Thanks Julie, your posting was very helpful. Besides additional payments, paying half your monthly mortgage every two weeks instead of every 30 days also reduces the time it takes to payoff your mortgage, is this correct? For example, if $2,000 is the monthly payment, and we elect instead to pay $1,000 every two weeks, this would accelerate payoff. How would this work out with your $200K mortgage scenario?
As a manager myself, I think you handled it exactly right. There's rarely a one-size-fits-all answer to these questions; the smartest way to proceed depends on all the sorts of factors you identified and took into consideration. There are some offices where it's very risky to reveal this kind of thing before you have a firm offer in hand (reflective of a silly culture, in my opinion, but they're there nonetheless). And there are bosses like yours who you know you can be straightforward with. So it's important to know the culture you're in.
That was amazingly informative. Thank you. I'd always wondered about the facts of the subject since you can't really trust crime movies to have studied the ins and outs of financial law.
A lot of the feedback is really interesting as well! Thanks to all the contributors for the great resources.
You know, I have to say you struck a chord in me with the trust issue comment, Sarah. I often struggle with the who to trust thing, as well as when to start developing it. Aside from extreme or particularly unique and delicate situations, I usually err on the side of taking the trust risk first. Why do I do this? For many reasons, but one big one is that until someone takes the first step, no dialogue can begin. In new relationships, it has to start somewhere. Your situation was quite different, as you had several situations and individuals to navigate and make decisions about. Your reason / analysis list shows purity of thought and integrity in decision making. I commend you for finding a way to protect your interests while maintaining your ideals. Good job, and good post.
We recently had a similar debate on this subject in our finance forum. We are finding most major cities both in the US & Canada no longer offer free or close to free events. Everything nowadays costs money or a small entrance fee. Even the government and our political leaders will no longer cover a $10,000 small event fee. Our society is turning into a money for all mentality! "Money For All" meaning my own pocket.
When I've worked at cash registers, the more talkative people became, the more I learned to concentrate on the money. The faster/louder/pushier, etc., they were, the more focused I became. I do wonder as someone else did here about how the one merchant knew what change to give without the visual cue of the denomination. I suppose the answer is that he was given some audible cue???
These people aren't laundering money, they are trying to scam you out of your own. They take advantage of flaws in the banking system, where International transactions take additional time to clear. As a "courtesy", your bank will normally credit your account for the check, before it has settled with the foreign bank. Once you see these funds "hit your account" you will send the counterparty a domestic check which he will then cash immediately. Shortly after, your bank learns that the original check was bad, and withdraws that money back from your account. (They have every legal right to do so.) The check you sent has been cashed, and the account that it was cashed in is now closed, and you are flat out of luck. Good luck tracking down the scammer at this point.
It may seem like food is expensive now, but in the 1950s it was a full one-third of a poor person's budget. In fact, that's how the poverty line was established: Government studies had already figured out what a healthy diet was. They calculated how much it would cost to eat a healthy diet (if you prepared everything at home) and then they tripled it. Three times the lowest cost to eat a healthy diet was the poverty line.
If food costs come to less than a third of your total spending, you're already ahead of the game versus a poor person in the 1950s. (The governent's current estimate is that food comes to 10.2% of an average person's budget.)
Philip, I'm just discovering your blog, and the advice to be frugal is probably the best piece of advice one can give.
It doesn't have to mean living in tattered rags under a barn. Just watching how and what you spend it on often does the trick, and you have to get rid of the notion that just because others do something, you have to too. I liked what Rob said in post no. 5. Me and my wife live in Sweden, and everything's expensive here. Yet my wife manages to keep everything very nicely within budget. There is a HUGE lot you can save by simply not buying packaged food that you micro, if you are willing to do some actual preparing and cooking. And you eat better by putting in that extra effort. So i'm not sure lucille's argument holds up about food costs. Just think what you're doing, and then think if there is another way to do it.
