It’s college graduation time, and thousands of young adults are heading out into the world with their diplomas in hand and little idea about how to handle their personal finances. Having a sound understanding of personal finance is a fundamental building block of being an adult. Properly managing your personal finances really comes down to one simple rule: live the life you’ve earned, not the one you think you deserve. I realize it’s not that easy when you’re bombarded with marketing about what you deserve. The new car, exciting vacations, cool restaurants, updates to your wardrobe, your friend’s destination wedding, a new iPhone, and the list goes on. Marketers don’t mention whether you have earned the ability to purchase any of these things. They argue that if you can’t buy it, then finance it. And that’s the slippery slope to living a life you haven’t earned. Then you get into debt, argue with your spouse or partner, and get … [Read more...] about A simple, but not easy, financial game plan for recent college graduates
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If you’re a follower of the financial news, you’ve likely seen more stories recently about rising interest rates. You might wonder, why are investors so concerned about them? The main reason is that rising rates make just about everything harder to do in finance. That means they have the potential to slow down the economy. One of the main benchmarks for interest rates is the 10-year U.S. Treasury bond. The interest rate on that bond has moved from a low of about 1.4 percent a few years ago to around 3 percent today. That’s more than a 200 percent increase, and it’s working its way through the economy. The easiest way to understand the impact of rising rates is to consider how interest rates impact you as a consumer. Let’s say you want to buy a new car that costs $30,000. If the interest rate is 0 percent and you can borrow money for five years, your payment is $500 a month. But if interest rates on car loans rise to 5 percent, then that new car costs you … [Read more...] about Interest rates are rising and markets are unsteady. What should you do about it as an investor?
By Mike Allen (@mikeallen; [email protected]) and Daniel Lippman (@dlippman; [email protected]) Story Continued Below Good Thursday morning from Miami Beach. Thank you for reading and feeding Playbook through this disruptive, engrossing year in American politics. 2016 will even better – glad we’re on the ride together. Drop us a line when you have news or when we can do better: [email protected] and [email protected] Have fun tonight – you deserve it. And make sure that at least one of your New Year’s resolutions involves other people, not just yourself: What’s something I can regularly do for my co-workers or the people I do life with? Then don’t talk about it – just do it. DAILY TRUMP – Union Leader p. 1, above fold, “Trump’s list gives some a surprise” – Granite Status column by Dan Tuohy: “A few Granite Staters were surprised to see their names on the billionaire’s list of town … [Read more...] about POLITICO Playbook, presented by NextGen Climate – NEW YEAR’S EVE edition: 32 days to Iowa – FIGHTING LAME DUCK-ITIS: Obama to start ’16 with big move on guns – DIGITAL ADS encroach on TV: Bush spent much to achieve little — JAMES DAVIS has a 4th girl
If you listen to people in finance, every time the market gets a little crazy, they always tell you to focus on the long term. They say it’s the fundamentals that ultimately matter. If that’s all true, which it is, then why do markets freak-out every so often? It’s because the people who cause the volatility generally aren’t the ones who are working with individual investors and families. The ones shoving the markets around are behind the scenes. They are engaged in high-risk activity that they really don’t want too many people to know about. And when it gets ugly, they are unlikely to raise their hands and say “Oops, my bad.” But their trading activity dominates markets when things get volatile. Why? Leverage. Leverage is a term in finance that means you are using borrowed money to wager on market moves. And when the market moves the “wrong” way, the leverage (borrowing) magnifies the damage and leads to the frantic behavior. The … [Read more...] about How to keep your cool when the stock market goes crazy
Wall Street suffered large losses on Thursday, with major benchmarks falling sharply after reports that the Trump administration would follow through on previous threats to impose tariffs on steel and aluminum imports. That might sound like good news for American businesses, but at a time when many industrial companies are looking at potential measures to build out new infrastructure, higher costs for raw materials could pose a problematic new wrinkle in putting their capital investment to work. Moreover, market participants fear the possibility of trade wars with key trading partners that could pose new geopolitical threats as well as cause potential harm on the macroeconomic front. Bad news hit several stocks as well, and L Brands (NYSE: LB), Colony NorthStar (NYSE: CLNS), and Box (NYSE: BOX) were among the worst performers on the day. Here's why they did so poorly.L Brands disappointsShares of L Brands dropped 14% after the parent company of Victoria's Secret and Bath and Body Works … [Read more...] about Why L Brands, Colony NorthStar, and Box Slumped Today