Tag: Prof Note

24 December 2018

 

Question: According to MSN: Money, what are eight (8) surprising things nobody tells you about retirement?

 

For the UK homeless this Christmas will be cruel – Pg. 8

–          Some 277,000 people overall are considered homeless, …a figure that has risen 120% since 2010

–          This includes those living in temporary accommodation, in hostels or sofa surfing in the houses of friends

–          It is not only the unemployed, victims of violent abuse, drug addicts and people with mental health issues who are finding themselves without a roof over their heads.  It is also people in work but earning wages that have not kept up with soaring rents

–          The problem is at once structural and cyclical.  Its roots lie in the 1980s, when the late prime minister Margaret Thatcher pushed the act through parliament that gave tenants the right to buy the municipal housing they rented – at a steep discount….the snag is that the amount the Treasury returned to local councils to restock the supply of housing has been eroding ever since

–          The UK has now arrived at the perverse situation where the government will spend….1.1% of national income (on housing benefits)…most of this will go into the pockets of poorly regulated private landlords

 

The crisis of modern liberalism is down to market forces – Pg. 9

–          Smaller comp[anise pay more taxes relative to their income than large multinational corporations

–          The economic policies that followed the financial crisis ended up widening income and wealth differences

–          …Margaret Thatcher’s successful brand of entrepreneurial capitalism in the UK in the 1980s.  Through privatization, she turned ordinary savers into shareholders.  Through the sale of council houses, she turned tenants into property owners

–          …household income after housing costs stagnated for the 60% of households towards the bottom of the income distribution between 2002 and 2015

–          The main constituency backing the Thatcher revolution in the 1980s was the C2s – the demographic classification for skilled working class people.  Thatcher looked after the median household.  Her successors first lost the middle classes, and then pretended to be shocked by events such as Brexit

–          Any system that leaves behind 60% of households will eventually fail.  It is the ultimate irony: liberalism is failing because of market forces

 

Answer: (1) Housing will remain your biggest expense; (2) Work will not end – it will simply change; (3) If you’ve never volunteered before, you won’t start in retirement (Prof Note: I have always believed this….you are who you are); (4) Retirement can be lonely for single men; (5) Health issues likely will catch you by surprise; (6) As you grow older, you will feel younger; (7) Your early golden years might not gleam as you had hoped (Prof Note: As I discuss with older individuals, this is a true.  However, I will also state that for some, it is better than anticipated but this is a minority); (8) Initial disappointment will give way to later satisfaction

20 December 2018

 

Question: According to MSN: Lifestyle, removing these 31 things from your life will make you happier and more successful?

 

Fed makes fourth rate rise of year but signals slower pace in 2019 – Pg. 1

–          The US central bank lifted the target range for the federal funds rate by another quarter point to 2.25-2.5%….but it also pared back its forecasts for further increases and indicated that it is less certain about future moves

–          …it is less sure where rates will go next

–          Core inflation has also remained tepid, at 1.8%, lessening the pressure for more rises

–          The so-called dot plot of rates forecasts by Fed officials now shows two quarter-point increases in short-term rates in 2019, down from three in the prior forecast.  Another single rate rise may follow in 2020…leaving the midpoint of the target range at 3.1% – the apparent peak of the rate-rising programme

–          The central bank trimmed its forecasts for growth next year to 2.3% from 2.5%, while leaving its unemployment prediction for 2019 unchanged at 3.5%

 

Investors push for 2030 end to coal-fired generation – Pg. 11

–          The world has already warmed by about 1C, largely due to emissions from the burning of fossil fuels.  Investor pressure is growing on the energy sector to take responsibility for its contribution to climate change

–          Big investors have stepped up their efforts in recent months, underpinned by the belief that institutional shareholders possess the greatest clout in pushing companies to change

 

