Continue reading Millionaires Are in a Funk Too

Millionaires Are in a Funk Too originally appeared on BloggingStocks on Wed, 25 Aug 2010 15:30:00 EST. Please see our terms for use of feeds.

Continue reading It Won't Be Easy to Get the Money Out of U.S. Politics

It Won't Be Easy to Get the Money Out of U.S. Politics originally appeared on BloggingStocks on Mon, 22 Feb 2010 17:00:00 EST. Please see our terms for use of feeds.

Continue reading Kim Jong Il Takes Back Wealth Limits, Copes with Cell Phones

Kim Jong Il Takes Back Wealth Limits, Copes with Cell Phones originally appeared on BloggingStocks on Mon, 28 Dec 2009 14:30:00 EST. Please see our terms for use of feeds.

Continue reading How fragile are stock returns?

How fragile are stock returns? originally appeared on BloggingStocks on Thu, 08 Oct 2009 17:20:00 EST. Please see our terms for use of feeds.

Continue reading Russia's oligarchs lost 73% in 2008

Russia's oligarchs lost 73% in 2008 originally appeared on BloggingStocks on Fri, 17 Apr 2009 13:30:00 EST. Please see our terms for use of feeds.

Continue reading Americans' net worth falls $1.7 trillion in Q1

Americans' net worth falls $1.7 trillion in Q1 originally appeared on BloggingStocks on Fri, 06 Jun 2008 15:55:00 EST. Please see our terms for use of feeds.

The New York Times reports that getting wealthy all of a sudden can be a problem. But of all the problems one could face, I think it's a pretty high class one.

Here are three examples:

• Ken Jennings won $2.5 million ($1.5 million after taxes) -- after prevailing in 74 consecutive Jeopardy games. He moved into a bigger house in Seattle and now designs board games.
• Laurel Touby sold website MediaBistro for $26 million and found that her $11 million share was not enough to afford a private jet.
• Elwood Bartlett, a Maryland accountant, won $84 million in a lottery last summer -- $33 million after taxes. He gave away $200,000 to the Special Olympics but gets lots of requests for more charity.

One financial adviser recommends they splurge with 5% to 10% of the money. Jennings' Advice? "put your money somewhere not idiotic and leave it alone as much as possible."

What do you think these sudden wealth winners should do?

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter.

Tribulations of the suddenly wealthy originally appeared on BloggingStocks on Sat, 29 Dec 2007 09:17:00 EST. Please see our terms for use of feeds.

A new report from the Congressional Budget Office has a pretty startling finding: From 2003 to 2005, the income growth of the top 1% of American income earners exceeded, by 37%, the total earnings of the bottom 20%.

It sounds bad -- it is, after all, about as compelling evidence as you'll find of increasing income inequality. The lowest-earning fifth of households had total income of $383.4 billion in 2005, while the richest 1% saw their earnings increase by $524.8 billion.

One factor was the appreciation in the stock market over that period, with about half of the earnings growth of the top1% coming from investments and business ventures.

Jared Bernstein of the Economic Policy Institute told the New York Times that "A lot of people justifiably feel they are working harder and smarter, they are baking a bigger and better pie, and yet their slice is not growing much at all. It is meaningless to middle- and low-income families to say we have a great economy because their economy looks so much different than folks at the top of the scale because this is an economy that is working, but not working for everyone."

This is bad news for the Republicans, who are facing pretty long odds at maintaining control of the White House. While they can point to economic growth over the past few years, the reality is that working-class Americans saw an increase in their income that is barely significant -- Wealthy Americans cleaned up.

The actual importance of income inequality is a debate that has no end in sight: Does the fact that rich Americans saw their earnings increase a lot really have anything to do with the lowest 20% of income-earners? It doesn't matter because it still make for great election-year rhetoric.

Rich getting richer faster -- Does it matter? originally appeared on BloggingStocks on Sun, 16 Dec 2007 10:10:00 EST. Please see our terms for use of feeds.

Seems the world economy is growing and changing so fast that staying on top for very long will become harder. Carlos Slim of Mexico did not retain the title very long, as CNBC is reporting Meet the World's New 'Richest Person' -- For Now, a story about Mukesh Ambani. It has been reported that he is just completing a ONE BILLION DOLLAR HOME! Here's how the Indian press reports rank the world's top five richest people as of today, based on known public stock holdings:

• Mukesh Ambani - $63.2 billion
• Carlos Slim Helu - $62.2993 billion
• William (Bill) Gates - $62.29 billion
• Warren Buffett - $55.9 billion
• Lakshmi Mittal - $50.9 billion

What's more important is who is taking what actions. What are these supernova rich guys doing with their wealth? In the case of Gates and Buffett, they have become the world's biggest philanthropists. Carlos Slim has expressed a desire to share his wealth as well by setting up a $10 billion foundation -- I'm not sure how far he has gone with that idea. Mittal is still busy buying up all the steel production on the planet, and is now the largest player in the market. That will increase his wealth for now. On the other hand, the Hunt Brothers of Texas thought that way in the 1970s about silver, and found out rather quickly that was not their brightest idea. Steel is likely a much better bet.