This man is simply one of the brightest con-men that I've ever seen. It's all about tricking people in short hand and being quick on your feet to get away before they realize their short fall. @ guest: for the change all he does is assume that the clerk assumes that he is giving him round dollars, i.e. if something is $5.78, the clerk thinks the guy gives him $6.00, thus the change from it. They don't look at the money because they are too distracted in the first place.
Interesting, I was always led to believe that owning was far superior to renting. Tax savings, value increase, leverage but after reading your article it has really given me a moment to pause and give serious considerations to the value of renting. thanks for the insight jimir
I buy bunches of baby carrots at a farmer's market. They are real, and small, and whole - NOT whittled down from larger carrots. Sometimes it is worth looking beyond what's on offer in supermarkets.
Thanks for the clever tip and wish I had thought of that before! I still hate the idea of the thumbprint but, depending on the situation, could comply with the rules but not really.
Now that you mention that, I do know someone (bond guy) who talks about underlying movement in technical detail (not just in terms of what the fed is doing but much more) and is something I need to learn more about.
Hi Nora, I think your post is a great primer on Mutual Funds. Yes, there are many more discussions to be had with mutual funds - one in particular is the open versus closed debate (I made the link from my name go to the specific post on my blog regarding this if anyone wants my take on it).
There are many closed-end funds with managers out there, I think your article is vague on that concept. While most index funds (Vanguard, iShares, etc) are "manager-less" they exist as mostly open-end vehicles. Closed-end funds can be more prevalently found with small-cap mandates. If your small cap universe is $10 billion on your market and there is $10 billion in a small cap mandated fund, then you can see the problem: having a manager manage $10 billion will cause the fund to BE the index - no value add. (not to mention the fact a fund manager can't hold more than a certain amount of the securities in any one company...)
Also, another point of clarification is currency effects. You stated that the performance of a fund is entirely dependent on two factors - but you forgot currency effects which if un-hedged, introduce a third factor in the total performance.
Also, it is important to note that for someone using an advisor, back-end loaded funds (even with the sliding schedule of fees) are IMHO mostly mis-used. You can purchase front end loaded funds and the advisor has the option of charging you 0-2%. The MER is basically the same as the DSC (back end with sliding scale) but you retain the flexibility given up with DSC funds.
Also, almost 40% of MER's go towards paying the distributor and advisor - it might be worth noting that in your line that deals with the expenses covered by the MER.
But these points are nit-picky - your post is well written and I will probably refer people to it for a great primer on mutual funds - it's much better than the one I wrote - I'm just glad my (considerably smaller audience) isn't so harsh on me!
One of the best laundering schemes was supported by good ol' UPS. In the old days people could ship a package C.O.D. for up to $5000. The UPS driver would collect the cash at the other end and then UPS would deposit it in their bank account and issue a good-as-gold, cash it anywhere, check to the shipper. This went on for many years until the dorks at UPS (FedEx, Airborne, etc.) finally figured out they were aiding numerous criminals.
Vanguard is a pioneer in index investing. They have a variety of mutual funds available, and if I'm not mistaken, the ones you linked to are a hybrid of an actively managed mutual fund and passively managed index fund. It appears that the managers track the general performance of certain indices, but also retain the right to change up the mix and percentages of indices, as well as the specific holdings. It appears to me to be the best of both worlds.
Vanguard also is a no-load company, and caters to investors looking for low fees - and they ended up changing the mutual fund industry because of it. I know many advisors that use Vanguard as part of their portfolio recommendations.
I'll also note that if somebody is determined not to work with a financial advisor, there are a few things you might want to take a look at in picking your funds:
1 - Long track record of steady performance. If the fund did gangbusters for one year three years ago, it's average annual returns for the last three years will be great. But what about the 5 year and 10 year returns? Don't look only at these numbers, but also look at the calendar returns for each of the last 10 years if you can. It can be very revealing.
2 - Long history with the same manager. If fund managers are being traded out like dirty laundry, it might be a sign of mis-management or a tough fund mandate to satisfy.
