6 October 2018 FT — Articles to Read

6 October 2018


Question: According to MSN:Money, what are 6 silly tidbits of Money Advice that will make you poorer?


US jobless rate at lowest since 1969 – Pg. 1

–          The US unemployment rate has fallen to its lowest level since 1969, underscoring the strength of the country’s economic growth and giving fresh fuel to a week-long bond-market sell-off

–          US Treasury yields hit multiyear highs yesterday as investors predicted a hardening of the Federal Reserve’s determination to push through further rises in short-term rates after another quarter-point increase last month, with the next move widely expected in December

–          The 10-year Treasury yield, which had been climbing earlier this week, rose nearly 5bps to 3.24% – the highest since 2011

–          The jobless rate dropped to 3.7% in September, slightly lower than forecasts of a 3.8% rate.  Non-farm payrolls rose by 134,000 in September…


US business – Pg. 8

–          …GE’s only strategic mis-step….emblematic of two of the company’s flaws: a weakness for dealmaking, and an inability to respond effectively to a changing market

–          …original member of the DJIA at its creation in 1896, has lost more than 80% of its market capitalizations since 2000


Italy’s deficit plans push sovereign yields higher – Pg. 15

–          The government’s plan targets a budget deficit of 2.4% of GDP in 2019, to be gradually reduced to 2.1% in 2020 and 1.8% in 2021, …


Answer: (1) Credit cards are evil (Prof Note: Used responsibly they can provide rewards, e.g. flights); (2) Following a rigid spending plan will set you free (Prof Note: You have to live….a little!); (3) sign up for life insurance – or else (Prof Note: you are more likely to be disabled during your career than to die!); (4) 10% is the sweet spot for retirement contributions (Prof Note: 10% is a good target but must be focused); (5) You should buy a house because it is a good investment (Prof Note: What I do like about traditional mortgages is that they are forced savings vehicles); (6) Home equity loans are a great way to get out of a hole (Prof Note: Be smart and understand what one is doing!  I am a huge proponent of home equity line usage but ONLY AFTER paying off the house.  Then, using the HELOC’s for capital improvements, etc.  Remember: $1.00 must produce $1.00+ or you are going backwards!)