “Even though two people could have the same education, come from the same financial background and make the same amount of money, the difference in their financial picture could be night and day, depending on how they view money. Debt-free people might have carried debt in the past or might have witnessed the havoc that carrying a large amount of debt has had on other peoples’ lives, vowing never to be in the same position. But the great thing is, when it comes to your money, no matter where you start, you get to decide where you go from here.” Here 7 things debt-free people completely avoid:
- Ignore their accounts
- Neglect saving
- Get duped by smart marketers
- Waste money
- Become addicted to shopping
- Succumb to lack of knowledge
- Waste opportunities to make money
Consumers Are Paying Less for Groceries Amid Global Glut of Crops
Food and gas are some of the required family expenses. Last year consumers got relief at the gas pump and now they got a nice break at the supermarket. As reported on MarketWatch, grocery prices have fallen for the last 12 months. It’s only the fourth time in the past 25 years that the cost of groceries has turned negative. The falling cost is due to a global glut among crop producers and a slower world economy. While the cost of making dinner at home is cheaper, eating out has gotten more expensive. The price of “food away from home” has risen 2.7% in the past 12 months. (marketwatch.com)
Most College Grads Unwilling to Forfeit Luxuries to Reduce Student Loans
According to a new survey from Citizens Bank, average student debt for millennials is $41,286 and 60 percent of millennials expect to be making payments on their student loans well into their 40s. Despite the burdensome loan payments, a large share of millennials are unwilling to prioritize student loan repayment over spending on luxury and quality of life items. This is what the survey revealed when asked what they’d be willing to give up in exchange for lower student loan payments:
- Less than half (45 percent) were willing to cut what they spend on eating out.
- Just 46 percent said they’d cut their entertainment and social event expenses.
- A mere 40 percent were willing to limit their housing expenses (rent or mortgage).
- Only half of millennials were willing to slash their spending on clothes, shoes and accessories.
“They are very committed to living their life the way they want to live their life, and as frustrated as they are by student loans, they are not willing to make those lifestyle trade-offs,” said Brendan Coughlin, president of consumer lending for Citizens Bank. (moneytalksnews.com)
The Income Needed to Live Comfortably in U.S. Cities
GOBankingRates conducted a cost-of-living comparison of the 75 most populous U.S. cities to find out the income needed to live comfortably in U.S. cities. Using 50-30-20 budgeting rule ― in which 50 percent of income covers necessities, 30 percent is for discretionary items and 20 percent is saved ―the study analyzes at what income level you can comfortably cover the living expenses. Here is 10 notable cities on the list with the income needed to live comfortably:
- San Francisco: $119,570
- Boston: $84,422
- Washington, DC: $83,104
- New York: $87,446
- Los Angeles: $74,371
- Denver: $62,842
- Nashville: $61,015
- Baltimore: 53,897
- Houston: $60,795
- Miami: $77,057
11 Reasons Why You Are Struggling Financially In Life
Alexandra Sadler writes on ClarkHoward.com: “While everyone’s journey to success and financial freedom are different, there’s one thing that most successful people have in common: successful habits. Developing successful spending and saving habits can not only be the key to reaching financial freedom, but also the key factor that determines whether or not you get rich.” Drawing from 5-year study by Author Thomas C. Corley about the people’s daily habits that made them rich or poor, Sadler listed 11 daily habits that hold people back:
- Gambling
- Having an unhealthy diet
- Drinking too much booze
- Hanging out with the wrong people
- Watching too much TV
- Negative thinking
- Procrastination
- Avoiding feedback and criticism
- Overspending
- Keeping a job you hate
- Never going out of your comfort zone
High School Senior With 3 Part-Time Jobs, 4.0 GPA Panhandling Way To College On Side Of Road
Eighteen-year-old Emily Stutz, a Lowell High School senior, tries to raise money for medical school in an unorthodox way – panhandling. Stutz has maintained a 4.0-4.5 GPA for the last four years and worked three part-time jobs. But she doesn’t have financial mean to attend the universities of her choice. “My parents have had immense financial struggles and simply cannot come up with $20,000-$30,000 a year, nor are they able to cosign a loan for me,” Stutz wrote on her fundraising page. “I have no other adults in my life who are able to cosign and I am at a loss. I see my dream of becoming a doctor slip further and further away as the days pass by so I’ve decided I am going to do whatever it will take to get myself to college. If people will give to the ‘homeless’ panhandlers then maybe they will consider sparing a dollar or some change to an aspiring doctor who has all the academic, but no financial means to attend college,” Stutz wrote on her fundraising page. Panhandling is her financial plan to pursue her college dream. (cbslocal.com)
Why You Should Buy the Biggest House in the Neighborhood
