I thiiiiink I’m going to just clear out a good chunk of my savings and pay off $12,600ish in student loan debt in one full go.

6.8% interest accrued daily means that I’m paying $135 just in interest per month, with a measly $7 directed to my principal. That’s over $1700 a year just to make an $84 dent in the debt. 

If I keep that up, I’m screwing Future Me over constantly. It’s better to just bite the bullet. It’s a big splurge, to be sure, but I’d still have enough in savings to pay all my bills for at least a year, worst case scenario. So it doesn’t seem that risky to just shoot my wad and be free of debt. 

Does that make sense? Am I missing out on any benefits of making monthly payments, other than improving my credit score?


Bill Gross: Fed to Raise Rates in 2015 to End Distortions

Bill Gross, a fund manager at Janus Capital Group Inc. and former chief investment officer of Pacific Investment Management Co., talks about the outlook for Federal Reserve policy, the U.S. economy and stocks. Gross speaks with Stephanie Ruhle and Erik Schatzker on Bloomberg Television’s “Market Makers.”


Too Many Condos in New York City?

Million Dollar Listing New York Broker Ryan Serhant and AOL BBG Ventures President Susan Lyne discuss the New York City real estate and rental market on “In The Loop.”

The way the crisis was handled alienated a large section of the Greek public from the EU. The original measures were considered excessive, as in fact they were, and the restrictions on incomes and the extraordinary taxes were considered unfair.

The European debt crisis: The Greek case, by Costas Simitis

As the new Greek Prime Minister Alexis Tsipras prepares to enter into negotiations with the EU about Greek debts, you can learn more about how the economic crisis came about.

The Death Of The American Dream In 22 Numbers

We are the generation that gets to witness the end of the American Dream. The numbers that you are about to see tell a story. They tell a story of a once mighty economy that is dying. For decades, the rest of the planet has regarded the United States as “the land of opportunity” where almost anyone can be successful if they are willing to work hard. And when I was growing up, it seemed like almost everyone was living the American Dream. I lived on a “middle class” street and I went to a school where it seemed like almost everyone was middle class. When I was in high school, it was very rare to ever hear of a parent that was unemployed, and virtually every family that I knew had a comfortable home and more than one nice vehicle.

But now that has all changed. The “American Dream” has been transformed into a very twisted game of musical chairs. With each passing year, more people are falling out of the middle class, and most of the rest of us are scrambling really hard to keep our own places.

Something has gone horribly wrong, and yet Americans are very deeply divided when it comes to finding answers to our problems. We love to point fingers and argue with one another, and meanwhile things just continue to get even worse. The following are 22 numbers that are very strong evidence of the death of the American Dream…

#1 The Obama administration tells us that 8.69 million Americans are “officially unemployed” and that 92.90 million Americans are considered to be “not in the labor force”. That means that more than 101 million U.S. adults do not have a job right now.

#2 One recent survey discovered that 55 percent of Americans believe that the American Dream either never existed or that it no longer exists.

#3 Considering the fact that Obama is in the White House, it is somewhat surprising that 55 percent of all Republicans still believe in the American Dream, but only 33 percent of all Democrats do.

#4 After adjusting for inflation, median household income has fallen by nearly $5,000 since 2007.

#5 After adjusting for inflation, “the median wealth figure for middle-income families” fell from $78,000 in 1983 to $63,800 in 2013.

#6 At this point, 59 percent of Americans believe that “the American dream has become impossible for most people to achieve”.

#7 In 1967, 53 percent of Americans were considered to be “middle income”. But today, only 43 percent of Americans are.

#8 For each of the past six years, more businesses have closed in the United States than have opened. Prior to 2008, this had never happened before in all of U.S. history.

#9 According to the New York Times, the “typical American household” is now worth 36 percent less than it was worth a decade ago.

#10 According to one recent report, 43 million Americans currently have unpaid medical debt on their credit reports.

#11 Traditionally, owning a home has been one of the key indicators that you belong to the middle class. Unfortunately, the rate of homeownership in the U.S. has now been falling for seven years in a row.

#12 According to a survey that was conducted last year, 52 percent of all Americans cannot even afford the house that they are living in right now.

#13 While Barack Obama has been in the White House, the number of Americans on food stamps has gone from 32 million to 46 million.

#14 The number of Americans on food stamps has now exceeded the 46 million mark for 38 months in a row.

#15 Right now, more than one out of every five children in the United States is on food stamps.

