Are banks a safe place to keep money?
8 years ago
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Is Your Money Safe?
Comments (18)The actual value of the U.S. Dollar is shrinking. When the value of your asset is shrinking ... change it for an asset that isn't ... insofar as is possible. Five years or so ago, you could have bought CA$1.00 for 65 - 69 US cents. Now it'll cost you 98 US cents - US$1.02. Check the exchange rates of several basic world currencies in relation to the U.S. Dollar in recent years. That should tell you something. How about buying shares of strong, quality companies, abroad, in stable, growing markets? Had you bought some of those (cheap) Canadian dollars back a few years ago ... and used them to buy some oil and gas shares, you'd be smiling now. I think it's true that more of Alberta oil and gas goes over the border than stays in Canada. There's talk of the Chinese gov't.-related agencies using some of their U.S. dollar bonds (the value of each of which has been suffering annual shrinkage on the world markets) to buy Canadian oil and gas producers and build pipelines to Pacific tidewater. Paid for, originally, by some of the cheap Chinese-made products that you've been buying in the "Dollar" stores. In fact, if you had enough for a down payment on your house in a year or so large enough to avoid buying mortgage insurance, you might well decide that it would be wise to just let those oil and gas shares (or other resource-based shares) just sit there and keep earning ... and growing. In fact, if you had the certificates issued, and used them as additional collateral to back your house loan, you might get by without mortgage insurance on an even smaller down payment than is usually required. My daughter, currently buying a house, is leaving some of her assets inherited from her mother to keep on running rather than liquidating to reduce her mortgage (the mortgage interest being deductible in the U.S., as it is not here). Go to Yahoo or another financial agent and ask for ECA.TO (large natural gas producer), SU.TO (oil, involved with the tar sands), IMO.TO (major shareholder is Exxon), POT.TO (produces potash fertilizer), etc. (interlisted on NYSE, IMO on AMEX - but apparent growth won't be as large, there, due to exchange losses) as some examples, then check their 1-year, 5-year, etc. increases in share prices ... and factor in the exchange rate to find what your gross rate of return would have been. Then you figure your tax load, and the effect of inflation to calculate your real rate of return ... that is, current rate of return. To figure your actual result, figure in the rate of growth, if any, of the asset for that year, as well ... and if you want to be more accurate, reduce that amount by the reduction that you would have suffered due to tax, had you cashed the asset now. Sometimes an additional, e.g. 3% gross rate of return will double your real rate of return, for the amount of tax will usually be a percentage of it - but the rate of inflation is a direct deduction, and is the same for each asset in any year as you go, but does not vary depending on the type of asset. Good wishes for managing your money wisely - in a worldwide market. ole joyful...See MoreAre Banks healthy (and safe) now?
Comments (22)(BTW, I apologize for going so far OT) I enjoy CNBC - especially the Closing Bell and Fast Money shows - but you need to realize the people they bring on are almost all high-level execs, industry analysts or professional money mgrs. The latter trade in and out of ALL sectors of the market on a daily basis. It's not so much you take their advice with a grain of salt; the fact is that you must remember these people have a much different view of the market than the average person. Their viewpoint is concentrated on the 1 week to 6 month future, max. Like the markets they follow, their main focus is the next quarters earnings report. CNBC does interesting CEO and analyst interviews, and some of their documentaries are extremely good. I could wish they would drop Erin Burnett, whom I think is one of the dumbest and least qualified staffers in existence Sharon Epperson is far more intelligent and knowledgable; plus it would be great to see an AfrAm woman anchor a business show. Their 'bullishness' is focused on trading in and out of sectors; e.g., sector rotation. If you watched on a regular basis you would get a better sense of how different portfolio mgrs are viewing the markets. Some are gold bulls (and even those, such as Dennis Gartner and Joe Terranova, trade in and out of commodities regularly). Most agree that emerging and frontier markets will outpace the US and Europe economies, and that normalization of money flows due to high global liquidity is an accepted fact hence the bullishness for specific sectors and/or stocks. Again, this is all short timeframe stuff. Theyre also the only network that gives time (albeit in quick highlights) to explain the global currency and commodities exchanges on a daily basis. I personally loathe Jim Cramer and consider him an obnoxious TV personality, although he seems to appeal to many. Id watch Larry Kudlow before Id suffer through Cramer Kudlows a dyed-in-the-wool conservative but very intelligent, very knowledgable. Kudlow oversees some extremely spirited debates on his show with a little more political flavor added than the other CNBC shows allow. As for pushing stocks, the reason is as several guests commented throughout today's shows, huge inflows of money are going into bond funds. But when inflation picks up, which we're already beginning to see in emerging markets and some commodities, bond funds are exactly what you should avoid, at that point in time. Not now, but looking forward. The biggest difference between investing pros and amateurs is that pros are always thinking ahead, planning their exit strategies when circumstances change - because they know that circumstances ALWAYS change. Amateurs don't pay attention until the local 10p news starts screaming sensationalist 30-second spots. For instance, right now I do happen to be one of those people heavily in bond funds. But I've been holding this short-term bond position for several months now. Why? Because I decided not to be greedy and took my 46% profit for the year, back in early October. The market's gone a bit higher but not by much, and the bond fund's in double digits for ROI so I've nothing to complain about. I will go back into equities when the time is right, because it actually makes me nervous to hold nothing but cash and bonds; equities are the only way to survive inflation's inevitable long-term bite. Many good investors are contrarians. Warren Buffett is one of them. In early 2009 the media was running stories criticizing Buffett for 'losing his touch' after a bad 2008. Recently, the WSJournal wrote that 2009 may go down as one of the most brilliant investing years in Buffett's long career....See MoreAre hotel room safes really safe?
