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Monthly Archives: August 2016

5 Things Not to Worry About Investing

1. What the Stock Market Has Done Recently

The US stock market dropped 24.63% over the first 68 days of 2009 in the midst of the housing crisis and international financial meltdown. Bad sign, right? Sure, except that the total return for the year ended up being a positive 29%.

Or how about the two years from September 1998 to August 2000 when the US stock market increased by 25% per year, only to decrease by 21% per year over the next two years.

In other words, you shouldn’t spend any time worrying about what the stock market has done recently because it doesn’t in any way predict what it will do going forward.

2. What “Experts” Think the Stock Market Is Going to Do Next

Did you know that active investment managers underperform basic index funds year after year? Or that “expert” prognosticators are wrong more often than they’re right?

Even the experts have no idea what the stock market is going to do next. The less you pay attention to their predictions, the calmer you’ll feel and the more likely you’ll be to succeed.

3. What Your Friends Are Investing In

It’s pretty easy to read a little bit about something, repeat it to your friends or family, and sound like you know what you’re talking about. I’ve done it. You’ve done it. We’ve all done it.

So the next time you hear someone talking about how they’re investing, remind yourself of the following three things:

  1. They may or may not know more about investing than you do.
  2. They definitely don’t know about your personal investment goals and the right way to reach them.
  3. Therefore, what they’re saying is completely irrelevant to your investment plan and you can safely ignore it.

4. How Exciting It Is

Nobel Prize-winning economist Paul Samuelson is famous for saying that “Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.”

Good investing is actually pretty boring. You put a strategy in place, contribute to it for decades at a time, and stick with it through the ups and downs.

It’s not exciting, but it’s prudent.

5. Whether You Have the Perfect Investment Strategy

We all have that nagging suspicion that we could improve our investment strategy, even just by a little bit. I have it to from time to time.

But here’s the thing: there is no perfect investment strategy because no one knows what the markets will do in the future. Lots of people have ideas, but no one knows for sure.

So stop worrying about whether you could tweak your investment strategy to get it exactly right. Work on making it good enough and get on with your life.

4 Steps to Merging Finances

 1. Focus on Joint Goals, Not Joint Accounts

It’s tempting to get caught up in the logistics of joining your finances. How do you create joint accounts? Which accounts should you join? What if you want to keep some money for yourself? Does that mean your relationship is in trouble?

Ignore all of that. It doesn’t matter. At least not at the start.

What really matters are your joint goals. What are you working towards? What is your shared vision for the life you’re building together?

Start having conversations about what you each value and want out of life. Listen to each other so you can truly understand what’s important to the other person.

Find the goals you already have in common and make those the priorities. And start talking about how you can find middle ground on the others.

This communication is the real key to successfully merging your finances. All the rest is just logistics.

2. Establish Shared Expenses

Now, about those logistics…

One easy place to start is with your everyday expenses. Things like cable, internet, electricity, and groceries.

Decide which expenses you want to share and how you want to split them up. For example, if one person makes significantly more, maybe they’re responsible for a bigger share of certain expenses. That way each of you is left with some free money at the end of it.

3. Create a System

There are two main ways you can start sharing those expenses.

The first is to create a joint bank account where those bills are paid. Then you each are responsible for transferring money to that account on a regular schedule to cover the bills. This lets you practice managing a joint account without having to join everything.

Another option is to put each person in charge of certain bills. For example, one of you could handle the cable bill while the other handles the electricity bill. This kind of system may be easier to get up and running quickly.

Also, create a system for long term savings. I know someone who gave half their paycheck to their partner to invest for the long term. This might not be the right move for you, but start by discussing each of your current habits and how you might change those or improve on them as a couple.

4. Plan for Extra Money

Here’s something my fiance and I have done that’s helped us a lot.

In addition to our regular expenses and savings, we each have a number of “wants” that our extra money could go towards. For example, I’d like to get curtains and my fiance wants gardening supplies.

So we made a list of these things and put them in priority order. And now any time we have some extra money, we simply refer to this list and put it towards the top item.

This makes these decisions easy, limits the opportunity for arguments, and ensures that we’re both able to indulge a little bit.

Top 5 most Ridiculous Recent Firings

 5. Lowering a Flag on Memorial Day

Let’s all agree on a few things for the survival of decent society, O.K.?

Number one, do not harass coffee shop clerks who don’t stroke your holiday ego. They are not in charge of compensating for your discovery that Santa isn’t real; they’re here to make lattes.

Number two, we can and should all chew with our mouths closed.

Number three, when a soldier lowers the flag to half-mast on Memorial Day in honor of some lost friends, the absolute, literal least you can do is leave the guy alone to his ceremony.

