It's easy to think of your house as an investment. As the value of your home goes up, you'll naturally feel wealthier. Homeownership gets drilled into our heads throughout our lives, and rightfully so. It is one of the main drivers to your net worth. While homeownership is a great aspiration, you can fall into the trap of treating your home as an investment. Doing so could … [Read more...] about The Consequences of Treating Your House as an Investment
Learn How to Negotiate Your Salary by Anchoring
When you negotiate your salary, should you throw out the first number? If you would rather wait for them to say the number first, you could be costing yourself a lot of money. Knowing how to negotiate your salary is crucial to maximize your income. By saying the number first, you will anchor the other party to the number you give. Whether they like it or not, the rest of your … [Read more...] about Learn How to Negotiate Your Salary by Anchoring
When You Budget a Car – Follow the 1/10th Rule
Cars are one of the poorest investments you can make. After 5 years, the average automobile will depreciate by over 60%, so keep that in mind when you budget for a car. Since the average price of a new car is roughly $35k, this means that the average new car buyer will lose $21k over 5 years. When you consider the opportunity cost, they would have had over $90k had the $35k … [Read more...] about When You Budget a Car – Follow the 1/10th Rule
Build A Budget with Opportunity Cost in Mind
It's important to know the future value of your savings when you build a budget. A simple way to keep this in mind is to know your opportunity cost of saving. What is Opportunity Cost? Opportunity cost is a key concept of economics, which represents the scarcity of choice. You only have so much time and money, and opportunity costs are the costs incurred by not enjoying … [Read more...] about Build A Budget with Opportunity Cost in Mind
Don’t Try Market Timing – Missing a Few Days Can Tank Your Returns
Many people try market timing, following the old adage to "buy high and sell low". This is especially true when the market goes south. People are either proud that they sold at the top, or regret holding on to stocks during the downturn. How well does the "buy high, sell low" adage work in practice? According to a study by Fidelity, it doesn't. They found that the decisions … [Read more...] about Don’t Try Market Timing – Missing a Few Days Can Tank Your Returns