Morningstar is also a great benchmark for how funds are managed and performing, although not entirely foolproof.
Kinetic watches are great but solar powered ones in my opinion are just as good and less expensive. I've been wearing a solar powered watch made by Pulsar for about 10 years. I initially thought I would have to make a special effort to make sure the watch got enough sunlight to keep it going but I found that the watch gets enough power without me paying any attention at all to the amount of light it receives. It is also extremely accurate.
I'm paying the collections off of my credit report, I have two more that I will have off by February. When is a good time to get pre-approved for a house?
Somewhat related to your article, you might be interested in this theory that the addition of women to the workforce has lead to working more for the same amount of money. The author writes that by having women enter the workforce companies could pay less for employees knowing that the man did not have to solely support his family: http://dyske.com/index.php?view_id=882
"The investment seeks to track the performance of a benchmark index that measures the investment return of the overall stock market. The fund employs a passive management strategy designed to track the performance of the MSCI US Broad Market index, which consists of all the U.S. common stocks traded regularly on the NYSE, AMEX, or OTC markets. It typically invests substantially all of assets in the 1,300 largest stocks in its target index, thus covering nearly 95% of the Index's total market capitalization."
"The investment seeks to track the performance of a benchmark index that measures the investment return of stocks issued by companies located in Europe, the Pacific region, and emerging markets countries. The fund invests in three Vanguard funds- the European Stock Index Fund, the Pacific Stock Index, and the Emerging Markets Stock Index Fund. It allocates most of the assets based on the market capitalization of European, Pacific, and emerging markets stocks in the Total International Composite index. "
It's NOT carbon dioxide. It's other, cheaper, inert gases. http://en.wikipedia.org/wiki/Aerosol_spray
Thanks Julie, your posting was very helpful. Besides additional payments, paying half your monthly mortgage every two weeks instead of every 30 days also reduces the time it takes to payoff your mortgage, is this correct? For example, if $2,000 is the monthly payment, and we elect instead to pay $1,000 every two weeks, this would accelerate payoff. How would this work out with your $200K mortgage scenario?
As a manager myself, I think you handled it exactly right. There's rarely a one-size-fits-all answer to these questions; the smartest way to proceed depends on all the sorts of factors you identified and took into consideration. There are some offices where it's very risky to reveal this kind of thing before you have a firm offer in hand (reflective of a silly culture, in my opinion, but they're there nonetheless). And there are bosses like yours who you know you can be straightforward with. So it's important to know the culture you're in.
Congratulations on your new position!
That was amazingly informative. Thank you. I'd always wondered about the facts of the subject since you can't really trust crime movies to have studied the ins and outs of financial law.
A lot of the feedback is really interesting as well! Thanks to all the contributors for the great resources.
You know, I have to say you struck a chord in me with the trust issue comment, Sarah. I often struggle with the who to trust thing, as well as when to start developing it. Aside from extreme or particularly unique and delicate situations, I usually err on the side of taking the trust risk first. Why do I do this? For many reasons, but one big one is that until someone takes the first step, no dialogue can begin. In new relationships, it has to start somewhere. Your situation was quite different, as you had several situations and individuals to navigate and make decisions about. Your reason / analysis list shows purity of thought and integrity in decision making. I commend you for finding a way to protect your interests while maintaining your ideals. Good job, and good post.
We recently had a similar debate on this subject in our finance forum. We are finding most major cities both in the US & Canada no longer offer free or close to free events. Everything nowadays costs money or a small entrance fee. Even the government and our political leaders will no longer cover a $10,000 small event fee. Our society is turning into a money for all mentality! "Money For All" meaning my own pocket.
When I've worked at cash registers, the more talkative people became, the more I learned to concentrate on the money. The faster/louder/pushier, etc., they were, the more focused I became. I do wonder as someone else did here about how the one merchant knew what change to give without the visual cue of the denomination. I suppose the answer is that he was given some audible cue???
