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Category Archives: Financial Dictionary

When Should You Put Yourself First with Your Finances?

Were often told that selfishness is a real problem. Were supposed to be helpful to others, and giving.

In our society, giving to charity??and helping family and friends are considered virtues. But are there times when it makes sense to be a little selfish? Maybe putting others first, especially when it comes to money issues, isnt the best plan.

Sometimes you need to put yourself first.

On an airplane, during the in-flight safety demonstration, you are always advised to put your own mask on before you put on someone elses, says Julia Chung, CFP, with Facet Advisors Wealth Strategies. Finances work the same way. If your finances are not sufficient to take care of your own lifestyle, you are simply not in the position to take care of the lifestyles of others.

Chung points out that there are lots of circumstances in which others ask for your help but its probably best not to give it.

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Landlords warned of buy-to-let mortgage rate rises

Rates on buy-to-let mortgages are set to rise in coming months, a study has warned.

Landlords, along with other buyers, have benefited from the Government’s Funding for Lending Scheme in the past year with the cost for a five-year fixed rate for those with a 25pc deposit tumbling from from 6pc to just over 5pc, including fees.

But the report, published by Mortgages for Business, warned that comments from central bankers about improvements in the economy had moved money markets enough to force a rise in the rates offered to landlords.

The report said: “In what may turn out to be the most significant change for many months, the steady drop in rates appears to have halted and five year fixed rates are now around 0.2pc higher than they were at the end of May.”

Fixed rate mortgage pricing is heavily influenced by “swap rate” markets.

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This and That: Zweig column, Kahneman interview and more???

In an excellent column in The Wall Street Journal Jason Zweig says that though the market constantly changes, sound advice rarely does.

Daniel Kahneman Interview

In an interview with The Motley Fool behavioural economist Daniel Kahneman discusses his field, his book and how his insights could help investors.

Designing an ultimate portfolio

The article is aimed at US investors but this Paul Merrimans article in MarketWatch offers a step-by-step process for designing what he calls an ultimate buy-and-hold strategy.

Is Smart Beta all that smart?

An article in The Economist magazine wonders if the new trend towards smart beta capturing excess returns than the market by deviating from traditional capitalization weighted indexes will suffer the same fate as alpha seekers.

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Verizon Wireless (VZ) Could Owe Apple (AAPL) $14 Billion

Verizon Wireless and Apple shareholders might be soon facing an interesting dilemma. When Verizon initially inked a multi-year deal with Apple back in 2010, it agreed to iPhone purchase commitments in which it promised that a certain amount of iPhones would be sold annually. Since sales of Apple iPhones and other smartphones have cooled down considerably from three years ago, Verizon could owe Apple up to $14 billion for the sales shortfall. Under the terms of the deal, Verizon Wireless needed to sell $23.5 billion in iPhones in 2013. In 2012, Verizon sold less than half that number, which means that it is unlikely that Verizon can hit its previously agreed sales target.

Daily Chart

Most analysts forecast a 22% year-on-year decline in iPhone sales during the current quarter. As a result, Verizon could face a shortfall between $12 to $14 billion for the year, which under the terms of the agreement, the company would have to pay Apple.

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Your Take: Is Our Tax System Fair?

When Miranda approached me with the idea for this mornings story, based on what she recently read in a CBO report, I thought it would make for an interesting (and lively, as all political and tax related Your Takes tend to be!) topic of discussion on the eve of the 4th of July. Well be taking tomorrow and Friday off but I wanted to discuss this before everyone left for the weekend, so we accelerated the Your Take to a very rare Wednesday afternoon. Hopefully youre all still here and can chime in.

Personally, I think our tax system is overly complicated because its a series of tax breaks and tax punishments to incentivize and penalize certain behavior.

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Savers warned of further rate cuts with FLS to expand

Savers should be braced for further falls in rates amid fresh reports of an extension to the Government’s Funding for Lending Scheme (FLS).

Chancellor George Osborne George Osborne may announce an expansion of the ??80bn scheme before a visit to Britain by the International Monetary Fund (IMF) next month.

The organisation has previously criticised both the extent and timescale of the Treasury’s austerity measures.

The extension to FLS would be offered on the condition that the loans are made to small and medium-sized businesses. The whole’s scheme lifespan is also expected to be extended from January 2014 to January 2015.

To date, the scheme’s most notable impact has been to reduce mortgage rates rather than boost lending to firms.

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This and That: Money in a mattress, falling markets and more???

Stuffing money in a mattress literally!
From the why didnt I think of that file here is an interesting story on Bloomberg TV about a mattress maker in Spain who is tapping into todays mistrust of the banking system by selling a mattress with a built in safe.

Falling Markets are a good thing!
Stocks, bonds, REITs, commodities and even good old bonds are falling like nine pins lately. The Wall Street Journals Jason Zweig says that if you are going to be accumulating assets for the next little while, lower asset prices are good for you (though it might not seem that way).

Things to avoid at garage sales
If you are going to shop at garage sales this summer, Readers Digest offers a list of items to avoid. It seems to me that avoiding items on the list such as bike helmets are just common sense.

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