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Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Is there a good rule of thumb for how much I should have set aside as emergency cash? ### Answer: How to start is pretty simple. With your next pay check set aside an amount and open a separate savi...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Is there a good rule of thumb for how much I should have set aside as emergency cash? ### Answer: I think that Dave Ramsey has a good approach to emergency funds. Save $1,000 that is immediately acces...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Is there a good rule of thumb for how much I should have set aside as emergency cash? ### Answer: 6 to 9 months worth of expenses is recommended. You should also consider having long-term disability i...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Is there a good rule of thumb for how much I should have set aside as emergency cash? ### Answer: Between 6 months and a year is normally regarded as the "standard". Plan out what your monthly expens...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Is there a good rule of thumb for how much I should have set aside as emergency cash? ### Answer: The bare minimum should be 6-months of expenses. Ideally, it should be at least 1 year. My personal ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Is there a good rule of thumb for how much I should have set aside as emergency cash? ### Answer: The main factor should be what sorts of emergencies you are trying and also need to protect yourself a...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Is there a good rule of thumb for how much I should have set aside as emergency cash? ### Answer: First you should maintain a monthly expense and find out the burn rate. There would be certain expense...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Is there a good rule of thumb for how much I should have set aside as emergency cash? ### Answer: Many, many good answers here, but I like this one: One month's worth of expenses for each full percen...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Equity prices during currency devaluation — Mexico 1994 ### Answer: Yes, this phenomenon is well documented. A collapse of an economy's exchange rate is coincidented with a collapse in its equities ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What is the difference between speculating and investing? ### Answer: Speculation means putting your money on a hunch that some event may occur, depending on current circumstances and some future circ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What is the difference between speculating and investing? ### Answer: Classic investing guru Benjamin Graham defines "An investment operation is one which, upon thorough analysis, promises safety of p...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What is the difference between speculating and investing? ### Answer: Investing is balancing the desire for return against the various risks that your money is faced with. There's also a recognition t...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What is the difference between speculating and investing? ### Answer: In my opinion the difference is semantic. A professional, or someone wanting to present an air of competence, is more likely to ta...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What is the difference between speculating and investing? ### Answer: I consider speculation to be a security purchase where the point is to sell it to someone for a higher price. Day-trading is comp...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What is the difference between speculating and investing? ### Answer: Colloquially, there's no difference except for the level of risk (which is an estimate anyway). Classically, investment is creatin...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What is the difference between speculating and investing? ### Answer: Speculation is when someone else makes an investment you don't like. The above is tongue in cheek, but is a serious answer. There ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Are Target Funds Unsafe - Post Q.E.? ### Answer: It's a what-if? sort of question. What if rates stay down or trend only slightly higher, despite no QE? look at other countries response to tepid econo...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Dividends Growing Faster than Cost of Capital ### Answer: I don't think the method falls short, it's the premise that is wrong. If the dividend stream really did grow faster than the cost of capital i...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How inflation in China makes real exchange rate between China and US to rise? ### Answer: Chinese currency is not freely convertible. Its exchange rate is not determined by the market but rather by t...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: I'm thinking of getting a new car … why shouldn't I LEASE one? ### Answer: If you are looking to build wealth, leasing is a bad idea. But so is buying a new car. All cars lose value once you buy the...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: I'm thinking of getting a new car … why shouldn't I LEASE one? ### Answer: You SHOULDN'T lease one if you are going to get an economy car, if you don't drive too much (<15K / year), and you want to ha...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: I'm thinking of getting a new car … why shouldn't I LEASE one? ### Answer: Here are the reasons I did not lease my current car. When you lease, you're tied in at a monthly payment for 48 months or mor...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: I'm thinking of getting a new car … why shouldn't I LEASE one? ### Answer: Also consider how cars fare under your ownership: Does your current car... If any of the answers to these questions are "Yes"...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: I'm thinking of getting a new car … why shouldn't I LEASE one? ### Answer: I agree with Speedbird389 - I leased an economy car 10 years ago, paid the residual at the end of the lease because I knew th...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: I'm thinking of getting a new car … why shouldn't I LEASE one? ### Answer: I never understood why people lease rather than buy or finance. I'm financing a new civic 09 @ 0.9%. At the end of the 5 ye...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: I'm thinking of getting a new car … why shouldn't I LEASE one? ### Answer: I have an eight year old Kia Spectra that my wife is after me to replace -- but it hadn't been giving me any trouble at all. ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: I'm thinking of getting a new car … why shouldn't I LEASE one? ### Answer: It's a very simple equation. If we forget about the stress and limitations that come with the so-called "lease", and make the...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How are mortgage interest rates determined? ### Answer: Mortgage or other interest rates are determined by the banks on cost of funds, risk and operating cost. The Fed raises money from the markets ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How are mortgage interest rates determined? ### Answer: One will find that the fixed 30 year mortgage rate is tightly correlated to the 10 year treasury. An adder of 2-2.5% or so, changing slightly wi...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How are mortgage interest rates determined? ### Answer: Sheegan has a great explanation of how the TBA market contributes to mortgage rates. The 30 Year Mortgage rates are closely tied to the 10-Year...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: When will Canada convert to the U.S. Dollar as an official currency? ### Answer: I don't see countries switching to the USD, I see countries moving away from it. The US has the largest peace time debt...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: When will Canada convert to the U.S. Dollar as an official currency? ### Answer: The conspiracy buffs think this is already in the works. If you are interested, Google this fictional currency called t...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: When will Canada convert to the U.S. Dollar as an official currency? ### Answer: I would say at about the same time as the US converts to having a public health system that covers everyone with very f...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: When will Canada convert to the U.S. Dollar as an official currency? ### Answer: Canada would most likely not convert any time in the near future. The challenge for Canada converting to the US Dollar ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How will the fall of the UK Pound impact purchasing my first property? ### Answer: Just to get the ball rolling, here's an answer: it won't affect you in the slightest. The pound happened to be tumbli...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How will the fall of the UK Pound impact purchasing my first property? ### Answer: There are two impacts: First, if the pound is dropping, then buying houses becomes cheaper for foreign investors, so ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What does the Fed do with the extra money it is printing? ### Answer: First of all, just for the sake of clarity, the Federal Reserve doesn't actually "print" money - that's the job of the BEP. What ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What does the Fed do with the extra money it is printing? ### Answer: Usually the FED uses newly printed money to buy US treasuries from Goldman Sachs, JP Morgan, etc.. These banks then lend out the...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Who creates money? Central banks or commercial banks? ### Answer: A central bank typically introduces new money into the system by printing new money to purchase items from member banks. The central...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Who creates money? Central banks or commercial banks? ### Answer: Scenario 1 is typically the better description. If commercial banks were allowed to simply "create" money, they wouldn't be in the me...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Who creates money? Central banks or commercial banks? ### Answer: Empirial evidence for the second scenario: Can banks individually create money out of nothing? — The theories and the empirical evide...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What market conditions favor small cap stocks over medium cap stocks? ### Answer: Small cap companies are just smaller, so the risk for them to fail is higher but the potential for higher returns is a...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What market conditions favor small cap stocks over medium cap stocks? ### Answer: Small companies are generally able to adapt quickly to take advantage of changing conditions to enter new markets when...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What market conditions favor small cap stocks over medium cap stocks? ### Answer: I think to answer this question it is best for you to learn more about why people diversify through asset allocation. ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What market conditions favor small cap stocks over medium cap stocks? ### Answer: In general, small cap stocks are exposed to more downside during recessions and when credit is tight, because it is mo...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How to measure how the Australian dollar is faring independent of the US dollar ### Answer: What you want is the average change in rate of the Australian Dollar against multiple other currencies, to e...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How to measure how the Australian dollar is faring independent of the US dollar ### Answer: If you're interested in slower scale changes, one option is to use indexes that value a common commodity in ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How to measure how the Australian dollar is faring independent of the US dollar ### Answer: The best answer to your question would to be what the interest rates are like in Australia itself. The Rese...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How to measure how the Australian dollar is faring independent of the US dollar ### Answer: To make it simple, just use gold as the main benchmark. Gold price never moves, FIAT currencies move around ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Please help me understand reasons for differences in Government Bond Yields ### Answer: The real question is what does FT mean by "Eurozone Bond". There is no central European government to issue bond...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Please help me understand reasons for differences in Government Bond Yields ### Answer: These are yields for the government bonds. EuroZone interest rates are much lower (10 times lower, in fact) than...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What is a “fiat” currency? Are there other types of currency? ### Answer: A "fiat" currency is non-convertible paper currency that a government establishes as legal tender. Most countries today are us...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What is a “fiat” currency? Are there other types of currency? ### Answer: In short. A fiat currency is money that has value only because (usually) a government says it does. A counter example (non-fi...