#16 According to a Washington Post article published just recently, more than 50 percent of the children in U.S. public schools now come from low income homes. This is the first time that this has happened in at least 50 years.

#17 According to the Census Bureau, 65 percent of all children in the United States are living in a home that receives some form of aid from the federal government.

#18 In 2008, 53 percent of all Americans considered themselves to be “middle class”. But by 2014, only 44 percent of all Americans still considered themselves to be “middle class”.

#19 In 2008, 25 percent of all Americans in the 18 to 29-year-old age bracket considered themselves to be “lower class”. But in 2014, an astounding 49 percent of all Americans in that age range considered themselves to be “lower class”.

#20 It is hard to believe, but an astounding 53 percent of all American workers make less than $30,000 a year.

#21 According to one recent survey, 62 percent of all Americans are currently living paycheck to paycheck.

#22 According to CNN, the typical American family can only “replace 21 days of income with readily accessible funds”.

The key to the recovery of the middle class is jobs.

The truth is that without middle class jobs, it is impossible to have a middle class.

Unfortunately, more middle class jobs are being offshored, are being replaced by technology, or are being lost to a slowing economy every single day. The competition for the jobs that remain is incredibly intense. Just consider the following example

In 2012, Eric Auld, an unemployed 26-year-old with a master’s degree in English, decided to find out what was on the other side of the black hole. He created a fake job ad as an experiment:

Administrative Assistant needed for busy Midtown office. Hours are Monday through Friday, nine to five. Job duties include: filing, copying, answering phones, sending e-mails, greeting clients, scheduling appointments. Previous experience in an office setting preferred, but will train the right candidate. This is a full-time position with health benefits. Please e-mail résumé if interested. Compensation: $12-$13 per hour.

If you have ever applied for a job like that, I offer my condolences. You have better odds at the casino. Auld received 653 responses in 24 hours. 10% of the applicants had more than 10 years of experience, and 3% of them had master’s degrees. Presumably, one of them would get the job. But what does that mean? It means that all the other experienced applicants and master’s degree holders would remain unemployed. That is about 64 experienced workers and about 19 workers with master’s degrees.

So how can we get this turned around?

How can we start to increase the number of middle class jobs in America once again?

Scientists showed they can identify you with more than 90 percent accuracy by looking at just four purchases, three if the price is included - and this is after companies “anonymized” the transaction records, saying they wiped away names and other personal details. The study out of the Massachusetts Institute of Technology, published Thursday in the journal Science, examined three months of credit card records for 1.1 million people. “We are showing that the privacy we are told that we have isn’t real,” study co-author Alex “Sandy” Pentland of MIT said in an email. His research found that adding just a glimmer of information about a person from an outside source was enough to identify him or her in the trove of financial transactions they studied.

Fresno Firefighters Rescue Children From Blaze - WallStreetJournal

My Intro to Finance class starts tomorrow on Coursera and I’m excited but also nervous. I have to figure out how to juggle this class, housework, my blog, studying for the COMPASS test and baseball starting soon. I know I can do it but its daunting. 

Inspired by their students, professors at the University of British Columbia are set to begin voting next week on whether to ask the institution to divest its $1.2-billion endowment of any oil and gas stocks.
Last month, Concordia became the first Canadian university to commit to divesting when it took $5-million out of its $130-million endowment to see whether it could get comparable returns from socially responsible and environmentally sustainable investments. But campaign organizers at UBC say their institution could play a pivotal role in the Canadian movement by divesting of roughly $100-million at a time when slumping oil prices mean the move makes financial sense.

“We need to act now,” said Dr. Hoberg. “This issue is particularly powerful [for professors] because we teach young people and we ought to be acting in their interests.”

UBC’s $1.3-billion endowment is the country’s second biggest after the University of Toronto’s $1.5-billion portfolio, but its fossil-fuel investments more than double those of any other Canadian university, according to a report released last month by the Sustainable and Education Policy Network (SEPN). That report identified 27 active Canadian postsecondary divestment campaigns across six provinces, with 10 in Ontario and eight in British Columbia.
Most are led by student clubs allied with 350.org, a global environmental group that claimed last year to have persuaded 800 individual investors, cities, religious groups, universities and even the heirs to the Rockefeller oil fortune to divest a total of about $50-billion from fossil fuel investments over the next five years. For now, 350.org and its allies know theirs is largely a symbolic movement, as total stock in the world’s oil, gas and coal companies was still valued at nearly $5-trillion, according to a report in August by Bloomberg New Energy Finance.

