Recovery from Financial Disaster

Recovery from Financial Disaster

Ever wonder how you’d handle a complete reversal of your finances? I have a friend who had a lifestyle most people would envy and lost everything, including her marriage. I didn’t meet her until after her recovery from her financial disaster. She is one of 

Credit Cards: What You Need to Know

Credit Cards: What You Need to Know

Credit cards are a terrific convenience but also can be very costly.  Effective use of a credit card can make life easier and improve your credit score.  On the other hand, credit cards are an example of bad debt. It is easy to buy more 

The Basics of Loans: What You Need to Know

The Basics of Loans: What You Need to Know

Loans are the financial instruments people use to borrow money.  Whether they are getting a mortgage to buy a house, borrowing money to buy a car (as opposed to leasing or paying cash as discussed in this post),  or other large purchase, not paying off 

What is Diversification and How Does it Work?

What is Diversification and How Does it Work?

One of the key concepts used by many successful investors is diversificationThe reduction in volatility created by combining two or more processes (such as the prices of financial instruments) that do not have 100% correlation. More.  In this post, I’ll define diversificationThe reduction in volatility 

Financial Decisions – Risk and Reward

Financial Decisions – Risk and Reward

Almost every financial decision is a trade-off between reward and riskThe possibility that something bad will happen. More.  In this post, I’ll use three examples to illustrate how financial decisions can be made in a risk-reward framework.  The examples are: Deciding what to buy with 

Financial Risk: An Introduction

Financial Risk: An Introduction

Understanding financial riskThe possibility that something bad will happen. More is key to making sound decisions.  Many people don’t have a good grasp on what riskThe possibility that something bad will happen. More means, particularly in a financial context, so I will focus this post 

The Scoop on Credit Scores

The Scoop on Credit Scores

Credit scores are one of the most important financial numbers.  Credit scores not only affect the interest rateThe percentage which, when multiplied by the face amount or principal of a financial instrument, such as a bond, savings account or loan, determines the amount of interest 

When Is It Good to Pay Off Student Loans

When Is It Good to Pay Off Student Loans

 This week, I’ll conclude the case study about Mary and her savings.  Her last question focused on whether to pay off her student loans.  The considerations include: The interest rateThe percentage which, when multiplied by the face amount or principal of a financial instrument, such 

Retirement Savings/Saving for Large Purchases

Retirement Savings/Saving for Large Purchases

Case Study To help set the stage, I created a fictitious person, Mary, whose finances I use for illustration. Mary is single with no dependents. She lives alone in an apartment she rents. She makes $62,000 per year. Mary has $25,000 in a savings account 

Savings Framework and Emergency Savings

Savings Framework and Emergency Savings

You may be thinking you’d like to get started with investing.  Before doing that, you’ll want to look at how much savings you have and how much you can invest.  In this three-part post, I’ll illustrate a framework to guide savings and investing decisions, key