We Finance Everything… Even When Paying Cash

For our discussion we are going to define the word “finance” as simply a cost. It’s obvious that when we borrow money for a purchase we have an additional cost, the cost of money or interest. When we borrow someone else’s money we must pay them interest for the use of that money, this is…

Continue Reading →

Are interest rates being held artificially low?

Currently the feds have elected to flood the market with additional funds for mortgages and in particular for refinancing current mortgages. Rates are as low as 4.5%. But how long can this last? Let’s look at the junk bond market as a potential indicator of what could happen. First off what makes a bond a…

Continue Reading →

The Truth About Volatility

How Long Does It Take? Here’s a quick quiz for you: Assume you started with $100,000 in your account. If your investments decreased by 25% percent one year—then increased by 25% the following year—how much would be in your account? $100,000 More than $100,000 Less than $100,000 The correct answer is “C”—less than $100,000. Let’s…

Continue Reading →

Catching Wild Pigs

“There was a Chemistry professor in a large college that had some exchange students in the class. One day, while the class was in the lab, the Prof. noticed one of the exchange students who kept rubbing his back and stretching as if his back hurt. The professor asked the young man what the matter was. The student told…

Continue Reading →