Boy, you are really cranking out the material lately, Linsey. Great job!
the boob are not good , i mean the are no boobs
These people aren't laundering money, they are trying to scam you out of your own. They take advantage of flaws in the banking system, where International transactions take additional time to clear. As a "courtesy", your bank will normally credit your account for the check, before it has settled with the foreign bank. Once you see these funds "hit your account" you will send the counterparty a domestic check which he will then cash immediately. Shortly after, your bank learns that the original check was bad, and withdraws that money back from your account. (They have every legal right to do so.) The check you sent has been cashed, and the account that it was cashed in is now closed, and you are flat out of luck. Good luck tracking down the scammer at this point.
It may seem like food is expensive now, but in the 1950s it was a full one-third of a poor person's budget. In fact, that's how the poverty line was established: Government studies had already figured out what a healthy diet was. They calculated how much it would cost to eat a healthy diet (if you prepared everything at home) and then they tripled it. Three times the lowest cost to eat a healthy diet was the poverty line.
If food costs come to less than a third of your total spending, you're already ahead of the game versus a poor person in the 1950s. (The governent's current estimate is that food comes to 10.2% of an average person's budget.)
If you're interested, all you might ever want to know about the history of the poverty line is in The Development of the Orshansky Poverty Thresholds and Their Subsequent History as the Official U.S. Poverty Measure.
Philip, I'm just discovering your blog, and the advice to be frugal is probably the best piece of advice one can give.
It doesn't have to mean living in tattered rags under a barn. Just watching how and what you spend it on often does the trick, and you have to get rid of the notion that just because others do something, you have to too. I liked what Rob said in post no. 5. Me and my wife live in Sweden, and everything's expensive here. Yet my wife manages to keep everything very nicely within budget. There is a HUGE lot you can save by simply not buying packaged food that you micro, if you are willing to do some actual preparing and cooking. And you eat better by putting in that extra effort. So i'm not sure lucille's argument holds up about food costs. Just think what you're doing, and then think if there is another way to do it.
This man is simply one of the brightest con-men that I've ever seen. It's all about tricking people in short hand and being quick on your feet to get away before they realize their short fall. @ guest: for the change all he does is assume that the clerk assumes that he is giving him round dollars, i.e. if something is $5.78, the clerk thinks the guy gives him $6.00, thus the change from it. They don't look at the money because they are too distracted in the first place.
Interesting, I was always led to believe that owning was far superior to renting. Tax savings, value increase, leverage but after reading your article it has really given me a moment to pause and give serious considerations to the value of renting. thanks for the insight jimir
I buy bunches of baby carrots at a farmer's market. They are real, and small, and whole - NOT whittled down from larger carrots. Sometimes it is worth looking beyond what's on offer in supermarkets.
Thanks for the clever tip and wish I had thought of that before! I still hate the idea of the thumbprint but, depending on the situation, could comply with the rules but not really.
Now that you mention that, I do know someone (bond guy) who talks about underlying movement in technical detail (not just in terms of what the fed is doing but much more) and is something I need to learn more about.
Hi Nora, I think your post is a great primer on Mutual Funds. Yes, there are many more discussions to be had with mutual funds - one in particular is the open versus closed debate (I made the link from my name go to the specific post on my blog regarding this if anyone wants my take on it).
There are many closed-end funds with managers out there, I think your article is vague on that concept. While most index funds (Vanguard, iShares, etc) are "manager-less" they exist as mostly open-end vehicles. Closed-end funds can be more prevalently found with small-cap mandates. If your small cap universe is $10 billion on your market and there is $10 billion in a small cap mandated fund, then you can see the problem: having a manager manage $10 billion will cause the fund to BE the index - no value add. (not to mention the fact a fund manager can't hold more than a certain amount of the securities in any one company...)
Also, another point of clarification is currency effects. You stated that the performance of a fund is entirely dependent on two factors - but you forgot currency effects which if un-hedged, introduce a third factor in the total performance.