Answer: (1) Comparing yourself to others (Prof Note: I do believe this can be healthy, to an extent.  For example, professionally in terms of skills and education.  Just needs to be done in a healthy manner.); (2) Creating unrealistic expectations of yourself (Prof Note: When I finally accepted I would never dunk a basketball, it was a relief! J); (3) Your social media obsession (Prof Note: Never understood this and I am NOT on Facebook); (4) Bad spending habits (Prof Note: I often think, “What am I really getting for this expenditure?!”); (5) Far of the unknown; (6) Living in the past; (7) Putting off a vacation (Prof Note: Travel, in my opinion, opens one’s mind and heart); (8) Your packed schedule (Prof Note: make time for the sunset(s).  You only get so many in your life.); (9) Unhealthy relationships (Prof Note: This should be expanded to professional); (10) Waiting for the perfect moment; (11) The need to be in control of everything (Prof Note: I have recently begun working with several HIGHLY qualified and respected individuals in modelling.  What has happened?!  The pro formas constructed have taken a giant leap forward.); (12) Relying on others to make you feel happy and fulfilled; (13) Avoiding getting out of the house (Prof Note: Sun on one’s face is a happy feeling!); (14) You need to have the best things (Prof Note: Be blessed and happy with what you have.  My broken iPhone with the cracked glass works just fine!); (15) Your hesitation to indulge (Prof Note: Sure, I’ll have that shot of vodka!); (16) Feeling sorry for yourself (Prof Note:  I think self-reflection is healthy…just do not let it bog you down); (17) Fear of failure (Prof Note: A great skill is learning to get back up!); (18) Grudges (Prof Note: I have debates with my peers about this.  I think grudges are healthy as some things, e.g. lying to students, are unforgiveable.); (19) Worrying what others think of you (Prof Note: I stopped cutting my hair when my second book was published to be the “crazy” author.  I perceive that I am treated differently, in a good way, in general.  People are more open to just starting conversations with me at random.); (20) Your disorganized lifestyle (Prof Note; I find that organization does breed happiness); (21) Controlling others (Prof Note: Embrace others and accept them for who they are.  If in a professional setting, state your peace and seek your happiness!); (22) Jealousy (Prof Note: Respect and admiration are healthy.  Find happiness in the success(es) of others); (23) Blaming others for your mistakes (Prof Note: Always take responsibility); (24) A yearning to fit in (Prof Note: This is one of the great things about Nevis.  Basically everyone is a wack-a-doodle and everyone is embraced for their originality.  Be yourself!); (25) Overanalyzing situations; (26) Friends who are not there for you (Prof Note: A close peer that was a Federal Guest of the prison system told me that one of the benefits of going to prison was it separated acquintances from true friends.); (27) Resisting change (Prof Note: I will admit that I resist, especially with technology.  I still believe, I fear this will bite me in the future, Facebook is a fad!); (28) Being afraid to be yourself (Prof Note: Try talking to absolute strangers in retail establishments and when out.  It is amazing the number of nice people that actually talk back. J); (29) Holding onto items you do not need (Prof Note: I am NOT getting rid of my sea containers!); (30) Avoiding your problems (Prof Note: I have been blessed with only a few MAJOR problems in my life.  However, when they have occurred I ran directly at them, full steam.  All were resolved to my benefit but only because I addressed them head on (and dedicated resources to their solutions)); (31) Worrying about missing out (Prof Note: Just because you were not at particular place, does not mean you cannot enjoy the stories about the experience told by friends and family!)

18 December 2018

 

Question: According to MSN: Money, what are 40 money habits that can leave you broke?

 

China economists dare to disagree with Xi’s vision – Pg. 3

–          Unlike the largely anonymous summer carping about Mr Xi’s elimination of term limits in March, which positioned him to be president for life if he chooses, in recent weeks economists have argued publicly whether the president’s rapid centralization of power over the past six years would enhance or construct the next phase of development

–          Despite the most repressive political culminate in Beijing since the 1989 Tiananmen Square massacre put Deng’s reforms on hold for three years, an increasing number of Chinese economists have dared to disagree openly with policies associated with Mr Xi

–          Edmund Phelps, a Columbia professor and 2006 Nobel Prize winner for economics, added: “China needs broad innovation from ordinary people with the government can’t help much with that”

–          Such arguments have seemingly been bolstered by slower economic growth in China and Donald Trump’s punitive tariffs on Chinese exports, which have depressed market sentiment and business confidence.  As China’s stock markets declined a further 8% over the past three months, falling share prices forced many private sector companies to sell shares pledged as collateral against state bank loans

 

UK’s student funding is overdue radical reform – Pg. 8

–          The aim of bringing more students into higher education, via loans repaid on future salaries, was sell intentioned.  But the poor design of the system has resulted in rising costs and questionable outcomes from some graduates

–          The office for National Statistics announced it will put the long-term costs of student loans on to the government’s books.  That means 12.3bn (sterling) will be added to the annual deficit – wiping out much of the Treasury’s fiscal headroom and potentially breaching the chancellor’s “fiscal mandate” to keep borrowing under 2%

–          Student loans are higher as a percentage of the UK’s GDP than in comparable countries, such as Australia

–          The ONS will now separate the UK’s loan book into two: loans that will be repaid will be counted as genuine government lending, while those to be written off will be counted as government spending.  This clarity is welcome, if overdue

 

US financial stocks slide into bear territory as growth worries intensify – Pg. 17

–          The S&P 500 financial sector index fell as much as 0.9% yesterday as volatile trading, leaving it down almost 21% form a late January peak

–          Although the US economy has remained in robust shape, the bond market has already begun to anticipate a weaker picture for both growth and inflation.  Central to banks’ fortunes is the yield curve, which illustrates the differences between short-term and long-term borrowing costs

