The Vanguard Total Bond Index Owns No Long-Term Debt

For a lot of wealthy investors that look to stockpile or inventory their wealth, either as an emergency fund or dry powder, the Vanguard Total Bond Index (VBMFX) is a popular choice because it is loaded with nothing but U.S. government-issued debt as well as some AAA and AA bonds.

It is distinguishable from a money market fund because it owns most of the same debt instruments, except for longer durations. If you purchase those $1 shares in a money market fund, you are making the safest short-term investment possible because it is nothing but U.S. government debt that matures in thirty days or less. As long as the U.S. government does not … Read the rest of this article! “The Vanguard Total Bond Index Owns No Long-Term Debt”

The Amazingly Neglected Vanguard U.S. Growth Fund

Think back to 1959. The United States was expanding from 48 to 50 states with the inclusion of Alaska and Hawaii. Gas cost a quarter per gallon. A brand new Ford car would set you back $2,000. The Boeing 707 was first mass produced. American commercialism was falling in love with Mattel’s new Barbie doll creation, becoming the most sought after Christmas gift for young American girls. And in Cuba, Fidel Castro—boo, heckle heckle—was rising to power.

Also of interest, but rarely discussed, was the birth of one of America’s stodgiest Vanguard mutual funds that receives almost no attention but has nevertheless delivered exceptional risk-adjusted returns and made any long-term fundholders rich. I … Read the rest of this article! “The Amazingly Neglected Vanguard U.S. Growth Fund”

Paying Off Credit Cards Intelligently

Over the past fifteen years, various debt professional gurus have risen and attempted to challenge the obvious that, if you have debt, you should attempt to pay off the highest interest rate obligations first.

Some of these professionals have focused on the amount of each debt obligation, and then argued that consumers should pay off each debt obligation with the lowest principal balance first and then address those obligations with higher interest rates.

I appreciate and applaud the nod towards behavior economics that that this advice incorporates. It recognizes that, if someone is receiving five different bill requests each month, it can be daunting to identify progress and therefore there may be a … Read the rest of this article! “Paying Off Credit Cards Intelligently”

Letter Of Intent’s Most Important Requirement

Whether contemplating the purchase of a business or the desire to make a charitable contribution, an underutilized mechanism is the “Letter of Intent.” This document refers to making a solicitation to an offer, rather than an offer itself. This has important legal consequences, as the other party’s response to a “solicitation to offer” places no obligation upon the letter of intent writer, whereas an offer gives the other party the power to legally bind you to your statements in the event that what you see is construed as an offer.

The distinguishing characteristic of a letter of intent (LOI) is that it suggests a contemplation that an agreement can be reached in the … Read the rest of this article! “Letter Of Intent’s Most Important Requirement”

Papa John Schnatter Resigns Despite Creating Enormous Wealth

In lieu of ejection by the Board of Director, Papa John’s CEO John Schnatter has chosen to step down from his management at the company that he founded by opening up a pizza business in a spare space in his father’s restaurant. From his own work ethic, he created a business that is worth over $2 billion.

As a wealth creator, I don’t think you could find 1,000 individuals in the past century that had a greater impact than he did. Schnatter’s secret to pizza wealth creation consisted of the following: (1)  perpetual price hikes that were just a little bit higher than the rate of inflation, which he sustained perpetually until Domino’s Read the rest of this article! “Papa John Schnatter Resigns Despite Creating Enormous Wealth”