By 2 Cents on February 28th, 2011 | Category: Financial Literacy |  What exactly is the function of the financial sector in our society? Simply this: Its sole function is supplying capital efficiently to aid the real economy. The financial sector is a tool to help those that make real tools, not an end in itself. But five fatal flaws in the financial sector’s current structure have created a monster that drains the real economy, promotes fraud and corruption, threatens democracy, and causes recurrent, intensifying crises.
~ Bill Black
Today I’d like to review an article on the financial sector that I came across via The Big Picture. It’s by Bill Black, author of The Best Way to Rob a Bank Is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. He is also “a white-collar criminologist who has spent years working on regulatory policy and fraud prevention.”
The [...]
Read on and enjoy … The Financial Sector: Capitalist Bastion or Corrupt Oligarchy?
By 2 Cents on February 25th, 2011 | Category: Retirement |  [Ed Easterling of Crestmont Research] favors us with yet another book, called Probable Outcomes: Secular Stock Market Insights, in which he takes on the mostly silly research, done by so many analysts, that purports to show what an investor can expect to make from his retirement portfolio over time. I can’t tell you how disastrous this simplistic analysis can be for retirees.
~ John Mauldin
Update: This article was included in the Wealth Builder Carnival #30 at Wealth Builder as well as the Carnival of Financial Planning #174 hosted by The Financial Blogger. Thanks!
I’ve got some Friday Food for Thought for you this week that fits in nicely with our recent discussion on passive investing and the dangers of investment dogma. It comes to us courtesy of John Mauldin’s most recent installment of Outside [...]
Read on and enjoy … Safe Retirement Withdrawal Rates and Probable Outcomes
By 2 Cents on February 23rd, 2011 | Category: Investing |  To be interested in the changing seasons is a happier state of mind than to be hopelessly in love with spring.
~George Santayana
Update: This article was selected for the Best of Money Carnival #92 hosted at Free Money Finance. It was also featured in the Totally Money Blog Carnival at Wealth Informatics. Thanks!
I’ve been thinking a lot more seriously about my investment approach lately since we’ll soon be at a point where we feel more comfortable about participating in the markets again. This is based purely on the stabilization of our personal financial situation and does not by any means represent a bullish call on the stock market. I still have serious concerns about the structural problems in the markets and the economy, and the 100% run since the March 2009 lows doesn’t make me all that sanguine about putting [...]
Read on and enjoy … Passive Investing: Mixed Feelings
By 2 Cents on February 21st, 2011 | Category: Saving |  The test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function.
~F. Scott Fitzgerald
Update: Thanks to Arjun at Investing Thesis for including this article in the Canadian Personal Finance and Investing Carnival #16.
Very few topics elicit the kind of virulent debate that the TFSA vs. RRSP argument has generated in Canada this RRSP season. To be honest, those of us who cover finance are probably a little tired of writing about the TFSA vs. RRSP war. I’m sure a lot of readers don’t care to read about it anymore. And yet we (including me, apparently) just can’t seem to let it go. (The RRSP deadline for the 2010 tax year is March 1, 2011, so it should be over soon. )
For years, [...]
Read on and enjoy … RRSP vs. TFSA: One Last Dip into the Debate
By 2 Cents on February 18th, 2011 | Category: Planning |  Confidence is preparation. Everything else is beyond your control.
~Richard Kline
Update: This article was included in the Carnival of Wealth #26 – Stock Investing Edition posted at Value Stock Guide as well as the Carnival of Money Stories #94 hosted at Invest It Wisely. Thanks!
Forgive me for the title of today’s article. I usually skip reading articles like this because they inevitably disappoint. The #1 Way to Make a Million Dollars before You’re 30. The Only Thing You Ever Need to Know about Investing. Really? Just one thing?
To be fair, I’m sure some of those articles actually offer some interesting insights. For the record, I’m not trying to elicit clicks by using a hyperbolic headline. Let me explain how I came to my idea of the first rule of personal finance and investing.
Family [...]
Read on and enjoy … The First Rule of Personal Finance and Investing
By 2 Cents on February 16th, 2011 | Category: Investing |  All men should strive to learn before they die what they are running from, and to, and why.
~James Thurber
Update: This article was included in the Totally Money Blog Carnival hosted at Fat Guy Skinny Wallet and the Carnival of Financial Planning #173 at The Skilled Investor. Thanks!
Have you found the investment process very frustrating? Maybe you’ve been trying to pick individual stocks, implement the recommendations of your advisor, or follow a passive strategy on your own. Any one of these investment strategies could work. Those who spend a lot of time debating which is the best one miss the more important question: Which one will work for you?
Regular readers know that I’m a fan of the movie The Princess Bride, so I can’t resist quoting one of my favourite exchanges. This one involves the characters [...]
Read on and enjoy … What’s Your Investment Personality?
By 2 Cents on February 14th, 2011 | Category: Investing |  One bright day in the middle of night two dead boys rose to fight. Back to back they faced each other, drew their swords and shot one another. A deaf policeman heard the noise, and saved the lives of the two dead boys. If you don’t believe this lie is true, ask the blind man, he saw it too.
~Author Unknown
Update: This article was chosen for the Best of Money Carnival #91 posted at Intelligent Speculator. Thanks!
Are you confused about inflation yet? Everywhere you turn some analysts are worrying about rising commodity prices while others, including Fed Chairman Bernanke, point to the tame core inflation rate. Back in August of 2010, it looked like a double dip recession was in the cards and we were worrying about deflation. Then the Fed threw the stock market a QE2 bone and Read on and enjoy … Wake Up and Smell the Inflation
By 2 Cents on February 11th, 2011 | Category: Book Reviews |  When they do arrive, Jump Points are necessarily startling and disruptive periods. They upset the status quo, threaten existing leaders, and rattle the complacent. . . . Most of our prevailing business assumptions will be challenged and a whole set of new ones will be born as businesses everywhere make the Jump.
~ Tom Hayes
I received a book called Jump Point: How Network Culture is Revolutionizing Business for Christmas in 2009. I didn’t get around to reading it until recently. That’s noteworthy because the topic of the book is quite time sensitive. You realize that when MySpace is referenced as the top dog in the social media world and Facebook is mentioned as an up-and-comer – and the book just came out in 2008!
It’s been interesting to read this book at the beginning of 2011 because that’s the year in which its author, Tom [...]
Read on and enjoy … Book Review: Jump Point
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