Economist Teresa Ghilarducci shares some personal finance advice about debt and consumption. She recommends that you should buy the biggest house in the neighborhood. That way you would feel fantastic since you don’t have the urge to upgrade as the people in the neighborhood aspire to be like you. Ghilarducci recommends that you shouldn’t hang around with people who buy things you can’t afford. Choose who to compete with in consumption smartly. By buying the best house on the block, you don’t feel jealous nor need to spend more money than necessary. Ghilarducci also explains that there are two kinds of interest, one you pay and one that you receive. You want to be on the side that gets interest such as savings account and investment. Don’t go into debts and get a mortgage that you can pay it off quickly. (time.com)
5 Story Books That Help Children Figure Out Personal Finance
It can take a lifetime to become adept at managing our personal finances, but the time to begin this process is when children are young. Here are 5 story books that teach children about earning, saving and spending:
- “Pretty Penny Makes Ends Meet” by Devon Kinch, ages 4-7
- “Cleo Edison Oliver: Playground Millionaire” by Sundee T. Frazier, 213 pages, ages 9-12
- “The Short Seller” by Elissa Brent Weissman, 251 pages, ages 9-13
- “Billy Sure, Kid Entrepreneur” by Luke Sharpe, 147 pages, ages 8-11
- “The Bullies of Wall Street” by Sheila Bair, 256 pages, ages 12 and older
This McDonald’s Restaurant to Offer All-You-Can-Eat Fries
The new McDonald’s restaurant in St. Joseph will offer all-you-can-eat french fries as reported by The St. Joseph News-Press. The McDonald’s of the future will also include digital kiosks for customers to order their food for quick service. The play area will have interactive light board tables, tabletop video games with different gaming options, and digital play. (newspressnow.com)
What Financial Documents to Keep and to Throw Away
Certain financial documents you can hold on to, “but you can let go of a lot of documents. And doing so will free you of all that paper and, perhaps, worry,” said Michelle Singletary at The Washington Post. Once you get your W-2 you can throw away the paycheck stubs, except the final stub that has a year’s worth of information. For prescriptions you can keep “for at least a year in case there is a dispute about payment.” You can shred the monthly bank statements as banks provide end-of-year information annually. You can also toss out utility bills unless you need them for tax deductions. For tax returns, keep the past seven years in case there’s an audit from IRS. “Finally, if you are unsure of what to keep, scan it.” (washingtonpost.com)
After 150 years, the American productivity miracle is over
Matt Phillips writes on Quartz: “Economist Robert Gordon has spent his career studying what makes the US labor force one of the world’s most productive. And he has some bad news. American workers still produce some of most economic activity per hour of any economy in the world. But the near-miraculous productivity growth that essentially transformed the US into one of the world’s most affluent societies is permanently in the country’s rearview mirror. In his magisterial new book, The Rise and Fall of American Growth, the Northwestern University professor lays out the case that the productivity miracle underlying the American way of life was largely a one-time deal. It was driven by a flurry of technologies—electric lights, telephones, automobiles, indoor plumbing—that fundamentally transformed millions of American lives within a matter of decades. By comparison, Gordon argues, today’s technological advancements—Uber, Facebook, Amazon.com—will touch the productivity of the American economy lightly—if at all. And a combination of demographic factors, such as the aging of the US population, and sociological problems such as growing inequality and educational performance that’s worsened in comparison to many other rich nations, will stymie economic growth for the foreseeable future.” (qz.com)
Americans prefer low prices to items ‘Made in the USA’
According to an Associated Press poll, the vast majority of Americans say they prefer lower prices instead of paying a premium for items labeled “Made in the USA,” even if it means those cheaper items are made abroad. People in higher earning households earning more than $100,000 a year are no less likely than lower-income Americans to say they’d go for the lower price. (ap.org)
10 Bad Habits That Could End Your Career
Your career is one of your biggest asset. Spend time to secure your career can help you reach financial goals and financial freedom. There are some bad habits that can derail your career. Liz Ryan at Forbes explains 10 bad habits that could end your career:
- Letting your temper show
- Being two-faced
- Bullying
- Betraying confidences
- Name-dropping
- Winning the battle and losing the war
- Sucking up to leaders
- Letting teammates down
- Lying
- Putting your interests ahead of everything else
5 Simple Things You Can Do to Be Happier Right Away
Neil Pasricha, NY Times Bestselling Author of The Happiness Equation, pointed out 5 simple things you can do to be happier right away on Quora. The good news is you only have to do one, not all five, to boost your happiness.
- Brisk 20-minute walk
- Journal about a positive experience you had during the day
- Commit a random act of kindness
- Meditate
- Write down five gratitudes
(inc.com)
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