I have been a Quicken (and Microsoft Money) user off and on over the decades. This was a great program that has gotten worse over time. The last time I used it in 2020-2021, I kept having to manually fix download errors. At one point, Quicken told me that I was a Quadrillionaire! (Take that, Musk!) The one Quicken feature that I really liked was the Morningstar X-Ray. I switched to Personal Capital last year and bought a premium subscription to Morningstar. The combined cost is only slightly more than a Quicken subscription, but the glitches are gone and the quality of the data and analysis are leaps and bounds above Quicken.
Who Will Buy Bonds the Fed No Longer Wants?By Marcus Ashworth and Mark Gilbert | Bloomberg
April 8, 2022 at 11:25 a.m. EDT The rate quoted was actually 3% in that article. The idea is that every 1% increase adds $300 billion annually to the deficit. Again, I am also questioning that assertion, because that would assume that all the existing debt comes due at once. Some lower yielding bonds won't mature for decades. So rates would need to rise well above 3 percent. Perhaps even 10% before this should become an immediate concern. That should give the Fed some room to increase rates substantially.
Luck aside, the greatest lesson here is that even with bad investments, like high cost mutual funds, the most important thing is to keep contributing. Too many people obsess over asset allocation and not enough on savings rates. Congratulations on winning the game.
I have seen some commentary recently that the Fed cannot increase rates over 3.5% because at that rate the US Government becomes insolvent. But wouldn't that only apply to new bonds issued? The vast majority of the US debt servicing would still be well below 3.5% for medium and long term bonds. So I assume rates could go well above 3.5% without causing a default. And even then, the US could avoid default by raising taxes.
This holds true for many of the current self-help financial gurus on TicTok and YouTube. When I see how people prefer the likes of Hill and Kiyosaki over Graham and Malkiel, it is not unlike the high school kid on TicTok giving options trading advice and racking up millions of followers versus measured and well researched advice from Morningstar or Humble Dollar that might garner a few hundred views. I guess the idea of becoming a Kardashian in a week is more appealing than building financial independence over decades of sacrifice and hard work.
As someone who just put three kids through college, let me explain the advantages of credit cards. First, you do not need to cosign. There are secured and college credit cards for people with no credit history. Secured cards require a $500 deposit and you must top it up each month. After less than a year, you can call them and convert it to a non-secured card. By the time my kids graduated, they each had nearly 800 credit scores. One got a job traveling the world, and immediately got an American Express Platinum card, so he gets free airport lounge access, meals, express check in, free baggage, express check in, hotel discounts, and tons of other benefits. The other one has a domestic job and got an AMEX Blue card for 6% back on groceries. The third one still has her college cards, but is in her final year and will likely upgrade to better cards when she graduates. All three are fantastic budgeters and are into this minimalist thing. Credit has not ruined them, it had taught them discipline, partly because they are obsessed with keeping their credit scores high by paying their cards each month and building their savings.
I own some alt coin that I received a few years ago from an online promotion, yet I still say it is speculation. I see it in the same light as my Pokemon cards, stamps, and HD-DVD collection. And best of all, it takes up much less room. On the other hand, buying individual stocks "for the long run" might not be any more sensible though. Fred Schwed (Where are the Customers' Yachts?) wrote anecdotally of "a great and sagacious financier." When he dies, "the executors go through the strongbox [and find], tucked well away in the back, bundles of the most hopeless securities whose very names have been long since forgotten. Although these executors will never leave an estate worth a tenth as much as this one, they gaze at the bundles with wonder and amusement. 'Golly,' they say, 'whatever could the old man have been thinking of to get stuck with these cats and dogs?'” Maybe one day my executors will go through my hard drive and find tucked away a cryptocurrency wallet and say "what could the old man have been thinking?" If not, they will surely say it of my HD-DVD collection!
Most people have a hard time understanding this simple concept. Assuming you cannot deduct the mortgage interest and you are paying state income tax on your fixed income investments, you would need a return of over 6% to equal the return on paying down a 5% mortgage. If people want stability and guaranteed returns, paying down debt, including low interest mortgage debt, is a no-brainer. Of course, what I hear from other people's financial advisors and accountants is to keep the mortgage (or even get a cash out refinance) and invest in the stock market at all time highs. I was in a Zoom meeting recently with a mortgage broker whose client refinanced for $1 million so that her client could put half into stocks. I kept quiet since it wasn't my business, but another person commented "that's brilliant!" I was left shaking my head in dismay.
Comments
I have been a Quicken (and Microsoft Money) user off and on over the decades. This was a great program that has gotten worse over time. The last time I used it in 2020-2021, I kept having to manually fix download errors. At one point, Quicken told me that I was a Quadrillionaire! (Take that, Musk!) The one Quicken feature that I really liked was the Morningstar X-Ray. I switched to Personal Capital last year and bought a premium subscription to Morningstar. The combined cost is only slightly more than a Quicken subscription, but the glitches are gone and the quality of the data and analysis are leaps and bounds above Quicken.
