We are inclined to think those people rich who have more money than we, but seldom conclude that we are rich because there are many people poorer than we.
Now we know where people are spending the money they save on gas: skyrocketing healthcare costs mandated by Obamacare. I don’t want to get political and either endorse or attack Obamacare, but it is a stone cold fact that it makes healthcare much more expensive.
And rather than save up or pay down debt, Americans are using fuel savings to buy healthcare-related services they would buy anyway.
How $50/Month Can Make You Richer than a Hedge Fund Manager
My line of work has given me inside access to the financial habits of many, many people. From starving college students to the rich and famous, I have had the opportunity to peer into what money habits really look like for a wide cross section of society.
If I could distill all that into just one observation, it would be that no one is doing as well as you think. I’m thinking specifically of a couple of very rich people I’ve met over the course of the past two years or so. Both worked in high finance. One was a former hedge fund manager.
Both of these guys were in serious financial trouble. They weren’t going to make it through the recession unscathed. They were looking at a major restructuring of their lifestyle. One was facing foreclosure. Think the job market is tough for ex-factory workers? Try being an ex-hedge fund manager.
3% Down Payments on Mortgages
More lenders are lowering down-payment requirements, allowing borrowers to commit 3%—or even less—of a home’s purchase price to get a mortgage. Many had been requiring down payments of at least 20% since the recession began.
Some lenders also are waiving mortgage-related fees, and more are allowing down payments to be made by other parties, such as the borrower’s family.
The deals are aimed at buyers with good credit scores and a steady income who have been unable to save enough for a sizable down payment. They are often targeted at buyers who live in expensive housing markets, where even a small down payment can equal tens of thousands of dollars.
ID Thieves Will Steal Your Tax Refund
Identity thieves are stealing people’s Social Security numbers and other key pieces of personal information in order to file a fraudulent tax return and claim a refund, the IRS warned Monday.
The scammers typically file the fraudulent return early in the season, beating you to the punch. And when you file, that may be the first time you learn your identity has been stolen.
What’s disturbing about this is just how little information it takes to pull off this scam, and how difficult it is to detect. It seems like every day I’m hearing about a school, university, large corporation, or governmental agency that gets hacked and has to notify people that, oops, someone stole your SSN from us. Sorry!
I’m increasingly convinced that identity theft is just going to become a part of modern life that everyone will have to deal with at some point. It has happened to me and many people I know. Even the people I know who haven’t actually had their identity stolen, have had their personal information compromised. So, it may just be a matter of time.
The person who doesn’t know where his next dollar is coming from usually doesn’t know where his last dollar went.
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Banks Want to Robocall You
According to the Telephone Consumer Protection Act, it’s illegal to robocall a mobile phone number without permission. The American Bankers Association wants to change that, arguing that robocalls will help fight identity theft and other kinds of fraud. Opponents say that’s an overreach, one that will erode an important consumer protection.
That’s one explanation. Another is that it allows them to repeatedly call people who owe them money, like this couple. If you’re between 3 days and 6 months late on your credit card payment, the debt hasn’t been charged off yet and the banks still consider it recoverable. This window is when they like to bombard people with debt collection calls. Changing the law to allow robocalls would facilitate this.
What’s Better than Predicting the Future?
Benjamin Graham was the most successful investor the world has ever known. Over the twenty-year period from 1936 to 1956, he achieved a 20% annual return on his stock investments (vs a 12.2% return for the market overall). Legendary investor Warren Buffett was one of Graham’s proteges, and called him the most influential figure in his life after his own father.
Don’t worry, this post isn’t about investing or the stock market. It’s about a principle that Benjamin Graham wrote about in his magnum opus The Intelligent Investor that can be applied to virtually every area of your life (but most especially your financial life).
Hiding Money from Your Spouse? You’re Not Alone.
One in five Americans have spent $500 or more on a purchase without their partner’s knowledge, according to a CreditCards.com report released Wednesday…It’s not just purchases that many are keeping secret. Approximately 7.2 million Americans (4.4 million men and 2.8 million women) have hidden a bank or credit card account from their live-in spouse or partner, the report found.
Look, marriage advice is beyond the scope of what I do here. I do NOT want to get in the middle of that one.
Auto Loan Surge Fueled by Sub-660 Credit Scores
Much of the economic “growth” over the past few years has been a result of subprime auto loans boosting car companies’ profits. And the trend has gone on so long some car dealers are starting to worry.
Consumer confidence is perhaps the best indicator of why auto sales are running so strong. For years, it’s been clear that as consumer confidence goes, so go auto sales. The most recent reading has consumer confidence at its highest level since 2004. Not surprisingly, auto sales this year are expected by many to reach or exceed 17 million vehicles for the first time since 2001. Last year, U.S. auto sales totaled 16.52 million vehicles…”Nothing is typical with this cycle. We’re all holding our breath wondering how far this can go,” said Krebs. She pointed out that the possibility of higher interest rates later this year and an impending surge of used cars that will hit the market once they reach three or four years in age could both slow down new car sales.
Yes, interest rates will have to go up eventually. So if you have the means and have developed the good financial habits necessary to handle a car loan, then now is the perfect time to step up the credit ladder and get a car.
If you’re not going to need a new car in the next couple of years, don’t get one. It’s not worth it just to get that loan reporting on your credit scores.
But also keep in mind that we’re at a historically unprecedented interest rate level right now. Rates won’t be this low for a very long time, so if you’re planning to buy a car in the next year to 18 months, you might consider pulling the trigger, as long as you can afford the payments based on your current income.
This is a good time for smart people with good financial discipline to take advantage of low interest rates and profit.