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What is a “fiat” currency? Are there other types of currency? ### Answer: fiat in Latin means "let it be" or "let it happen" - as in "fiat lux!" meaning "let there be light!". Thus, fiat money means m...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: What is a “fiat” currency? Are there other types of currency? ### Answer: There's two types of categories at play that define currency types - but I think the first is more like what you are after. T...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Are there any hedged international funds in India? ### Answer: No there aren't any such funds. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Are there any hedged international funds in India? ### Answer: There aren't and for a good reason. The long term trend of INR against USD, GBP, EUR and other harder currencies is down. Given the infla...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How to rebalance a passive portfolio if I speculate a war is coming? ### Answer: At a risk of stating the obvious: a passive portfolio doesn't try to speculate on such matters. ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How to rebalance a passive portfolio if I speculate a war is coming? ### Answer: Normally, in a war everybody suffers and the entire economy goes down. Military contractors do better than average, bu...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Ways to trade the Euro debt crisis ### Answer: Short the Pound and other English financial items. Because the English economy is tied to the EU, it will be hit as well. You might prefer this over Eu...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Ways to trade the Euro debt crisis ### Answer: The way I am trading this is: I am long the USD / EUR in cash. I also hold USD / EUR futures, which are traded on the Globex exchange. I am long US equi...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Does it make sense to buy a house in my situation? ### Answer: Personally I would hold off on buying a house until you have the credit card paid down even more or paid off completely so that it is one...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Does it make sense to buy a house in my situation? ### Answer: I wouldn't buy a house at this time. Your credit card debt is the most expensive thing you have. Which is to say that you want to get rid...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Does it make sense to buy a house in my situation? ### Answer: There are many other good answers here, but I just wanted to note that it could be dangerous to rely on the changes in alimony and child ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Does it make sense to buy a house in my situation? ### Answer: Short answer: NO. Do NOT buy a house. Houses are a "luxury" good (see Why is a house not an investment?). Although the experience of t...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Does it make sense to buy a house in my situation? ### Answer: The $3K includes property tax, right? It looks like the mortgage alone will be about $2150 or so. If your (cal) state tax is enough to pu...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Does it make sense to buy a house in my situation? ### Answer: My opinion is to hold off. I don't see housing market rising anytime soon, possibly even going lower, so you don't have to worry about ge...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Does it make sense to buy a house in my situation? ### Answer: I think your best course of action depends on the likely outcome of the divorce proceedings. The alimony/child support payments are contr...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Does it make sense to buy a house in my situation? ### Answer: Just echoing the other answers here. You're not ready yet. 3% down, or no money down loans are what got so many of us into trouble these ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Does it make sense to buy a house in my situation? ### Answer: I'm confused why you think you need a $450k house. That seems extremely high in today's market except perhaps in certain major urban loca...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Does it make any sense to directly contribute to reducing the US national debt? ### Answer: At its heart, I think the best spirit of "donation" is helping others less fortunate than yourself. But as l...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Does it make any sense to directly contribute to reducing the US national debt? ### Answer: I think it would have the same effect as paying off a compulsive gambler's debts. Until Congress and the peo...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Does it make any sense to directly contribute to reducing the US national debt? ### Answer: The US national debt isn't the problem. If the Bush-era tax cuts had been allowed to expire then US debt wou...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Does it make any sense to directly contribute to reducing the US national debt? ### Answer: No. Unless you are ten Bill Gates rolled into one man, you can not possibly hope to make a dent in the 14 tr...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Does it make any sense to directly contribute to reducing the US national debt? ### Answer: No, it makes no sense. The US national debt is different from other debt on TWO KEY WAYS : 1.) The nationa...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Does it make any sense to directly contribute to reducing the US national debt? ### Answer: It doesn't make any financial sense for you personally, because the impact on the debt would be so little it...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Buy small-cap ETF when you already have large-cap of the same market ### Answer: Yes, you should own a diverse mix of company sizes to be well diversified. While both will probably get hit in a recess...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How big of a mortgage can I realistically afford? ### Answer: Let's start with income $80K. $6,667/mo. The 28/36 rule suggests you can pay up to $1867 for the mortgage payment, and $2400/mo total debt...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How big of a mortgage can I realistically afford? ### Answer: You're biting off a lot. Let's say you can swing 5% for a down payment: $13k. A 30-year loan on $247k at the rate you quote gives you a p...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How big of a mortgage can I realistically afford? ### Answer: For me there are two issues. So, what to do? You have the basics of a very strong position coming together. A good salary in a good city....
