Quiz:Are You Ready To Become An Entrepreneur?
December 28, 2012 Leave a comment
Take the quiz below to figure out if you are ready to quit your job and become a full time entrepreneur.
Life-Style Design
December 28, 2012 Leave a comment
Timothy Ferriss ,an entrepreneur and angel investor,in his bestseller The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich talks about “lifestyle design”.He repudiates the traditional “deferred” life plan in which people work grueling hours and take few vacations for decades and save money in order to relax after retirement.He advocates mini retirements instead.His ideas make sense because the present is our only reality.While it is great to provide for the future, what about those of us who will not be round in the future or might not be as fit and able tomorrow to do the things we really want?Also happiness is as transitory as time and neither can be saved up for the future.
He advocates the acronym DEAL .It stands for Definition, Elimination, Automation, and Liberation.
Definition means figuring out what you want, getting over your fears, seeing past society’s “expectations”, and figuring out what it will really cost to get where a person wants to go.And he shows us how it doesn’t cost so much to have and do the the things we want as long as we think flexibly.As he puts it:The rules of reality can be bent. It just requires thinking in different terms. Read more of this post
Liz Pulliam Weston On Planning For Emergencies
December 28, 2012 6 Comments
I like to emphasize financial flexibility, rather than dictate a set dollar amount. I think you should look at all your available resources, including cash in the bank, available credit and your “Plan B” options. Is there another earner in your household? How secure are his/her job prospects? Do you have friends or family who could help you out if your back was really up against the wall?
You also need to look at your overhead and how easily you could cut back if necessary. If you’ve got huge mortgage and car payments, for example, you have less flexibility than if you would if your “must have” expenses-shelter, food, utilities, insurance, child care, minimum loan payments-total 50% or less of your after tax income.
The people who are most vulnerable right now are the ones who spend every dime they make on their overhead and who really don’t have a Plan B. There’s just no wiggle room. If you’re a dual-income household and both work in the same troubled industry, or for the same firm, heaven forbid, you’re really on the edge unless you have a fat wad of cash in the bank.
Personally, I’m most comfortable when I have access to cash and credit that equals at least a year’s worth of must-have expenses. I think most people should try to shoot for at least three months’ expenses in cash alone, but unless you’ve already lost your job I wouldn’t stop saving for retirement or paying down credit card debt just to boost that emergency fund.
Is Saving In Silver Better Than Saving In Gold ?
December 27, 2012 3 Comments
Silver is the poorer cousin of gold and shows more volatility.However it is also considered a precious metal.So how does it compare to gold as a savings/investment?Where would you be today if you had bought and held silver for the last three decades?Follow this link to your answer :Long Term Returns From Silver Vs SENSEX
So silver would have given you marginally better returns.However you would have had to stomach its greater volatility.And worrying for 30 years just doesn’t seem worthwhile.
Also like gold, silver returns adjusted for inflation are pretty underwhelming and gets beaten by equity returns by a big margin .And in times of negative real returns silver like gold shoots up in price.
How Well Would You Have Done if You Had All Your Savings In Gold?
December 27, 2012 3 Comments
Today financial planners and daily wage earners speak of ” investing” in gold.In fact,given the dream run of gold in the last decade,most people can’t see past gold.Never mind that between last Diwali and this one there was no substantial increase in the price of the metal and that there was a fall in price in between and then it struggled to rise for a while.
There is no denying that in the dark days after the stock crash of 2008 and the poor economy thereafter, gold provided good comfort for all of us who worried about our financial health.And the fact that gold price rose fantastically in uncertain times was the icing on the cake.
Also gold has helped us hedge against inflation.Here is the link to an older post.
Gold also does superbly well when the equity markets and debt markets are giving negative real returns.
So should you just have all your savings and investments in gold?Far from it!Aside from the wealth tax you might be forced to pay every year on an asset that will give no returns till it is sold, at which point it might attract capital gains tax,keeping your money in gold over the last three decades wouldn’t have given you stellar returns.Check out the chart here:Long Term Returns from Gold Vs SENSEX While gold keeps up with inflation,just buying and holding it for long is unlikely to make you rich any time soon.So be certain to enjoy the touch and feel and beauty of your gold.
wealthymatters 