Yes, it still makes sense to use leverage today. Let me explain… 🙂 Leverage in a higher interest rate environment My margin interest rate used to be just 1.8% last year. Borrowing money at this low rate to buy stocks was a no brainer since the stock market returns on average way more than that. However, today my… Read More »
Who does higher interest rates hurt the most? The obvious answer is people who have variable rate mortgages. But there’s a group of people that are even more at risk, and are hurting more from the impact of higher interest rates. They are renters. Why renters? Because as the cost to borrow becomes more expensive, would-be buyers who… Read More »
What’s new in the new year Last year I set out 5 goals and accomplished 4 of them. Not bad overall. 🙂 The act of writing down goals, and tracking them over time has helped me so much. This year I have 6 new goals. You can check out my new video explaining each one, or continue reading… Read More »
The world is not fair Personal finance is like peanut butter. You can’t spread it too thin.😀 That’s why there are consequences for taking risks. But sometimes people can reap the rewards for their actions, but not accept any of the risks. Wall St. executives walk away with millions of dollars while their clients lose money. Pro war… Read More »
How negative real rates distort everything Normally a mortgage is a liability. And bonds are a low risk, low return asset. However when real interest rates are negative you can throw these conventional concepts out the window. The graph below shows the difference between a government bond yield and inflation (CPI.) The economy experiences negative real rates when… Read More »
The US dollar fell last month and probably has further to drop. The US is facing massive stagflation pressures as it deals with rising prices, but no economic growth. This happened before in the 1970s. Here are 3 primary catalysts explaining why it’s happening again today. The US government butchered the pandemic response compared to other parts of the world… Read More »