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How big of a mortgage can I realistically afford? ### Answer: My primary concerns. There seems to still be a fair bit of distressed property (forclosures etc) on the market at current, which might wel...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How big of a mortgage can I realistically afford? ### Answer: If you are not planning on living in your condo for at least 10 years don't do it. For about 5 years your mortgage will be more then rent,...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How big of a mortgage can I realistically afford? ### Answer: I bought a house 6 months ago for $240,000 on an $80k salary am getting by just fine and am able to save money (and I live on Long Island,...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: How big of a mortgage can I realistically afford? ### Answer: $260k mortgage is pretty high for $80k salary alone -- if you have expensive tastes, be prepared to tune them down. The make or break for ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Brent crude vs. USD market value ### Answer: I don't think the two are particularly linked. While Brick is right in that the price of oil is denominated in dollars, I don't think that's responsible ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Brent crude vs. USD market value ### Answer: It's standard to price oil in US$. That means that if the US$ gets stronger, the prices of oil drops even if its "intrinsic value" remains constant. Sam...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Is Real Estate ever a BAD investment? If so, when? ### Answer: No, it can really not. Look at Detroit, which has lost a million residents over the past few decades. There is plenty of real estate whic...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Is Real Estate ever a BAD investment? If so, when? ### Answer: Real estate is a lousy investment because: Renting a home and buying a home, all else being equal, are pretty similar in costs in the lon...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Is Real Estate ever a BAD investment? If so, when? ### Answer: Real estate is always an interesting dynamic. In most cases prices have always gone up. Price is mainly a function of demand. Sometim...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Is Real Estate ever a BAD investment? If so, when? ### Answer: I'm surprised to even hear this question with the current state of devaluation of real estate. One thing I'll add to the other answers i...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Is Real Estate ever a BAD investment? If so, when? ### Answer: All other factors being equal, owning your primary residence is almost always a good investment over the long haul. Why? Because you have...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Is Real Estate ever a BAD investment? If so, when? ### Answer: As Yishani points out, you always have to do due diligence in buying a house. As I mentioned in this earlier post I'd highly recommend r...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Is Real Estate ever a BAD investment? If so, when? ### Answer: There's an aspect to real estate that's under-discussed. When you take all factors into account, it just about keeps up with inflation ov...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: $10,000 to invest in the house - Pay down principal or spruce up to increase appraisal? ### Answer: There is no guarantee improvements will raise the appraised value. You also don't want your propert...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Repaying Debt and Saving - Difficult Situation ### Answer: She seems to be paying an inordinate amount of money for car payments. $850/month is just too high. She may be able to get by on public trans...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Repaying Debt and Saving - Difficult Situation ### Answer: Just a thought, but have you considered approaching your sister about assuming the student loans or repaying your mother (even if it is a sma...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Repaying Debt and Saving - Difficult Situation ### Answer: Like everybody else I'm picking up on the school loans - you're mother isn't exactly earning a massive amount of money given her cost of livi...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Repaying Debt and Saving - Difficult Situation ### Answer: I see one clear thing to help: She lives alone. Why does she need a two bedroom place? ###end
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Repaying Debt and Saving - Difficult Situation ### Answer: Your mother has a problem that is typical for a woman with children. She is trying to help her children have a good life, by sacrificing to ...
Below is an instruction that describes a task. Write a response that appropriately completes the request. ### Question: Repaying Debt and Saving - Difficult Situation ### Answer: Given the listed expenses, this problem will not have a nice solutions. So lets quickly go through them and see when the most pressing ones c...