Post: Quick Work
Link to comment from May 3, 2022
In football, this is what would be called a "hail Mary" pass. Fortunately, you scored a touchdown!
Post: Betting the Ranch
Link to comment from May 2, 2022
Who Will Buy Bonds the Fed No Longer Wants?By Marcus Ashworth and Mark Gilbert | Bloomberg April 8, 2022 at 11:25 a.m. EDT The rate quoted was actually 3% in that article. The idea is that every 1% increase adds $300 billion annually to the deficit. Again, I am also questioning that assertion, because that would assume that all the existing debt comes due at once. Some lower yielding bonds won't mature for decades. So rates would need to rise well above 3 percent. Perhaps even 10% before this should become an immediate concern. That should give the Fed some room to increase rates substantially.
Post: Ditching Bonds
Link to comment from April 10, 2022
Luck aside, the greatest lesson here is that even with bad investments, like high cost mutual funds, the most important thing is to keep contributing. Too many people obsess over asset allocation and not enough on savings rates. Congratulations on winning the game.
Post: Rookie Mistakes
Link to comment from April 10, 2022
I have seen some commentary recently that the Fed cannot increase rates over 3.5% because at that rate the US Government becomes insolvent. But wouldn't that only apply to new bonds issued? The vast majority of the US debt servicing would still be well below 3.5% for medium and long term bonds. So I assume rates could go well above 3.5% without causing a default. And even then, the US could avoid default by raising taxes.
Post: Ditching Bonds
Link to comment from April 10, 2022
This holds true for many of the current self-help financial gurus on TicTok and YouTube. When I see how people prefer the likes of Hill and Kiyosaki over Graham and Malkiel, it is not unlike the high school kid on TicTok giving options trading advice and racking up millions of followers versus measured and well researched advice from Morningstar or Humble Dollar that might garner a few hundred views. I guess the idea of becoming a Kardashian in a week is more appealing than building financial independence over decades of sacrifice and hard work.
Post: Wrote and Grew Rich
Link to comment from April 10, 2022
As someone who just put three kids through college, let me explain the advantages of credit cards. First, you do not need to cosign. There are secured and college credit cards for people with no credit history. Secured cards require a $500 deposit and you must top it up each month. After less than a year, you can call them and convert it to a non-secured card. By the time my kids graduated, they each had nearly 800 credit scores. One got a job traveling the world, and immediately got an American Express Platinum card, so he gets free airport lounge access, meals, express check in, free baggage, express check in, hotel discounts, and tons of other benefits. The other one has a domestic job and got an AMEX Blue card for 6% back on groceries. The third one still has her college cards, but is in her final year and will likely upgrade to better cards when she graduates. All three are fantastic budgeters and are into this minimalist thing. Credit has not ruined them, it had taught them discipline, partly because they are obsessed with keeping their credit scores high by paying their cards each month and building their savings.
Post: Budgeting 102
Link to comment from October 3, 2021
Note that the depreciation adjustments do not apply if you use the simplified version of the home office deduction.
Post: Pay as You Leave
Link to comment from August 10, 2021
I own some alt coin that I received a few years ago from an online promotion, yet I still say it is speculation. I see it in the same light as my Pokemon cards, stamps, and HD-DVD collection. And best of all, it takes up much less room. On the other hand, buying individual stocks "for the long run" might not be any more sensible though. Fred Schwed (Where are the Customers' Yachts?) wrote anecdotally of "a great and sagacious financier." When he dies, "the executors go through the strongbox [and find], tucked well away in the back, bundles of the most hopeless securities whose very names have been long since forgotten. Although these executors will never leave an estate worth a tenth as much as this one, they gaze at the bundles with wonder and amusement. 'Golly,' they say, 'whatever could the old man have been thinking of to get stuck with these cats and dogs?'” Maybe one day my executors will go through my hard drive and find tucked away a cryptocurrency wallet and say "what could the old man have been thinking?" If not, they will surely say it of my HD-DVD collection!
Post: Is bitcoin an investment or a speculation—and why?
Link to comment from August 10, 2021
Most people have a hard time understanding this simple concept. Assuming you cannot deduct the mortgage interest and you are paying state income tax on your fixed income investments, you would need a return of over 6% to equal the return on paying down a 5% mortgage. If people want stability and guaranteed returns, paying down debt, including low interest mortgage debt, is a no-brainer. Of course, what I hear from other people's financial advisors and accountants is to keep the mortgage (or even get a cash out refinance) and invest in the stock market at all time highs. I was in a Zoom meeting recently with a mortgage broker whose client refinanced for $1 million so that her client could put half into stocks. I kept quiet since it wasn't my business, but another person commented "that's brilliant!" I was left shaking my head in dismay.
Post: Invest vs. Reduce Debt
Link to comment from June 1, 2021