by Guest Author
on April 23, 2010
If you want to retire early, then as this final article by Jacob from Early Retirement Extreme warns, you’ll need to do things differently.
Having introduced extreme early retirement and outlined some ways of living frugally, Jacob now concludes by suggesting you rip up the rulebook.
I saved around 75 per cent of my income in order to retire early. Sometimes more, sometimes less.
My budget is slightly over $500 a month. Almost half of that is rent, but I could decrease that by moving out of California. You could make that kind of money with a part-time job as a burger flipper or a greeter, if you wanted to have more time to do interesting stuff right away without saving to retire early.
In terms of the recession, I did lose some dividend income, but I quit my career right at the market low in March 2009. It does not concern me.
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by The Investor
on April 22, 2010
The humble interest only mortgage has become a byword for financial recklessness. In the eyes of many, such mortgages are the UK equivalent of sub-prime loans in the US.
But I disagree:
- Sub-prime mortgages saw US banks scanning the worst localities for the worst customers. Just to make sure things ended badly, the resultant loans were sliced and diced into mortgage-backed securities and sold with an often fanciful credit rating. Cue the credit crisis.
- An interest only mortgage is simply a financial product with the potential to be misused.
Comparing a sub-prime mortgage to an interest only mortgage is like comparing crack cocaine with aspirin. Both can kill you, but with an aspirin – or an interest only mortgage – you’ll be fine provided you read the label and follow the instructions.
I don’t have a mortgage, but if and when I buy a home I’ll probably go interest only. In this article I’ll explain why.
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by The Investor
on April 21, 2010
A long time ago Jeremy Clarkson had a TV show alongside his 53 cars and a death wish. And in one episode he discussed pensions.
Watch the video below for proof, and note that Clarkson’s pension plan involves:
- Spending 10% more than you earn
- Eating and smoking enough to die before you’re old
- Blowing anything left over on an E-Type Jag!
It’s pretty funny stuff, but obviously Clarkson was speaking as a bigshot media personality who now earns well over £1 million a year. (Not to mention someone who probably will die of one of those things!)
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by The Investor
on April 19, 2010
Overpaid bankers who are given crazy bonuses for making average returns and who ought to be using their first-class brains to design volcano-proof 747s rather than financial timebombs are a favorite topic on Monevator.
And don’t get me started on the housing bubble.
You might therefore expect the Goldman Sachs fraud charges to have me bashing away at my keyboard like Bill Clinton on an intern’s Facebook page.
But to be honest, I find myself strangely unmoved.
It’s hardly news, is it? Two years ago I wrote that Wall Street ‘innovation’ created the credit crisis, and that the elite banks should pay for it. The subsequent carnage took out Merrill Lynch and Lehman Brothers. Not a perfect result but better than I expected.
Okay, so bankers were soon collecting huge bonuses on the back of the special measures designed to protect them from going bust – but who was shocked by that? On a professional level bankers care only about money these days, and for all I know that’s all they ever cared about.
No, this SEC move seems politically timed. The sub-prime issue has been knocking about for ages. Michael Lewis even wrote a book
about it!
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