Continue reading World's richest is Mukesh Ambani: Billion-dollar decisions from a billion-dollar home

World's richest is Mukesh Ambani: Billion-dollar decisions from a billion-dollar home originally appeared on BloggingStocks on Mon, 29 Oct 2007 20:14:00 EST. Please see our terms for use of feeds.

The rapidly developing economies led by China, India and Russia, are making the folks at jeweler Cartier salivate with even grander plans to promote themselves as the world's premier jewelers. They have unveiled bobbles and bangles suitable only for the super wealthy. In the past, this might have been the territory of the U.S., Western Europe, Japan and the Middle East. But the game has changed.

Cartier is not the first luxury house to look east. A Japanese or Chinese aesthetic has starred in collections from Giorgio Armani to Aquascutum, while the craze for embroidery and pattern filling runways owes a debt to India. ... The reasoning is clear: the wealth of the world's richest people -- who have at least $1 billion ready to invest -- rose to $32.7 trillion last year, up 11.4 percent, with China and India leading the way, the latest Merrill Lynch Cap Gemini World Wealth Report showed.

Continue reading Cartier glitters over Chinese, Indian & Russian wealth

Cartier glitters over Chinese, Indian & Russian wealth originally appeared on BloggingStocks on Tue, 25 Sep 2007 18:40:00 EST. Please see our terms for use of feeds.

Stupidity is no barrier to wealth: That's the conclusion of a study by Jay Zagorsky, a research scientist at Ohio State University's Center for Human Resource Research. Based on a study of 7,403 Americans who participated in the National Longitudinal Survey of Youth, Mr. Zagorsky found no correlation between IQ and wealth: "Those with low intelligence should not believe they are handicapped, and those with high intelligence should not believe they have an advantage."

But here's what really interesting: Smart people do earn more money. They just aren't particularly likely to save and invest it, which is a recipe for creating wealth. According to the data, each extra IQ-point coincided with an extra $202 to $616 of income a year

So smart people earn more money but apparently fritter it away (Mensa memberships perhaps?). So does that mean that saving money is stupid? Or, are smart people just not very smart when it comes to money?

A fool and his money -- not necessarily parted originally appeared on BloggingStocks on Sun, 06 May 2007 14:40:00 EST. Please see our terms for use of feeds.

You don't have to be smart to be rich originally appeared on BloggingStocks on Wed, 25 Apr 2007 17:55:00 EST. Please see our terms for use of feeds.

Many people like to dream up ways to get rich quick. Many people dream about inventing great things that could make them wealthy in a hurry. I often think about money also, but just in case you haven't figured it out yet, please be warned that I have some unconventional ways of thinking.

The money question I wish to place before you today is a concept which I have never gotten a decent answer to. When I pose this question I get blank looks, shrugged shoulders, an occasional sneer, and most often a good hearty "who cares!" Be that as it may, I place my query here for you today in the hope that I might get at least one good answer. Here's the question:

What would be the immediate and long-term economic effects if the United States, Canada, and Mexico were to equalize their currencies and maintain a neutral currency exchange rate?

There, now that's not such a stupid question is it? I'm sure that the question has already been fully addressed in other forums and I would very much welcome any links that readers could provide to appropriate discussions of this concept. I welcome any and all answers. Thanks in advance for your time.

Rich in America (in Canada and Mexico too): A penny for your thoughts originally appeared on BloggingStocks on Sat, 14 Apr 2007 14:10:00 EST. Please see our terms for use of feeds.

Sotheby's (NYSE: BID) and GE Money have teamed up to launch a Sotheby's MasterCard (NYSE: MA). Predictably, the card is aimed at wealthier consumers, and even gives them a chance to earn donations to their favorite museums. From the Wall Street Journal:

A cardholder who has charged $10,000, for example, can convert the 10,000 earned points into a $100 donation to one of 17 U.S. partner museums [...] Anyone accumulating 2.5 million points can book a Sotheby's specialist to conduct an auction for a charity event.

The piece goes on to note that some museums have been slow to sign on, preferring to go with relationships they already have. I'm really happy to see the consumer credit industry focusing some energy on higher net worth individuals (you need an income of 100k+ to qualify for the card). As you will learn from reading the book Maxed Out, the industry seems to relentlessly target those customers who can least afford it. Perhaps Sotheby's and MasterCard will show that there is money to be made providing credit to customers who can afford it, while also supporting the arts.

Sotheby's/Mastercard debut yuppycard to mixed reviews originally appeared on BloggingStocks on Fri, 13 Apr 2007 14:01:00 EST. Please see our terms for use of feeds.

