We may need to reconsider the new rules of personal finance.

Daphne Basel

2019-03-05 10:40:00 Tue ET

We may need to reconsider the new rules of personal finance. First, renting a home can be a smart money move, whereas, buying a home cannot always be a good investment. It can be reasonable to rent a home without opportunity costs such as down payments, maintenance costs, renovation fees, interest expenses, property taxes, and insurance premiums. Investing these opportunity costs in stocks and bonds may yield better long-term returns. Second, money is an important resource for long-term investment, and time is another major element of successful wealth accumulation. It takes time for compound interest to exponentially grow at the 6%-11% stock market annual rate of return.

Third, it would be wiser to invest retirement finance in some stock market index to earn the average equity premium around 5%-9% in recent times. With lower bond returns and longer lifespans, stock investors can reap higher rewards. Fourth, it is important to demystify the conventional wisdom that student loans are good debt because education pays handsomely in the form of higher future wages. However, only postgraduate degrees offer the higher *incremental* wage boost than college degrees. We should consider these new rules of personal finance during the recent Trump stock market rally.

 


If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.

Blog+More
State, society, and the narrow corridor to liberty
Joseph Corr

2023-09-28 08:26:00 Thursday ET

State, society, and the narrow corridor to liberty

Daron Acemoglu and James Robinson show a constant economic tussle between society and the state in the hot pursuit of liberty. Daron Acemoglu and James R

+See More
The Economist digs deep into the political economy of U.S. government shutdown over 3 days in January 2018.
Apple Boston

2018-01-13 08:39:00 Saturday ET

The Economist digs deep into the political economy of U.S. government shutdown over 3 days in January 2018.

The Economist digs deep into the political economy of U.S. government shutdown over 3 days in January 2018. In more than 4 years since 2014, U.S. government

+See More
American unemployment declines to the 50-year historical low level of 3.5% with moderate job growth.
Chanel Holden

2019-11-19 09:33:00 Tuesday ET

American unemployment declines to the 50-year historical low level of 3.5% with moderate job growth.

American unemployment declines to the 50-year historical low level of 3.5% with moderate job growth. Despite a sharp slowdown in U.S. services and utilities

+See More
Agile lean enterprises remain flexible and capable of reinvention in light of new megatrends such as digitization and servitization.
Amy Hamilton

2020-10-20 09:36:00 Tuesday ET

Agile lean enterprises remain flexible and capable of reinvention in light of new megatrends such as digitization and servitization.

Agile lean enterprises remain flexible and capable of reinvention in light of new megatrends such as digitization and servitization. Shane Cragun and Kat

+See More
Fed Chair Jerome Powell hints slower interest rate increases because the current rate is just below the neutral threshold.
Jacob Miramar

2018-12-07 11:35:00 Friday ET

Fed Chair Jerome Powell hints slower interest rate increases because the current rate is just below the neutral threshold.

Fed Chair Jerome Powell hints slower interest rate increases because the current rate is just below the neutral threshold. NYSE and NASDAQ share prices rebo

+See More
What are the top global risks in trade, finance, and technology as of early-2023?
Andy Yeh Alpha

2023-05-31 11:27:00 Wednesday ET

What are the top global risks in trade, finance, and technology as of early-2023?

What are the top global risks in trade, finance, and technology? In this macro report, we focus on the current global risks from inflation and growth con

+See More