Links – 27/04/07

Intrest vs Inflation(thesimpledollar)

Last week, I wrote a pretty harsh criticism of Spend Every Dime!, a Slate article that basically encouraged people not to save money because taxes and inflation eat up most of the gains. But why is that? Let’s take a step back and look at what’s actually going on here, piece by piece. Some of this may seem very basic to some of you, but it provides a good illustration of why exactly inflation is important.

Common money mistakes(getrichslowly)

Everyone makes mistakes — it’s a part of being human. But it’s those who learn to minimize their mistakes who are able to fight debt and to build wealth. Paul L. forwarded a Reuters article by Linda Stern that explores common money mistakes and gives advice on how to fix them. Stern warns that if you have chronic money problems, you’re basically subsidizing those that don’t:

Strategic Management(yahoo)

One of the great truisms of leadership success is that a leader must constantly keep an eye on “the big picture.” But there’s a serious flaw in this bit of time-honored advice — the big picture keeps changing. In its wake lie the best-made business plans and strategies of organizations that had planned for one future, only to see another emerge.

US subprime contagion(FT)

That report goes on to argue that in fact the UK remains less susceptible to the kind of subprime shock that has affected the US market. Riskier products became more popular stateside, with higher loan to value ratios, lower standards of income verification and adjustable-rate mortgages, which start at a fixed, discounted rate and ratchet up after two or three years, accounting for more than 80 per cent of lending, up from 60 per cent in 2000.

Emergency Fund(theSunsfinancialdiary)

There are lots of discussions on why an emergency fund is the foundation of personal finance. Before starting investing your money in the stock markets, you should have a safety net to protect your assets. As for how much is enough for an emergency fund, a commonly accepted standard is that you should have no less than three months’ worth of money to cover your daily expenses, including all your obligations such as mortgage, loan, and insurance, etc. The total amount then is your average monthly spending multiplied by number of months you need to go through the uncertain period.

Gold Buying Opportunity?(MarketWatch)

“Gold is being pushed down by momentum funds moving money to paper equities,” said Ned Schmidt, editor of the Value View Gold Report. “Fear of missing a rally in paper assets is rampant.”

Are You a ‘Make Money Online’ Addict?(artofmoney)

Hard work, exploration, taking chances, perseverance, creativity…those are the qualities that lead to making money (and personal satisfaction), either online or off-line.

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