The TradeKing blog posted a nice review by Dominic Basulto of the May 2007 cover story of Kiplinger's Personal Finance. that pointed out some old tried and true investment strategies that are still the best way to build financial wealth over time.

While these strategies are nothing new, they should be reaffirmed from time to time.

Kiplinger's suggests that you consider the following when looking to consistently build your investment value over time:

1.) Get involved in a sector which has been underperforming for a considerable period of time and is showing strong signs of picking up. Consider Warren Buffett's railroads play. Could he be on to something?

2.) Keep a look out for "breakout technologies". I suggest keeping a close watch on solar and artificial intelligence plays as well as RFID. Basulto suggests telecom and biotech.

3.) Higher risk generally provides higher returns. Do ya think? Play the volatility game. This requires nerves of steel and a lightening hand but if you're good, the returns can be immense. It's like betting on the horse that's straining at the gate and sweating before the run. Either that pony will run uncontested or it'll spin circles in the first length. Volatility plays best if you're a heavy duty behind the scenes researcher.

4.) Look for fundamentally strong companies which have floundered under poor management and then wait for a management change. I have watched several people successfully work this angle.

The Kiplinger article seeks to provide insight into the strategies for compounding your money over various time frames. The information provided is valuable and time tested but Kiplinger's makes clear that they suggest a longer time table shall provide you with greater investment security.

Kiplinger's suggests time tested strategies for building wealth originally appeared on BloggingStocks on Thu, 12 Apr 2007 17:30:00 EST. Please see our terms for use of feeds.

While Robert Kiyosaki (of Rich Dad, Poor Dad fame) has railed against mutual funds for years (while simultaneously suggesting multilevel marketing schemes), it appears that he may have been right: rich people really don't seem to like mutual funds. According to a study discussed in the Wall Street Journal (registration required) few wealthy investors are satisfied with the performance of their mutual funds. With good reason: over the long-term, passively managed index funds outperform most mutual funds.

One of the few fund companies that earned high marks from high net-worth investors is Vanguard Group, which was among the first companies to offer mutual funds. Vanguard still offers some of the lowest cost index funds around and, if you only choose one fund company for your retirement planning, Vanguard may be the way to go. Congratulations Vanguard, and keep up the good work.

On a side note, Vanguard founder John Bogle has written some amazing books about business and investing: Common Sense on Mutual Funds and The Battle for the Soul of Capitalism belong on the bookshelf of every serious investor. If Common Sense seems too intimidating, pick up his new Little Book of Common-Sense Investing instead. While it really is a little book, it has everything you need to know to beat the vast majority of professional money managers.

The rich don't like mutual funds, but Vanguard is a standout originally appeared on BloggingStocks on Sun, 25 Mar 2007 12:10:00 EST. Please see our terms for use of feeds.

I've noticed that there hasn't been a whole lot of ballyhoo about the communist party setting up its tent in the Chinese branch of Wal-Mart Stores, Inc. (NYSE:WMT). I'm thinking that possibly most of you are seeing this turn of events in the same way that I am. Personally I think this is more of a dilution of the classic "red" communism than the rise of collectivism into an American corporation. Even the communist party dialog in this scenario gives hints that capitalism is once again prevailing. Did you doubt that it would?

Jonathan Dong, a Wal-Mart China spokesperson is quoted as saying, "Quite a few of our associates (employees) are party members already, so they have a right to establish branch organizations."

Did you catch that? Here it is in American line item style: "associates ... have a right." Since when did a communist have a right to anything in their party line thinking? Communists have privileges and responsibilities to serve the party's declared objectives. Historically they have no rights... at least not until Wal-Mart and Best Buy (NYSE:BBY) got there.

My apologies to the socialists out there but I'm declaring this one a victory for our side. China is in the hands of supply side, trickle down economics now. The government is instructing the workers to be good, work hard and build their companies. Hmmm, that sounds kind of American to me. Can the time be far off when the Chinese government realizes that they can create greater wealth and power by opening their business structure to increased investment by their public? Does the Chinese government realize that they have finally and completely opened their doors to free enterprise?

This is a situation that we're going to be watching very closely. It was capitalism that finally crushed the USSR and freed the Soviet population. It was capitalism that brought down the Berlin Wall and reunited Germany. It is capitalism that has kept Cuba and the Korean communists at bay. It is capitalism that has kept the Chinese fed.

Let's face it folks, socialist collectivism is gasping for its last breath ... and it's about time.

Comrade Wal-Mart associate! originally appeared on BloggingStocks on Wed, 20 Dec 2006 10:31:00 EST. Please see our terms for use of feeds.

Money & Finance Today - 12/11: Wealth-building rules, Internet drug scams, keys to cashmere originally appeared on BloggingStocks on Mon, 11 Dec 2006 09:22:00 EST. Please see our terms for use of feeds.