Comments (27)Ahhhh, you're going to see THe WOrld! We went there for our first and only time a year and a half ago. I also planned out the things that I really really wanted to see and do. THa'ts really important since there is NO WAY that you will be able to see and do everything in one trip...unless you're staying for a month!! I'd suggest not hopping from park to park in one day because you'll spend alot of your time either waiting for or on shuttle buses. That time is better spent within a park. Take time out to find a quiet spot and have a little rest if you're not going back to your hotel mid-day. If you buy a refillable cup, you can only use it at that particular hotel/resort....so think about where you are going to be when you need it filled. We used the one from our hotel since we are there first thing in the morning and again in the evening. If you get tired of the parks (noise and the Disney theme pounding in your head!) and you have the time...absolutely go to one of the water parks. Several people changed our minds into going to one and we were sooooo glad we did...it's a really nice getaway. If you bring that small backpack along...put your things into ziplock bags inside it...will be totally dry if you want to run through fountains etc (hey, it's Disneyworld...you can be goofy!) If you are sensitive to heat, buy one of those battery operated spray/fan/mister bottles from a vendor. They were a lifesaver for my daughter. Refill them with ice (Free) from all vendors. Wear a hat, waterproof sunscreen and sunglasses. Oh yeah, and don't forget the most important thing....TAKE ME!!!! I learned everything I neded to know from the Disney (World and Land) web sites....the people on those forums are absolutely fanatical about all things Disney and are worth their weight in gold as far as great advise goes. They'll even know all about what particular rooms to ask for at the hotel and all sorts of stuff you didn't even know existed. Be prepared to spend alot of time tough....there is soooo much info....See MoreWho's to Blame for the Mortgage Mess? Banks, Not Homeowners
Comments (46)Berniek is right: Much of the blame here falls upon the shoulders of the politicians (led by then-President Clinton), who forced banks to begin some rather foolish lending practices. Alan Greenspan certainly did his share to push this concept of "everyone can borrow" during his time as Fed chairman. Between creative financing, no money down offers, and other such options, the government has given people plenty of rope with which to hang themselves. We Americans haven't proven ourselves to be particularly strong in the moderation and self-discipline categories over the last 30-40 years. Also, remember the climate that existed in the 90s, when I bought my first house: Spurred on by the soaring housing prices, people were convinced that buying "as much house as you can afford" was a good move. Housing was considered an investment that couldn't fail. Yes, the experts began preaching about "the housing bubble" long before it hit, but the masses couldn't grasp how this sure-thing could ever fall. And there's always been a (faulty) basic belief that "If I couldn't afford it, the bank wouldn't lend it to me." I fully agree with those who say that Real Estate agents will push buyers to their upper limits and beyond, and banks will lend what they can -- it's all about profits for them. Yet, the home owner DOES also bear the brunt of personal responsibility. After all, who cares most about whether I can afford my mortgage -- and still buy groceries and other things I need? Clearly, it's ME! I reap the rewards or punishments of my decisions, so I should do the math and know whether I can comfortably afford a house (or anything else) before I buy it. However, we've sort of left that thinking behind in today's buy-now-pay-later society. We're constantly told that "we deserve" this or that thing. That if we're going to finance it, we deserve to have exactly what we want. That "everyone" has debt. We've got to get past that....See More- 8 years agolast modified: 8 years ago
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