Check out the rest of the article over at The Globe & Mail.

(Infographic: Carbon Tracker)


Of “Controls, Control & Management” – Could Peter Drucker be influenced by Financial Analytics?

I recently came across another thoughtful “LinkedIn Pulse” feed titled “The management narrative that makes room for Finance” by JackSweeney, author, blogger and pod-caster at “CFO Thought Leader”.

In his post Jack argues that when it comes to managing a business corporation, despite Peter Drucker’s (renowned 20th century management guru) changing his early thinking from “command and control structure” to an “information based organization”, he (Drucker) had largely ignored the ability of Finance Organizations to influence and support that change.

Back in business school, I distinctly remember reading a chapter written by Drucker on “Controls, Control and Management”, in which he said "Controls" is means and "Control" is the end. In my early 20s, and with little experience, I had “no clue” what that really meant. Now that I am older (not very much wiser), am starting to interpret, understand and reason Drucker’s thinking.

By “Controls and Control” Peter Drucker probably envisioned centralized management in a relatively stable environment where organizations could be managed through “command and control” structures. With that line of thinking, I can understand where Jack is coming from, when he says Peter Drucker probably never appreciated the strength of Finance in supporting a “collaborative and change” oriented management structure. If you want to know more on a “command and control” versus a “collaborate and change” management structure, I high recommend watching this short 2 minute video by CFO Thought Leader. 

However, if I take a more liberal interpretation of “Controls” as “measurement of information” about the performance of an organization and “Control” as the “eventual end state” the businesses needs to get to, I see an “information based organization” view in the definition – something that more closely aligns to Peter Drucker’s changed thinking. It is about how to understand what has happened or is happening to a business and what should be done to move the organization to where its leadership wants to take it.

I completely agree with Jack on the need for “collaborative change management” and “finance being best positioned to effect that change”, and would even stretch it to say that eventually CFOs need to collaborate based on “information (and analytics around such information)” to help their business partners with decision that facilitates change. This fits a more contemporary interpretation and something that Peter Drucker would probably agree.

Unfortunately, compared to what we have today, the information foundation and associated processes / technology in the 50s (when Drucker wrote about this topic) were relatively immature. I understand why Drucker started where he started, but am sure he will change his thinking if he looked at the intrepid Finance Leaders of today and their ability to influence change by collaborating with their business partner using information /analytics (also called Financial Analytics - a topic I talk about on my blog).

I believe “Financial Analytics” is the “Holy Grail” that will help CFOs and their Finance Organizations facilitate collaboration and change across the enterprise.

Welcome all thoughts and comments. 

Many people believe that they can beat the stock market. Chancesare, they’re wrong. Fortunately, in the long run, the Dow trends upward, so if you have a diversified portfolio, your equity will generally grow. The approach of a day trader is far more complex because price fluctuations over the course of a day are highly unpredictable. They are not, however, random. With this in mind, I figured it would be interesting to identify which dates are more likely to see gains, and which are more prone to losses.

Using approximately 100 years of data (July 30th, 1914 – January 26th, 2015), I calculated the percentage change in closing price for the Dow Jones Industrial Average (DJIA) from day to day. I then ran summary statistics binning by day of the year, and selected two metrics to plot as heat maps.

For both maps, I’ve used a diverging color scheme centered on a neutral market (light gray). Blue cells signify market gains, while orange cells correspond to losses. White boxes with “N/A” are either dates that don’t exist, or fixed-date holidays when the market is closed (i.e., New Year’s Day, Independence Day, and Christmas).

The left map shows the percentage of time a given day sees an increase in the DJIA. For example, out of the 72 instances that the market was open on April 15th (Tax Day!), the Dow increased 53 of them, so it improved 53/72=73.6% of the time. One of the worst days occurs just over a week earlier, on April 7th; out of the 73 days it was open, the DJIA rose only 26, or 35.6% of the time.

The right map reveals the median percent change in the DJIA for each date. (Because the market can change significantly on a given day, the average and sum were both strongly influenced by outliers.) This generally shows the same pattern as the left map, but with different relative magnitudes. For example, while April 15th is the day that has most frequently seen gains, the median gain is not as large as that of January 2nd, when the median change in the DJIA is +0.43%.

The four best and worst days are listed under each map. April 15th is among the top four on each, and April 7th is in the bottom four on each.

Finally, note that this graph is intended for entertainment only – it should not be used for investment strategy!

Data source: http://measuringworth.com/DJA/