Also, it is important to note that for someone using an advisor, back-end loaded funds (even with the sliding schedule of fees) are IMHO mostly mis-used. You can purchase front end loaded funds and the advisor has the option of charging you 0-2%. The MER is basically the same as the DSC (back end with sliding scale) but you retain the flexibility given up with DSC funds.
Also, almost 40% of MER's go towards paying the distributor and advisor - it might be worth noting that in your line that deals with the expenses covered by the MER.
But these points are nit-picky - your post is well written and I will probably refer people to it for a great primer on mutual funds - it's much better than the one I wrote - I'm just glad my (considerably smaller audience) isn't so harsh on me!
Well done.
One of the best laundering schemes was supported by good ol' UPS. In the old days people could ship a package C.O.D. for up to $5000. The UPS driver would collect the cash at the other end and then UPS would deposit it in their bank account and issue a good-as-gold, cash it anywhere, check to the shipper. This went on for many years until the dorks at UPS (FedEx, Airborne, etc.) finally figured out they were aiding numerous criminals.
Awesome info Zack!
Vanguard is a pioneer in index investing. They have a variety of mutual funds available, and if I'm not mistaken, the ones you linked to are a hybrid of an actively managed mutual fund and passively managed index fund. It appears that the managers track the general performance of certain indices, but also retain the right to change up the mix and percentages of indices, as well as the specific holdings. It appears to me to be the best of both worlds.
Vanguard also is a no-load company, and caters to investors looking for low fees - and they ended up changing the mutual fund industry because of it. I know many advisors that use Vanguard as part of their portfolio recommendations.
I'll also note that if somebody is determined not to work with a financial advisor, there are a few things you might want to take a look at in picking your funds:
1 - Long track record of steady performance. If the fund did gangbusters for one year three years ago, it's average annual returns for the last three years will be great. But what about the 5 year and 10 year returns? Don't look only at these numbers, but also look at the calendar returns for each of the last 10 years if you can. It can be very revealing.
2 - Long history with the same manager. If fund managers are being traded out like dirty laundry, it might be a sign of mis-management or a tough fund mandate to satisfy.
Morningstar is also a great benchmark for how funds are managed and performing, although not entirely foolproof.
Kinetic watches are great but solar powered ones in my opinion are just as good and less expensive. I've been wearing a solar powered watch made by Pulsar for about 10 years. I initially thought I would have to make a special effort to make sure the watch got enough sunlight to keep it going but I found that the watch gets enough power without me paying any attention at all to the amount of light it receives. It is also extremely accurate.
I'm paying the collections off of my credit report, I have two more that I will have off by February. When is a good time to get pre-approved for a house?
first try to what are driving forces of stock price?
which stock to buy?when why? visit www.vbulls.com
Somewhat related to your article, you might be interested in this theory that the addition of women to the workforce has lead to working more for the same amount of money. The author writes that by having women enter the workforce companies could pay less for employees knowing that the man did not have to solely support his family:
http://dyske.com/index.php?view_id=882
http://finance.google.com/finance?client=ob&q=VTSMX
"The investment seeks to track the performance of a benchmark index that measures the investment return of the overall stock market. The fund employs a passive management strategy designed to track the performance of the MSCI US Broad Market index, which consists of all the U.S. common stocks traded regularly on the NYSE, AMEX, or OTC markets. It typically invests substantially all of assets in the 1,300 largest stocks in its target index, thus covering nearly 95% of the Index's total market capitalization."
Awesome.
http://finance.google.com/finance?client=ob&q=VGTSX
"The investment seeks to track the performance of a benchmark index that measures the investment return of stocks issued by companies located in Europe, the Pacific region, and emerging markets countries. The fund invests in three Vanguard funds- the European Stock Index Fund, the Pacific Stock Index, and the Emerging Markets Stock Index Fund. It allocates most of the assets based on the market capitalization of European, Pacific, and emerging markets stocks in the Total International Composite index. "
Also awesome.
Check out the ER's on those two. Not bad at all!