This attitude can lead to very risky behavior. Say you received a bonus the last two years. I bet you’re expecting it again this year. Of course, there’s nothing wrong with thinking positively — unless you’re already spending the bonus before you have it. I know of more than one person who assumed they could afford a more expensive house or a fancier car because the expected bonus would make up the difference. Then, when it didn’t happen, they were left scrambling to make the numbers work. Read more
by Carl Richards
[Recently] Hulu, a streaming video site, announced it would offer “a selection of ad-supported full TV episodes on mobile devices—for free.” Take a guess what all the headlines focused on: It’s free!
Free is a powerful word. So powerful, in fact, that it can turn us from rational people into people who barely pause before grabbing two of something we don’t need to get a third something free.
Case in point, none of these headlines touch on the reality that streaming all this data will come at a price. Few of us have unlimited data on our mobile devices, and unless you can always connect to someone else’s Wi-Fi, there’s a cost to this free service. Read more
From Carl Richards, Director of Investor Education, The BAM ALLIANCE
Over the past few weeks, we’ve watched a number of car companies announce recalls. From GM to Toyota, these companies have raised their hands and admitted they need to fix a mistake. Often, a recall happens because engineers didn’t anticipate how a design would work over time or the design contained an unseen flaw that’s only revealed after many uses.
Even after numerous tests, companies may still make mistakes, but a recall let’s a company fix its mistakes. Of course, some companies may be at greater fault than others, but the point that matters for us is that a recall allows for the admitting and fixing of a mistake.
I totally understand that this concept seems very basic. But, be honest: What financial decision have you made that you know needs a recall, but you’ve hesitated to do anything about it? Read more
Carl Richards, Director of Investor Education, 4/4/2014
Do you consider yourself an investor or a trader?
The answer matters because there’s a big distinction between the two. It’s also an answer that will help you make sense of the current sideshow entertaining most of Wall Street: Michael Lewis’s latest book, “Flash Boys: A Wall Street Revolt.”
Starting on Sunday with an interview on “60 Minutes,” Mr. Lewis introduced the concept of high-frequency trading to the general public. Before this week, I’d be shocked if more than a handful of you had used the words “high-frequency trading” in a conversation. Read more
Carl Richards, director of investor education for the BAM ALLIANCE, wrote about the tradeoff between getting a great education while incurring a great deal of debt for the NYTimes.com. Carl concluded:
“I had a conversation with several recent grads who hadn’t thought through how expensive college would prove to be and the impact of the debt on their lives. So when they asked what advice I’d offer to someone preparing to go to college, I suggested that the answer was in line with how we plan for the other parts of our financial futures: we need to start talking and asking questions about these things sooner rather than later. Read more
Carl Richards, Director of Investor Education, The BAM ALLIANCE
We’re still making the same old mistake of buying investments when prices are high and selling them once their prices have fallen. Read more
There are a lot of things that come with having children, such as sports, camps, lessons and other activities that can stretch the family budget. Carl Richards, director of investor education for the BAM ALLIANCE, writes that there are other things to consider than just money when it comes to the family budget. Read more
By CARL RICHARDS
When politicians try to persuade us to support something they want, they often invoke the middle class. They talk about protecting the middle class. They talk about how important the middle class is to the economy. But the main reason they talk about the middle class is because most of us think they’re talking about us.
It seems to me that we really like the idea of what it means to be middle class. And why wouldn’t we? Read more
Do your feelings always match your returns?