10 May 2019
Question: According to MSN: Money, what are sixteen money wasters which prevent so many American’s for saving for retirement?
Barbados creditors fume at ‘absurd’ $27m advisory fees for boutique firm – Pg. 1
– A little-known UK advisory firm stands to make about $27m from the restruturing of Barbados’s $7bn of debts – ….
– Barbados’s debt came to around 160% of GDP last year, one of the highest levels in the world
– Few Caribbean debt restructures have paid out fees in the tens of millions to financial advisers in recent years. For example, Citigroup earned $3m restructuring Jamaica’s $9bn of debts in 2013…
Zuckerberg’s power must be checked, says Facebook co-founder – Pg. 14
– One of Facebook’s co-founders has called for the social network to be broken up by regulators, arguing that Mark Zuckerberg’s “unchecked power” has created a monopoly and given him “unilateral control over speech”
– Advertisers have not been deterred from using the platform: the group posted a 26% rise in first-quarter revenues last month, largely from advertising, and shares have risen more than 40% in the year to day, …
Wall Street’s safe bet on trust banks turns risky – Pg. 14
– Their core business of global custody is coming under pressure as customers seek lower fees for services and higher yields on deposits, and the more diversified JPMorgan Chase gains share
– Customers are struggling to deal with the rise of low-fee passive investments strategies. Money managers pay the trusts a tiny fraction of a percentage point on the assets moved or held, but as the managers’ margins are squeezed, they have pressed the trusts for ever lower fees
– The end of the Federal Reserve’s rate-raising cycle poses problems for the trust bansk. Yields on loans and bonds stop increasing while deposit rates, which tend to lag, continue to rise. The effect is pronounced at the trust banks, as they have few, if any sticky retail deposits.
– The main strategy of the trusts in the face of the pressure on revenue has been to take out costs while offering more services to clients (Prof Note: Banks are notorious for adding costs to customers in the form of fees.)
Norway breaks from pack with rate rise plan – Pg. 19
– Norway’s central bank, having held its key interest rate at 1%, indicated yesterday it would tighten its monetary policy as soon as next month
– In contrast, Sweden’s Riksbank sounded a cautious tone earlier this week, pushing the Swedish krona to its lowest level against the euro for nearly a decade. The krona lost some 8% against the dollar and more than 5% against the euro this year.
Answer: (1) Tattoos (Prof Note: My rule, if I can see it, I can ask about it. I do believe there needs to be protection similar to hand gun purchases, i.e. 24-hour rule/7-day rule. I am also amazed at the cost when I ask about people’s ink. However, I do respect freedom of expression. My motto: think before you ink!); (2) Vacations (Prof Note: It is imperative to be mindful of cost. I have seen so many at Four Seasons Nevis appear so stressed. I have heard the stories of angry guests. I attribute it to the cost and the stress it causes.); (3) College (Prof Note: I worry the value of education no longer exists. I question the need for all the administrators. I question the “expertise” of professors lecturing from textbooks written by others. I think there is much value in learning a Trade. College is not a panacea and it has a high cost that can require payment for decades.); (4) Restaurants (Prof Note: $3.00 for a drink. No thank you! I will have water!); (5) Opportunities Lost (Prof Note: Employer match on 401(k), etc.); (6) Transportation (Prof Note: Location makes a huge difference. On Nevis, a car is all you need. In DC, I feel compelled to drive a “nice” car. But, do you really need that “nice” car?!); (7) Credit cards (Prof Note: used correctly they are a valuable financial tool. Used incorrectly and one find’s themselves paying 18.0%+ in interest); (8) Lottery (Prof Note: I get the probability. But the ticket also provides hope. Hope is good. Just do not be excessive and make lottery tickets your retirement “investing”); (9) Clothing (Prof Note: I still remembering asking a woman in one of my Wealth Management classes the cost of her jeans. She said, “$200”. I pulled up The Gap on line and found a pair for $20. I’m just say’n…); (10) Shoes (Prof Note: OMG, a student two years ago in one of my finance classes wore a $700 pair of sneakers. Now, they were nice and flashy but $700?!); (11) Tchotchkes and stuff (Prof Note: When I travel I try and purchase one nice “Tchotchkes” from the trip. A memory of the destination. However, I work at no clutter. It is a balance.); (12) Failing to look ahead (Prof Note: Always, always, look at retirement and tomorrow. Always stress-test the family budget for job loss, illness, etc. We do these stress-tests in businesses, do them in the home as well.); (13) No backup plan (Prof Note: If you are from a wealth family and your backup plan is to call Aunt Ida, no issue…wish I had an Aunt Ida. If you do not have an Aunt Ida, be prepared.); (14) Holidays (Prof Note: Holidays bring happiness, just fight the debt they may also bring!); (15) Toys (Prof Note: Ask yourself if you are purchasing the toys for the child or for yourself?!); (16) Haircuts (Prof Note: A close mate’s lady friend just spent $400 on a haircut. That is half the ticket cost to Nevis! I just checked online. The Flowbee is still available and a viable solution for the home haircut. Bring back the Flowbee!)