Comments on: 7 Ways to Lose Your Money

By: CALI KID

CALI KID — Sun, 29 Jun 2008 22:21:37 +0000

As soon as I saw her article’s title, I was saddened. The spread of misinformation that her article brings to the table is disheartening.

By: mbhunter

mbhunter — Sat, 28 Jun 2008 01:49:45 +0000

Consider the motivation of people giving advice. Do they stand to gain from the advice they give you?

By: Cal

Cal — Sat, 28 Jun 2008 01:30:23 +0000

| “Annie Logue from MSN Money has the answers, offering seven ways to get rich a little faster than “slowly.” There is a small problem with her advice though; the seven pieces of advice that can help you get rich are the same seven causes of total financial ruin.” |

________

The other ‘small problem’ with her advice: … if she knows how to get rich, why is she working for MSN Money writing fiction for a modest salary ??

Why isn’t she sipping champagne in her luxury villa in Tuscany ?

Why should anyone accept any of her assertions ?

By: Kyle

Kyle — Fri, 27 Jun 2008 14:57:55 +0000

I disagree with the premise that more volatility equals more return. To the contrary, a properly diversified portfolio is both less volatile AND tends to have a higher return than a more volatile, concentrated portfolio over the long term. More risk does tend to equal higher returns, but volatility is not always an acceptable proxy for risk. I do not think inflation is a problem over the long-term for an equity-oriented portfolio, since inflation will tend to increase earnings over the long run. Inflation can be devastating for bonds and cash investments, but stocks almost by definition are great inflation hedges if your time horizon is measured in decades.

By: Michael

Michael — Fri, 27 Jun 2008 13:20:53 +0000

Inflation makes things harder and can lead others to believe it’s best to abandon “the tortoise beating the hare” approach. Sure, inflation makes the amount you saved worth less in the future. At the same time however, one of the eventual byproducts of inflation is wage inflation. At that point, you will need to take an increased share of your earnings and save them. Increasing the amount you save has a huge impact with far less risk than the seven alternatives above.

I realize that’s not an answer for the majority of people today as we are in a concurrent recessionary and higher inflation environment. Recessions aren’t forever; they’re just a part of the cycle. Inflation is always here, the rate goes up and the rate goes down, but it’s always positive. Just keep the idea of saving more when you can afford to later in your back pocket, and that will dramatically reduce the odds you get to retirement with less purchasing power than you had hoped.

By: KMC

KMC — Fri, 27 Jun 2008 12:24:53 +0000

“real inflation, not government-reported inflation”

Thanks for making this distinction. The two are most definitely not the same thing.