|Losing for Winning|
There's a story of a clever incident from Abraham Lincoln's law practice days. A wealthy fellow believed he was owed $2.50. The man who supposedly owed him the money was poor. The wealthy fellow wanted what was his, howeverand, to be fair, $2.50 was probably more like $250 in those daysso he contacted Lincoln to sue the man.
Lincoln was hesitant at first, but on second thought he agreed to take the case if the man would pay him a fee of $10.00 cash in advance. The wealthy fellow agreed.
Lincoln took $5.00 to the poor man, and offered it to him if he would send $2.50 back to the rich fellow immediately to settle the alleged debt. The man, knowing a good deal when he heard one, agreedso he sent it back.
So the rich man got his $2.50from his own fee. The poor man got another $2.50. And Lincoln the lawyer pocketed $5.00. It's unclear whether what really happened ever dawned on the rich man.
Greed can cost us more than we imagine.
|Keeping Up with the Joneses|
An article on MSN Money said that one of the keys to happiness, and financial stability, is to have friends and neighbors who either make the same amount of money you do or less. The article cited a 2005 study by Glen... [Read More]
Reference: MP Dunleavey, "How rich friends make you feel poor," MSN Money (8/26/07)
|Lack of Savings|
The savings rate for America in 2006 was the lowest since the Great Depression. The Commerce Department reported that the savings rate for 2006 was negative 1 percent. A negative percent means that people spent everyt... [Read More]
Reference: Martin Crutsinger (Associated Press), "Savings rate lowest since 1933," The Arizona Republic, 2/2/07
|Saving for the Future|
An expert (Douglas Flynn) in a CNNMoney article said that if you're 30 years old you could have $1 million by age 61 just by investing $334 per month. That's based on the "historical 75-year rate ... [Read More]
Reference: "You're 30 and need $1M," CNNMoney.com, October 18, 2000
|Bankruptcies in 2008|
There were 1.06 million consumer bankruptcy filings nationwide in 2008, according to the American Bankruptcy Institute and National Bankruptcy Research Center, a 33 percent increase from 2007.
Some cities were hit e... [Read More]
Reference: Russ Wile, "Creditor troubles mount in the Valley," The Arizona Republic (1-7-09)
Supermarket chains spend large sums of money to find out what will make their customers buy more. Here are some of their tricks:
The smell of freshly baked bread from the in-store bakery when you walk in. The smell ... [Read More]
Reference: Roxie Rodgers Dinstel, “Supermarket has super tricks to get you to buy extra,” newsminer.com (10-20-08); Pat Kendall, “Supermarket Psychology 101,” ext.colostate.edu (4-7-06); “Supermarket Psychology,” caloriecount.about.com
What is the one thing your car must have if you want it to go really fast? Brakes! Without brakes, you wouldn’t dare drive over a few miles per hour. At 5 or 10 miles per hour, you could perhaps take your foot off the... [Read More]
Reference: Thomas Sowell, Applied Economics: Thinking Beyond Stage One (Basic Books, 2004), pp. 130-131
|Financial Crises: Nothing New|
Here are a couple of headlines from the news: “Soaring New Economy Stocks Go Bust.” “Corporate Corruption Scandals Threaten Market Integrity.” When were these headlines written—during the dot.com bust a few years ago,... [Read More]
Reference: Ron Blue and Jeremy White, CPA, Surviving Financial Meltdown: Confident Decisions in an Uncertain World (Tyndale House Publishers, Inc., 2009), p. 12
|The Cost of a Credit Card|
Suppose you put $2,000 on your credit card to buy Christmas gifts, pay for a vacation, or get some new clothes. If your interest rate is around 18 percent, and if you pay only the minimum monthly payment, it will take... [Read More]
Reference: Ron Blue and Jeremy White, CPA, Surviving Financial Meltdown: Confident Decisions in an Uncertain World (Tyndale House Publishers, Inc., 2009), p. 79
|The World’s Most Expensive House|
The world’s most expensive house is the Villa Leopolda on the French Riviera. It rests on a 22-acre estate that requires 50 full-time gardeners to care for its 1,200 olive, orange, lemon and cypress trees. It was buil... [Read More]
Reference: Peter Allen, “Credit-crunched Russian billionaire asks for the £39 million deposit he put down on world’s most expensive house,” dailymail.co.uk (2-18-09)]
|Household Income Plunges in 2008|
In 2008, the first full year of the recession (which began in December 2007), Americans’ household income took the sharpest drop since the government began keeping records in 1947, according to the Census Bureau’s ann... [Read More]
Reference: Dennis Cauchon and Richard Wolf, USA Today, "U.S. incomes plunged in ’08," published in the Arizona Republic (9/11/09)