Browse published articles attributed to Jamie Bush, with full-archive search.
Ever wonder what happens to your money when you put it in the bank? How do they pay you interest on your savings account? I'm about to reveal all the answers and I bet you will be shocked about what happens to your money and your loans with banks after the deal is done.
The following may shock you but it's based on many focus groups and years of research conducted by Thomas Stanley. He has dedicated much of his career to studying the traits and habits of people who have $1 million or more net assets. This is vastly different from people who earn $1 million or more. Net is the amount of money left over after debts. So let's get to the lists. All data is from the book Stop Acting Rich...and Start Living Like a Real Millionaire by Thomas J. Stanley (2009). Cars: Most Recent Acquisition 1. Toyota (Camry, Avalon, Highlander, Sequoia, Sienna)r
Ben Be anke is so busy computing academic formulas that he forgot to go shopping and take a look at what’s really going on out there. He is famously called helicopter Ben after he made the statement that he could drop money out of helicopters to fight deflation. Is that a joke? This guy has a PhD in economics and has studied the great depression for the most part of his career, yet he thinks these tactics will work when there are clear examples in history that prove otherwise. You can never print money forever, period.
Understanding types of debt is crucial. Good debt is debt that you have that pays for itself. For example, a rental property or business that you own pays for the loan you took out for it; your money is not going into it. This is the defining line. Bad debt is just about any debt that most of us have and includes credit cards, mortgages, loans for school (contrary to what some of us may have been told), cars, etc. I’m not saying that you shouldn’t take out loans for school or a house but just that it’s bad debt and should be paid off quickly.
Bonds, types of bonds and how they work can get confusing. I’ll do my best to describe what I know about this area of investing. There are different categories of bonds that you can invest in. All bonds carry a maturity date and coupon rate. The coupon rate is the annual interest rate paid and can be compounded annually, semi-annually, monthly or daily while the maturity is when the bond expires. 5, 10 and 30 year maturities are common. Most people are familiar with US government bonds, also called treasuries.
Studying the price history of gold and silver is fascinating. For over a hundred years the value of an ounce of gold was $20 and an ounce of silver $1. Silver historically has a ratio of 20:1 to gold, so eventually it should match that again - meaning the price should increase. At today's gold prices, we should expect that silver would be priced around $80 per ounce. There are various theories on why this is not the case including demand and industry fluctuations, the US leaving the gold standard and market manipulation.
When we talk about investing, most people think that there is only one way to do it. If you asked 100 people on the street what you need to be an investor, almost all of them would answer with money. While that is half correct, it is only one of the correct answers. The other one is less talked about. Time.
Debt is bad and you want to get rid of it right away. Nothing destroys lives, marriages and creates more stress than being in debt. The way out is not hard in theory but requires a life change. This is usually were people pass or fail; many times they are unwilling to make a lifestyle change to save their financial future. When you want to buy that Lexus, remember: the ancient Greeks and Romans walked around in sandals and wore robes and they were just fine. Cars are luxury items, so be a smart purchaser. Remember that expensive doesn’t always mean better quality.
Options are higher risk futures that you can buy and sell against stock you own or don’t own. Investors have made and lost fortunes trading options. Jim Cramer made enough in one options trade to quit Goldman Sachs and start his own hedge fund. I only want to mention it briefly because it can be a powerful tool as a hedge or even to add gains on stocks you already have. There are two types of options in stock markets which is what I’ll be focusing on. They are calls and puts and you can either buy or sell them.
1. Be your own boss, live and work how you choose and make your own hours: This one is obvious but it's funny how many people don't really believe this. I know many real estate investors that take multiple vacations a year and brag about a 4 day work week. They generally also work part time because they realize that they can delegate to other more experienced people for things they're not good at. 2. Become more intelligent than almost everyone else:
Ever hear the story of the guy who was rich one day and homeless the next? He wasn't diversified. Ask all the former millionaires that invested in just tech stocks around 1998 and boasted about their wealth before they watched it go to $0. You might think this is uncommon, but it happens more often than you might think. Madoff and others convinced people to give them all their retirement savings and promised them unbelievable returns only to lose it all. Others bet it all on Enron stock thinking it couldn't go down only to lose everything.
I expect many of you are hearing about the events in Europe and wondering what the big deal is. There were 2 major events that happened in Europe last week, the French and Greek elections. The socialist parties gained major victories which signaled the end of austerity measures. This spells the end of Sarkozy, one of Germany's last allies. Bailouts are highly unpopular in the German mindset and Merkel already took massive criticism for the earlier bailouts that didn't include social program reform. Now that Sarkozy has lost, Germany will be alone in the austerity fight.
From the time we are born we’re told that making mistakes is bad. When we’re young, we’re scolded for misbehaving. When we get older and start taking exams we are punished for getting the wrong answers and given a bad grade. Our society views good grades as success and you get good grades by not making mistakes. The problem with this is that we learn by doing and when we’re punished for making mistakes we can’t grow. We become afraid to do for fear of making the mistakes which we’ve been conditioned against.
There’s nothing better than owning your own home. Not only is there a sense of pride in owning real estate but if you take care of it, there are few returns that can match it over the long term. For most people, their primary residence will fall under this category. If you don’t own a home, now is a good time to lock in low interest rate mortgages. Find a way to buy something even if it’s a one bedroom condo. Real estate is one of the most consistent performers over time and will always be in demand.
Did you know if you invested in rare coins in 1970, you could have made a 7135% return on your investment? There are many stories in which rare coins purchased by savvy investors (in the 1950's) using only a few thousand dollars, realized hundreds of thousands and even millions of dollars at auction many years later! Almost every country in the world has minted coins. You can collect ancient Roman and Greek coins or more modern US coins, the choice is up to you. Within each country, coin designs have evolved and changed over the decades.