–          The yield on the benchmark 10-year US government bond has fallen from 3.25% in early November to 287% while the drop in the yield on the two-year Treasury has been cushioned by expectations that the US Federal Reserve will tomorrow raise its official interest for a fourth time this year

–          The gap between two-year and 10-year Treasury yields this month hit its narrowest since 2007

 

Answer: (1) Your App addiction (Prof Note: small dollars add to large dollars); (2) Not checking your credit report (Prof Note: Look what happens to mortgage rates with lower credit scores); (3) Having wine with dinner (Prof Note: a soft drink is often $3.00); (4) Leasing your car (Prof Note: There are cases to lease but remember that equity is not being built); (5) Ignoring your 401(k) match (Prof Note: “Free” money); (6) Going out for lunch; (7) Using store credit cards; (8) Overdrawing your account; (9) Keeping your gym membership; (10) Accepting bad checks; (11) Not having health insurance, (12) Ditching your change; (13) Not checking in with your partner; (14) Smoking cigarettes; (15) Signing up for a Premium auto loan; (16) Falling for a bait-and-switch (Prof Note: A 50% sale still means one is spending!); (17) Not using a budget; (18) Making impulse purchases; (19) Carrying credit card debt; (20) Paying yourself last; (21) Drinking fancy coffee; (22) Not keeping an emergency fund; (23) Buying groceries without a list; (24) Not tracking ‘invisible’ expenses; (25) Letting FOMO get the better of you; (26) Paying for monthly subscription services; (27) Splitting lunch with a friend; (28) Not automating your payments (Prof Note: NOOOOO…pay all bills with checks on a set schedule.  This way one does not lose track of expenses); (29) Keeping up with the Joneses; (30) Increasing your standard of living (Prof Note: Fight the creep!); (31) Window shopping; (32) Assuming life will always be like it is today; (33) Not keeping track of your cash flow; (34) Not asking for a raise; (35) Your brand loyalty; (36) Going to happy hour (Prof Note When I worked for Booz*Allen my boss came to me one day stating that it would help my career as a “Boozer” if I attended more social functions.  I explained to him that while I was happy for the advice, on a $35,00/year salary, a drink at a bar was at the cost of affording dinner.  When he understood the consequences, he never mentioned again and apologized for being insensitive); (37) Using an out-of-network ATM; (38) Not planning for expected needs; (39) Neglecting maintenance; (40) Not allowing yourself some wiggle room

17 December 2018

 

Question: What is the most expensive zip code in the U.S.?  Median Sales Price for a home?  Median household income?

 

US credit markets dry up as rate rises and volatility rattle investors – Pg. 1

–          US credit markets are grinding to a halt, with fund managers refusing to bankroll buyouts and investors shunning high-yield bond sales as rising interest rates and market volatility weight on sentiment

–          Not a single company has borrowed money through the $1.2tn US high-yield corporate bond market this month.  If that drought persist, It would be the first month since November 2008 – when global credit markets froze up after the collapse of Lehman Brothers – that not a single high-yield bond priced in the market (Prof Note: This is profound…pay attention!)

–          A prolonged period of low interest rates since the financial crisis a decade ago has seen companies binge on cheap debt

–          As prices in loan market have fallen, banks that were committed to financing highly leveraged buyouts this year have struggled to find investors to back the deals

 

Wall Street banks to reduce bonuses as tough fourth quarter hits earnings – Pg. 13

–          ….low single-digit increases to their bonus pools

–          Investment bank revenues – including sales and trading and advising companies on deals and capital raising – for the top five US banks were up around 8% in the first half of the year, driven by booming equities markets.  They rewarded banks with a 16% rise in equities trading revenues and a 20% increase in fees for advising clients on IPOs, …

 

US retail shares face sharp sell-off – Pg. 14

–          Shares in US retailers are on course for their biggest quarterly sell-off since the financial crisis, putting the sector at the sharp end of Wall Street’s mounting concerns about the global economy and President Donald Trump’s trade wars

–          …S&P’s index of 95 leading listed retailers has dropped 17% so far this quarter

–          Concerns include retailers being forced to shed stock at hefty discounts, in part because they have accelerated shipments through ports to avoid being subjected to higher tariffs, which the Trump administration has since put on hold

–          The sell-off has erased all gains from earlier this year, when investors drove a rally in retail stocks on signs that a strong US economy and tax cuts were helping bricks and mortar companies deal with the online threat

–          Weak economic data from Europe and Asia – figures on Friday showed retail sales in China grew at the slowest pace in 15 years in November – have added to fears about a global downturn

–          Amazon shares have dropped 20% for the quarter so far, paring its market capitalization to $778bn

 

Answer: 94301, Palo Alto, CA; Median Sales Price: $3,750,000; Median Household Income: $146,488