25 April 2019 FT — Articles to Read

25 April 2019


Question: According to MSN: Money, if one is feeling overwhelmed with debt, what are fourteen (14) ways to get your financial life in order?


US most at risk from tariffs increase, says ECB – Pg. 3

–          An ECB paper published yesterday found that if President Donald Trump’s administration were to raise tariffs and other barriers on imports by another 10% – and other countries were to retaliate – growth would drop more sharply in the US than in either the euro area or China

–          In retaliation, Brussels has warned that American state support to Boeing could result in punitive tariffs on US products from hazelnuts to tractors

–          The ECB’s research found that after one year of heightened trade tensions US gdp would be 2% lower than the baseline expectations


Fund managers’ bearish bets short-circuited by easy money – Pg. 19

–          Carvana, one of the US’s most shorted stocks, has doubled its share price so far this year, stinging funds that had doubted the prospects of the self-styled “Amazon of used cars”

–          …tough it is to bet against listed companies in an era of easy money

–          Shorting – which involves borrowing shares, selling them in to the market and then buying them back at what funds hope will be a lower price – is “one of the hardest and most complex aspects” of investing and “will cost you a lot if you get it wrong”

–          In theory, the shorts should be due a revival.  Monetary easing has helped keep alive some companies that would have died without access to cheap finance.  The ending of QE should mean greater sifting of stocks

–          But correlations have been falling in recent years and, while it picked up sharply in the recent market rally, it is still just below its post-crisis average


Answer: (1) Change your mindset; (2) Get a clear picture of how much debt you actually have (Prof Note: Most people run from this.  Identify, Quantify, Mitigate!); (3) Consider consolidating your debt; (4) Track your monthly spending; (5) Eliminate any subscription services you do not really use (Prof Note: My phone interest was/is out of control, i.e. $600.00/mo.  I may have found a solution to bring it down to $300.00/mo.  Note I have a lot of special issues due to remote locations); (6) Eat out less (Prof Note: No $3 drinks…H2O); (7) Reduce your cable and/or phone bill; (8) Stop paying for things with a credit card (Prof Note: Completely disagree!  Do not lose the points…use financial discipline); (9) Develop a budget; (10) If you do not have enough income to pay off debt in a reasonable timeline, find new income streams; (11) Sell household items you do not need; (12) Check in on your progress every week; (13) Find an accountability partner (Prof Note: I have several peers and we call to cry about expenses.  CD, JK, and I had dinner a few weeks ago.  The first 38 minutes of dinner conversation were us comparing Septic nightmares and the corresponding cost(s).  Find support!); (14) Once you have paid down your debt, start prioritizing saving (Prof Note: think “investing”)