There is a dispute over how you should be investing your money and Warren Buffett has lined himself up as the antagonist of hedge fund managers.
Before jumping into the fight, a quick primer on active and passive investing: Active funds are actively managed (and clearly creatively named) funds in which the fund manager tries to pick investments that will perform better than the market. Passive funds (or index funds) are funds that simply try to match an index rather than beat it. For example, instead of trying to pick the companies that will outperform the market, a passive S&P 500 index fund will purchase every company in the S&P 500.
Warren Buffett, the third richest man in the world, is a big believer in passive investing for the average investor. While he takes an active role in managing the investments of his company, Berkshire Hathaway, he believes that the vast majority of people are better off placing their money in low fee index funds and investing passively. Continue reading “Buffett’s Bet”
Credit scores are an important part of modern life, and yet most people don’t actually know how they work. They impact the interest rate you pay for loans, whether you can rent an apartment or get a job, and whether and at what interest rate a bank will give you a mortgage. Plus, people are 40% more willing to date you if you have a higher credit score.
So how does it work? Continue reading “The Ultimate Guide to Your Credit Score”
Americans have a debt problem. The average American household has $90,336 in debt. ($5,517 of this is credit card debt, $7,871 is from auto loans, $9,153 from student loans, and $60,700 from mortgages). The average borrower owes 155% more than what they think they owe.
We also have a math problem. The average credit card interest rate is 17.55%. The average savings account interest rate is 0.06%. The expected return in the stock market is, depending on what time period you measure by, between 7% and 10%. Your credit card debt is costing you far more than your savings are earning you.
In addition to saving you money and giving you more cash flow and freedom to do what you want with your money, getting out of debt can help relieve stress and anxiety in your life.
Let’s take a look at the numbers and figure out the most efficient way to pay off your debt. Continue reading “How to Efficiently Pay Off Your Debt”
Let me just say up front that I budget. Don’t pretend to be surprised. I know I’m a nerd.
But I won’t judge you if you don’t.
What I do want to make sure you do is make a conscious decision about how to handle your money. If you’re ignoring budgeting because you think it will take too long or be too constricting, then your money may be leaking out in places that you don’t want it to.
Whether you decide to budget or not, here’s what you should know before deciding how to apportion your money. Continue reading “Budgeting (Or Not)”