Once you retire, you might have fantasies of getting into all kinds of life activities which you’ve long postponed or you might fear an anticipated loss of income, life purpose or activity. Retirement is can be a time of renewal or reinvention. The choice of lifestyle belongs to you. If you’re not certain about how … Continue reading Retirement Lifestyle: A Time for Pursuit of Passion
Category: Investing and Financial Planning
How much Money do I need to Retire?
How much money do I need to retire is the question everybody wonders about. The right answer is down to lifestyle and how much you need to service that lifestyle. If you need $100,000 per year to live then the amount of money you need to retire is far greater than if you need $50,000 … Continue reading How much Money do I need to Retire?
Optimizing Capital Structure
Consider the situation of a newly married couple. They have some savings but also have substantial credit card outstanding. They are planning to buy an apartment. How should they go about it? Should they pay off a portion of credit card outstanding first and then go for a low interest home loan? If they decide … Continue reading Optimizing Capital Structure
Bonds: Calculating Yield
When talking about bonds (especially when buying them) you have to take into consideration the yield of the bond. Simply put, a bond’s yield shows the relationship of the investment and the income. For the sake of comparability yield is always shown as an annualized (yearly) percentage. Current YieldAlthough we may know the coupon rate … Continue reading Bonds: Calculating Yield
Bonds: An Introduction
A bond is a type of debt security, where the issuer owes the holders a debt and is obligated to pay the coupon rate and face value back, together with other obligations, stated in the terms. This is the technical definition of bonds. Here we will help you familiarize yourself with the terms used in … Continue reading Bonds: An Introduction
Calculating Different Types of Annuities
Definition An annuity is a series of payments required to be made or received over time at regular intervals. The most common payment intervals are yearly (once a year), semi-annually (twice a year), quarterly (four times a year), and monthly (once a month). Some examples of annuities: Mortgages, Car payments, Rent, Pension fund payments, Insurance … Continue reading Calculating Different Types of Annuities
The Power of Compounding – Interest Examples
Time exerts the greatest influence on your investment portfolio than any other force. Through the power of compounding, a small amount of money over time can grow into a substantial sum. Compounding is an investor’s best friend. Investments can increase in value over time – and the longer the time frame, the greater the value. … Continue reading The Power of Compounding – Interest Examples
Perpetuities – Definition & Calculation
Perpetuity Definition: A perpetuity is an annuity that provides payments indefinitely. Since this type of annuity is unending, its sum or future value cannot be calculated. Examples of perpetuity: Local governments set aside monies so that funds will be available on a regular basis for cultural activities. A children’s charity club set up a fund … Continue reading Perpetuities – Definition & Calculation
Standard Deviation — Definition & Calculation
Definition: Standard deviation is a measure of how far apart the data are from the average of the data. If all the observations are close to their average then the standard deviation will be small. How to calculate standard deviation:Suppose that an investor has $600 to invest and is considering investing all of it in … Continue reading Standard Deviation — Definition & Calculation
Information Asymmetry
An economy is said to be characterized by information asymmetry when some parties to business transactions may have an information advantage over others. Types of information asymmetry The first is adverse selection. Adverse selection occurs because some persons, such as managers and other insiders know more about the current condition and future prospects of the … Continue reading Information Asymmetry
