September 29, 2008
Don’t freak out, but it’s true I love the fact the Dow is at record lows for the year, and you should too.
I am 25 years old, lousy market performance right now means low prices now. I have a very limited stock portfolio and I am pouring money into it as fast as I can right now. If you’re a young reader and have not signed up for your company’s 401k plan, now would be the PERFECT time to start. Sure you might lose a little money now, but you’re not going to need it for twenty or more years, so let’s invest now while prices and confidence are low. In a few decades from now when you go to withdraw from your robust 401k you so wisely opened in the late 2000’s when the market was in the pooper you can thank me with a check. I just dropped some free cash into my open ended mutual fund, but more on that later.
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Posted by fubar1383
September 19, 2008
Here are my Goals for 2008:
$5000 in 401k: 104% Completed
$3000 in Savings: 20% Completed
$5000 in Roth IRA: 60% Completed
$2000 in HSA: 23% Completed
So for 2008 I understated my 401k goal. This is probably because I have to do absolutely nothing in order to complete this goal, everything is automatically taken out of my paycheck.
I overstated my Health Savings Account, mainly because every so often I spend some of the balance. So I might reach my goal of putting 2000 in the account, but the ending balance will be much less.
For my Roth I am just waiting until the markets stabilize before maxing that out for the year.
Savings of course is the hardest to reach. When I build up a nice amount I either dump into my Roth, or need to spend some of it for whatever reason.
My 2008 goals for the most part were ambitious, but not unreachable.
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Posted by fubar1383
September 17, 2008
If you have money in the stock market right now, I imagine that you are watching these events unfold with a lot of trepidation. Let’s recap some of the major headlines:
Fannie and Freddy are both under government control, which means the Feds now hold 42% of all mortgages…. Ouch.
Bear Stearns is no more, sold to JP Morgan with the government backing the sale.
Lehman Brothers is insolvent and bankrupt
Merrill Lynch has been sold to Bank of America at a fire sale price
AIG has also been bailed out by the Feds at the cost of $85 Billion.
Who’s next? My guess is Washington Mutual.
What does this mean to you? First of all your bank deposits and investment accounts are safe. There is no need to panic and run to withdraw and sell.
With that being said, it is my opinion that Cash Is King. That can be Yen, Euro, Dollars, or precious metals, but Cash is King. Stocks are beaten down and will be a great buy soon, but not today. Cash is King.
All of these companies are failing because they don’t have the cash to continue operations. Where is the cash you ask? It was lent out in adjustable rate mortgages to people who could not afford to pay their loans back. So they are left holding all these ‘toxic assets’ and are bleeding cash. These are huge banking and investing firms whose bankruptcy and fire sale helps no one.
1 Comment | Banking, Credit | Permalink
Posted by fubar1383
September 8, 2008
Henry “The Destroyer” Paulson
Well it finally happened. The CEO’s of Fannie May and Freddie Mac have been ousted, and both of the company’s have been put entirely under government ‘conservatorship’. This by default makes the federal government the de-facto largest mortgage lending in the country. To see what Fannie and Freddy do, click Here
This all went down Sunday under the direction of the secretary of treasury. Henry Paulson. Now in my opinion this is a good news bad news situation
The Good: Mortgage values will remain where they are, or head lower. Credit will remain available for those that are actually qualified. The company’s will continue to do business, and the housing market will be safe. The financial stocks are up big today.
The Bad: The Federal Government is lending out billions and billion of dollars. Fannie and Freddy stock drop 80% over night.
If these companies had collapsed we would have seen some very serious financial repercussions (in theory). Mortgage rates could double, which would drop the hypothetical A-bomb on anyone trying to sell there home, or get a mortgage. There is nothing like double of the price of something to have consumers no want to buy it.
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Posted by fubar1383
September 2, 2008
Well I am at least thinking about it. The way I see it, SUV’s are like bank stocks right now, they are heavily beaten down in price, but there is still value there. Dealers and private party sellers are selling medium to large SUV’s for way under blue book.
Everyone agrees that it is a great time to buy a house; I would say it’s a better time to buy an SUV, if you’re thinking about getting one and can deal with the gas prices; there is no time like the present.
This is just one more example of people getting emotional about their finances. So it costs you $100 to fill up your SUV. That hurts your wallet no question, but selling your SUV for a $3k loss, and buying a prius for 2k over blue book is just foolish.
The Pros: Its bigger, has less miles, 4WD (it snows where I live), and it would be close to an even trade with my car.
The Cons: The gas mileage($), The insurance($), and the maintenance($).
Final verdict: Probably a good way to take advantage of panickedsellers, costs would be significant, but not out of control. But would the benefit of the more flexible vehicle outweigh the costs?
Feel free to tell me what you think.
3 Comments | Cars | Permalink
Posted by fubar1383
September 1, 2008
Yes you read right.
Honestly this post is more about my personal opinion and road rage then it is about personal finance. We all know the type. Tailgating like it is going out of style, pass on the right, and give you the ‘WTF’ look when you’re going five over in the middle lane.
Not only does driving like that make you a major asshole, it wastes a ton of gas, and is very hard on your car. You should know that excessive acceleration and breaking (aka tailgating) significantly reduce your fuel economy. Speeding also puts a hurting on your fuel economy.
So know that if you’re going to drive like a jerk, it’s going to do more than annoy your fellow drivers.
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Posted by fubar1383