Apparently this last was too much for a Charlotte company, which reportedly chose to fire Marine Corps veteran Allen Thornwell for doing just that. His employer said that it was disturbed by Thornwell’s “passion for the flag and (his) political affiliation,” and that’s the double edged sword of at-will employment. Thornwell will hopefully find work soon, but his employer was perfectly free to let him go.

4. Plain Old Racism

Let’s revisit social media, because it’s something we will all have to continue getting used to. As Millennials scrub their online footprints, terrified that even an innocent happy hour could cost them their job, other users take… a different approach.

Consider, for example, Jane Wood Allen, an employee of the Forsyth, Georgia school district who was fired for a Facebook post about First Lady Michelle Obama that began with “This poor Gorilla.”

Allen’s story is nothing all that rare, but it raises a particularly thorny issue. You see, while Forsyth County’s decision to fire Wood makes sense from a standpoint of damage control, it may not be legal. As a public employer, schools have to respect some First Amendment rights of their staff.

Private statements made on private time from Wood’s own computer may be well beyond the reach of a school district to punish her for… no matter how good the reason.

3. The $15,000 Firing

When is a firing just not worth it? When it costs a decent portion of the employee’s salary just to sort everything out.

Yet that’s precisely what happened with a Decatur, Ga. school after it fired a popular media clerk. In the aftermath of Susan Riley’s termination, allegedly over misuse of a school iPad, questions began popping up. To its credit, the district launched an investigation into what actually happened and whether to reverse Riley’s firing.

After $14,757 in fees to a local attorney, it finally decided that a mistake had been made.

2. Conspiracy Theories

The case of Florida Atlantic University Professor James Tracy is an interesting one. In a nutshell, Tracy was fired for his long standing campaign that the Sandy Hook shooting never happened. This includes a blog, comments in any media he can find, and what parents of one victim have described as a pattern of personal harassment.

As a result, earlier this year he was fired from his tenured position at FAU for, among other things, using his university credentials to advance his cause. His subsequent lawsuit has been dismissed without prejudice.

1. Being Gay

You’d think this wouldn’t be a problem in 2016, but here we are reporting on the case of a Minnesota banker who got fired for coming out.

After working for years in the family business, when Stephen Habberstad came out to his wife and siblings, the fallout reached well past his personal life and into his employment. During the divorce, he had to surrender enough stock to lose control of the family bank, which set the dominoes in motion for his speedy termination.

Amazon May Be About to Pummel America’s Clothing Stores

 Amazon (AMZN) appears to have ambitions to upend the clothing industry, and retailers from Gap (GPS) to Lululemon (LULU) should be frightened.

As TheStreet has reported, based on several recent job postings on Amazon’s site it’s planning to develop its own line of workout apparel. Wall Street is mixed on the potential for Amazon to develop a strong presence — and disrupt the old guard — in the athletic apparel space, however.

“Just because Amazon sells something, it doesn’t mean they’ll blow the competition out of the water,” said Simeon Siegel, executive director and retail analyst at Instinet

There are clear winners in the athletic apparel space and they win because of their product, strong brand loyalty, who’s sponsoring them and what they stand for, Siegel said.  While a workout clothing line from Amazon is “not a good thing,” he does not think athletic behemoths such as Nike (NKE) and Under Armour (UA) should be “quivering” because the e-commerce giant is entering the space.

Bridget Weishaar, senior equity analyst at Morningstar, also does not believe an Amazon athletic apparel line would have a big effect on sportswear giants right away.

“I don’t think it’s going to have much of an impact especially in the near term,” Weishaar said, “Especially with Lululelmon, it’s more than just the apparel itself.”

Lululemon hosts yoga classes in its stores and the company is more of a “culture and lifestyle,” Weishaar explained. The retailer has brand loyalty, ambassadors who wear the products and has a feeling of community, which is “much harder to break.”

Because Amazon is not a brick-and-mortar retailer, it also doesn’t have the background of trust in the quality, she added. “You can’t walk into the store to touch the product,” she said, so convincing a customer to purchase an item may be more difficult.

It’s also time consuming to build a brand, she said.

While Nike and Under Armour have less of a community feel in their stores than Lululemon, they have built their brands for many years and have customer loyalty. Quality is also really hard to match, especially quickly, Weishaar noted.

Even still, Amazon looks poised to take on the challenge of getting bigger in the clothing space.

Having mixed success in luring top fashion apparel brands such as Calvin Klein and Levi Strauss to sell on its site, Amazon has taken matters into its own hands. Last year, the company opened photo studios in New York and London, and has begun selling a host of private label apparel brands. It also launched a free daily show dedicated to fashion.