Dumb money moves

Just saw this at the WSJ, it’s a nice little list on 5 silly things to avoid, not thailand related I know, but interesting nonetheless.

1. Reaching for yield

What this country needs is a good 5% certificate of deposit. Instead the collapse in interest rates, and the Federal Reserve’s policy of keeping them down for as long as possible, is driving people crazy—especially people who need to generate income from their investments.

2. Going into the poor house to send Junior to a country-club college

Over the past 40 years, the cost of tuition and fees at a private university has tripled—after accounting for inflation. The cost of a public university has quadrupled.

3. Owning stock in your employer

This is one of the silliest and riskiest moves any investor can make. If the company hits trouble, you get whacked twice. You can lose your job and your savings—all in one fell swoop. Ask anyone who worked for Enron…or Lehman Brothers.

4. Taking Social Security too early

If you can afford to delay taking your Social Security retirement benefit, do.

5. Buying long-term bonds

A surprising number of people still subscribe to the flawed and circular argument that bonds, including long-term government bonds, are “safe.” In reality, bonds—especially long-term government bonds—are the rare example of a bubble that has been explicitly declared.

Source: WSJ

If you enjoyed this post, please consider leaving a comment or subscribing to the RSS feed to have future articles delivered to your feed reader.

Leave a Reply

Your email address will not be published. Required fields are marked *