An economics professor of mine once told me that “an opportunity cost is an opportunity lost”. And his argument for it made perfect sense. By not moving for something at one point, and losing the opportunity to strike when the iron is hot, you must pay more for something later on when you realize that the boat has moved on and that you should have invested in what was the real McCoy. But the more I think about it now, the more I feel that maybe, just maybe, an opportunity cost is a mind money concept and it is not a real loss, just a theoretical one. Let me give you an example, although not in investing terms. A few weeks ago, I was looking to book an air ticket. I did an online search since it was the fastest option and I stumbled upon what I felt was the best price available at the time after some searching around. I was in office and decided to take some time on the commute home  [...]

...and if I were to sum up this whole article in just one sentence, it would be this; don't put all your eggs in one basket. Let's assume you've been a good boy and Santa is mighty pleased with you because you've been saving up all year while ignoring the siren call of consumerism. You're in a good place if that has happened, and you have zero debt and are able to regularly save up for whatever unforeseen expense you might have come your way. But all is not rosy even then. If you have money saved up, that's just one part of the deal done. You have to invest it, or inflation will end up eating it up. That's why you need to understand the importance of asset allocation. What kind of investing options do you have on hand? Let's say you have something like $10,000 to invest. The first thing I would be concerned with, if I were you, would be to not lose that money at all. $10,000 is a lot of  [...]

It happens every so often that you find that someone says something that is eye-opening and insightful. On such occasions, everyone can pick up a lesson or two from that which has been said. In case you're wondering what the hell I’m on about, bear with me for a few more minutes and I’ll explain to you exactly what I’m getting at. Recently, I was speaking to a rather intelligent 18 year old about retirement investing. Of course, being the wizened old pro in the discussion, I brought up the topic of a 401k plan. This was my opening gambit followed by a Roth IRA. With time, I managed to pique his interest enough to get him to ask exactly how much he would stand to gain if he invested in peer to peer lending services such as Lending Club coupled with an IRA and a 401k plan. In a way, I was glad that the topic of Lending Club came up. I explained to the lad exactly how the returns on  [...]

A friend of mine (let's call him Roger) was talking to me recently and told me he was in a bit of a fix. He wanted to take the leap and indulge in some long term investing. After some thinking and some research, he had settled upon two possible funds with which he was to begin his baptism by fire. But as any beginner might be, he's a bit nervous and unsure as to his choices so he ran them by me. Now, he's wondering how to get things started and he's looking for me to give him a push in the right direction. Now, his favored choice (Fund 1 from this point on) requires a minimum of $10,000 by way of long term investing. His second choice fund (Fund 2) has a far lower minimum investment demand of $3,000. His problem is a simple one; he wants to invest in Fund 1 but doesn't have the money for it right now. In the meanwhile, Fund 2 is tapping away at his mind and begging for him to invest in  [...]

If anyone can, I would dearly love to hear why instituting flat taxes is unfair. Answers on a postcard please as far as possible. First of all, I don't know what sort of understanding you, the readers, have about the issue itself. On a percentage basis, each person pays an equal amount of their income by way of taxes. And if you were to look at it in absolute terms, richer people pay a lot more since their income is a lot more than most people. This is why I say flat taxes are the way to go, but whenever I have observed discussion on the topic I have heard fierce opposition on this issue. But till date, I have not heard one cogent, reasoned argument as to why flat taxes would be unfair for America. In fact, things have been reduced to such a farcical situation at times that I feel increasingly absurd alternative proposals will see the light of day. Perhaps we'll all draw straws to see  [...]

Microfinance loans are an example of something that is very rarely found. It is an anti-poverty tool that at the very worst will at least break even. There is something odd about the belief system here. Loans made to large businesses with well-off individuals might or might not be repaid, but the rate of repayment for these smaller loans to poor people is a lot better. That is perhaps why microfinance loans have taken off as they have, especially in Bangladesh and in India. Each of these two nations have some 30 million microfinance loans out in circulation at this moment of time but strangely enough the industry has faced criticism that it is too commercial a business. In Bangladesh, for example, the government has placed a cap on the annual interest rate that can be charged for microfinance loans issued by microfinance institutions. That rate is 27% at most and in India it is an even  [...]

Apple Inc has been flying high on the success of its App Store and its iOS apps have powered its growth in an unimaginable manner. Vodafone Group Plc, France Telecom SA and several other phone companies have been left trailing in the wake of the services offered by Apple Inc., Google Inc. and Facebook Inc. when it comes to the one area that will be decisive in deciding market share. Simply put almost none of these telecom providers can keep up with, far less beat, the explosive growth of iOS that has benefited Apple immensely. Now efforts are being made to make up lost ground, but it might be a case of too little too late. Of late, these telecom providers have been reduced to little more than a carrier of the services offered by Apple and Google, amongst others. And while they have their own app store offering, iOS apps have ruled the roost to the point where telecom provider released  [...]

Are you one of several whistle-blowers across the nation caught in two minds, wondering whether you should spill the beans or not be a dirty snitch? Do you know a secret that you're dying to tell, but fear indicting others if you do so? Well, then you're in luck! In the late 1980's, when several insider-trading scandals rocked the financial markets, lawmakers and regulators instituted a program that rewarded whistle-blowers. Under the ambit of this program, regulators were allowed to reward any tipsters that unveiled manipulation and deceit at the time. But that effort was a failure, rather surprisingly and much to the chagrin and surprise of onlookers. The reason for this was that the issue of whether or not a reward payment should be made at all was left to the judgment of the regulators. This is perhaps the only reason why the pitiful sum of $160,000 was paid out over the course of  [...]

It has now been two years since the financial crisis was fully upon us, and never has a body blow so heavy been dealt to the global economy since the great depression of the '30s. In collaboration with policy and decision makers based at home and overseas, the Federal Reserve has attempted to stabilize the American economy with wide-ranging and forward looking measures, but it seems to run into a brick wall every time it looks to make headway on this front. In fact, so committed was the Federal Reserve that it relaxed its monetary policies not once, but twice in an effort to ease things over, never mind the fact that it also cut short-term interest rates to very nearly zero. The Federal Reserve also picked up more than a trillion dollars worth of securities from the Treasury as also mortgage securities. These steps, among others were initiated so that the slide down a slippery slope could  [...]