Back when I was soliciting questions from you before Thanksgiving, one of the questions I received from a reader concerned the wisdom of taking out student loans to invest. That’s a question that I have gotten two or three times before and never had the time to answer, so I’ll tackle it now.
The short answer is no. The longer answer is: I don’t know who you are borrowing the money from, but most likely, you are signing a contract that has restricted potential uses for the money that you borrow. Most likely, “investing the money” violates the contract. Look, nowadays, everything you do leaves behind a digital trail. If you take out $15,000 and in short order purchase 500 shares of General Electric, it wouldn’t take much of an investigation to figure out what where the loan money went. Things will be much easier for you if you don’t … Read the rest of this article!
While on my Benjamin Franklin kick, I came across this old letter that the founding father, inventor, philosopher, and investor had written to a young, ambitious tradesman. Thought you might enjoy.
To my Friend A. B.:
As you have desired it of me, I write the following hints, which have been of Service to me, and may, if observed, be so to you.
Remember that time is money. He that can earn ten shillings a day by his labour, and goes abroad, or sits idle one half of that day, though he spends but sixpence during his diversion or idleness, ought not to reckon that the only expense; he has really spent or rather thrown away five shillings besides.
Remember that credit is money. If a man lets his money lie in my hands after it is due, he gives me the interest, or so much as I can make
… Read the rest of this article!
To kick off the new year, let’s take a step into the “Way Back Machine.” We won’t get carried away with ourselves and go too far back (long New Year’s Eve night and all that)—only ten years to the January 1st start to 2004.
At that point in time, you were looking to make an investment with $25,000. Maybe you inherited it, maybe it was a bonus, maybe you sold an asset or business, or maybe you put together the money through some good old-fashioned saving.
As you come across some potential investment ideas, you decide to take a hard look at Colgate-Palmolive. Everyone knows how lucrative toothpaste, soap, and other toiletries are. The company slaps brand names on its goods like Ajax, Irish Spring, Hill’s, Soft Soaps, Fab, and of course, Colgate and Palmolive, and it is able to achieve 36.0% returns on total capital because of the … Read the rest of this article!
Sometimes, it’s easy to forget about the moments that “make” someone famous. My favorite high school teacher was always quick to remind me that Robert Frost’s iconic poetry like “Fire And Ice”, “Stopping By Woods On A Snowy Evening”, or “The Road Not Taken” weren’t always part of the national consciousness. Even though he had been winning Pulitzer prizes and had become somewhat of a celebrity among eastern college students and academics, he didn’t really become a household name until he spoke at JFK’s inauguration and read “The Gift Outright.”
CNN, even though it had been gradually becoming a regional powerhouse in news coverage, did not gain the #1 spot until a baby fell fifty-five feet into the ground and delivered live coverage that satisfied the public craving for the news story. Walt Disney, who created a media empire that now competes with CNN for eyeballs although the target … Read the rest of this article!
Reader “sumflows” uploaded this video from Warren Buffett’s speech at Florida that discussed Buffett’s advice on diversification, and the best part about it is that Buffett gives advice based on the particular goals that leads each person to investing in the first place.
If you are someone that is making $9,000 per month post-tax and is only spending $6,500 of it, and you don’t have a particular desire to spend a lot of time studying individual companies, then it makes a lot of sense to open up an account with Vanguard and funnel the money into the S&P 500 Index Fund each month that barely costs anything in fees (the expense ratio for “VFINX” is 0.17%, meaning you would have to pay $17 each year on every $10,000 you entrust to this S&P 500 Index Fund run by Vanguard).
The first of the two main advantages with this strategy … Read the rest of this article!