Personal blog on early retirement, selling tradelines, and analytics projects. I write about what I learn as I am learning it.
money
After a few years of reading the famous annual letter from Buffett (tag) to his investors, and three years of following the live Yahoo! stream of the annual meeting in Omaha, last year I shared my impressions for the first time. Here is the second installment.
The greater fool theory of finance says it’s sometimes possible to make money by purchasing overvalued assets (items whose purchase price exceeds their intrinsic value) and reselling them for a higher price later.
This theory states that prices go up when people can sell overvalued securities to the “greater fool,” regardless of whether the securities are overvalued. Suppose one “fool” purchased an overpriced asset, hoping that he could sell it to an even “greater fool” who would profit from it. A system like this can only work if new “greater fools” are willing to purchase the asset at ever-higher prices. Continue reading “The Greater Fool”
Throughout this post, I discuss the relationship between two concepts from the field of Economics(?): the Easterlin paradox and early retirement.
Early retirement is a controversial issue in economics and personal finance. I have written about it in an earlier post. Many Americans consider early retirement more than just a chance to have the most relaxing time of their lives. They can either succeed or drown at a crucial point in their lives from this point.
Easterlin paradox, on the other hand (or coincidently?), explores the relationship between income and happiness, or lack thereof.
There are many ways to use a credit card, probably as many ways as there are people using credit cards. And, just as there are no two people created equal, there are no two equal ways to use a card. We can’t really talk about each of those in detail so I just created this super-clever 7-level classification in the progressive mastery of credit card usage.
I ordered the seven levels by their increasing level of mastery, but not in the order people would go through them. Obviously, everyone will start at the “average” level (the third level in my arbitrary system). In a way, everyone has a shot at using credit cards in a clever way. From there, one would either go down to one of the first two levels (the “bad” ones) or up to one of the top four levels (the “good” ones).
So here are the seven levels:
Continue reading “The seven mastery levels of credit card usage”They say there are two kinds of people: those who pay interest and those who earn interest…. and there are those who know to open a credit card and those who don’t.
The above was just a general reminder not to forget as one thinks about opening a new line of credit. Below I will lay out the steps I follow when I open a new credit card.
