If you want to buy a car here in the U.S. that is made in Korea, you can. Korea makes Hyundai and Kia, brands that have gone from relative obscurity a few years back to capturing roughly 10 percent of the American car market. If you want to buy a toaster from Korea, you can, and a vacuum cleaner and an external hard drive and a smartphone. They are all available here in the U.S. Maybe I should clarify that a bit. You can buy any of these products here that were made in South Korea, not North Korea. The two countries are geographically adjacent to each other and have similar heritage and climate. One of them exports boatloads of products to the U.S. and the other sends us nothing. That’s due in part to a trade sanctions but it’s likely due primarily to the differing forms of government. Continue Reading…
I Hate to Throw A Wet Blanket on the Party, But….
When I was an undergraduate student, my finance professor related the story of a man who bought a stock for $10 per share. It climbed sharply to $20, then $40, then $60 and finally to $100. He was extremely proud of his investment. But then it began to drop, first to $90, then $70 and on and on. Finally it hit $10, his original purchase price, and he sold it. He remarked to his wife, “Well, at least I didn’t lose any money!” Continue Reading…
Do Stock Splits Increase Your Wealth?
Back in 1970, Sam Walton needed capital to expand his small chain of 38 stores. He was willing to give up some ownership in the company to do so. So he hired investment banking firm Stephens of Little Rock to sell shares to the public. On October 1, 1970, Wal-Mart sold 300,000 shares of common stock to the public at a price of $16.50, raising total capital of $4.95 million. I doubt if $5 million would stock the electronics section of a Wal-Mart today. Continue Reading…
This Investing Strategy is For the Dogs
Low interest rates are a great deal if you are buying a house. But for folks living off the income of their investments, low interest rates can mean severe cuts in their cash flow. The national average for a one year CD is about six tenths of one percent. So a $100,000 CD is paying $600 per year. Just a few years back a retiree might have collected $4,000 or more on the same investment. Naturally, that leads many investors to search for a higher yield elsewhere. Surprisingly, one place that some are looking is the stock market. Specifically, investors may be looking at stocks that have a high dividend yield, or a high dividend relative to the price of the stock. Continue Reading…
Double Check Those Beneficiaries
As the New Year gets into swing, you no doubt made a few New Year’s resolutions. So did I. Besides losing weight, getting in shape, and the other usual suspects, you might have decided to get better organized. I’ve made that one too even though my office doesn’t indicate it when visitors walk in. One thing you might not think about checking on is your beneficiary designations. This will apply primarily to retirement accounts and life insurance contracts. Circumstances change throughout life with children born, couples divorcing, and other issues so it doesn’t hurt to make sure your beneficiaries are listed as you want them. Continue Reading…
Your 401(k) Is Not Free!
If you have a retirement plan at work, chances are it’s a 401(k). If you work for a non-profit or governmental agency, you may be covered under a 403(b) or a 457 plan, which are similar in nature to a 401(k). You might be under the impression these plans don’t cost you anything, that the investments are “free”, so to speak. But, in fact, it costs money to operate these plans. And you will soon find out how much. Continue Reading…
I Hope You Catch Enough Fish
Some years back I received an e-mail that I stuck in a file to refer to from time to time. It remains one of my favorite stories. I don’t know who wrote it or I would give credit where credit is due. The story goes that a rich American investment banker is vacationing in Mexico. He happens to be at the pier late one afternoon when a small wooden boat comes rowing in with only a single fisherman. The banker looks in the boat and sees several large yellow fin tuna. He asked the fisherman how long it took to catch the fish. “Only a little while,” replied the fisherman. Continue Reading…
Whirlpool Arkansas Headed Down the Drain
A few weeks back Whirlpool announced they were closing their plant in Fort Smith, resulting in about 1,200 jobs being lost. I lived in Fort Smith twenty years ago and remember a massive factory and warehouse that sit on probably eighty acres of land in the south part of town. At its peak, the factory employed more than 5,000 and produced about 5,000 refrigerators each day. Besides the 5,000 working directly at Whirlpool, there were several thousand others working in the area making steel and plastic parts, corrugated shipping materials and other supplies to support the plant. Most of that is gone as well, as production of the refrigerators has moved to Mexico. Continue Reading…
Physician, Heal Thyself: The Aches and Pains of Retirement Planning
In the classic book, The Millionaire Next Door, authors Tom Stanley and Bill Danko paint a picture of wealth that is drastically different from what you and I often expect. We look at folks in big houses and driving fancy cars and may assume that they are wealthy; they “have it made” so to speak. In fact, Stanley and Danko show that often it is the people who live more modestly that accumulate wealth. They live in smaller simpler homes and drive Fords and Chevys, and drive them for a long time, rather than buying new Mercedes or Jaguars and trading often. What looks like wealth on the outside is often just a lot of credit with little equity. Continue Reading…
The Diaper is Not That Wet!
It’s interesting to me the spending habits of the older generation versus younger folks. Those whole lived through the Great Depression never forgot it. I have older generation relatives and friends, who shall remain nameless since they will probably read this, who still turn the hot water heater off after they have had their daily bath. Others who use the leftover salt and pepper packs to replenish their shakers at home. Ditto that on those extra ketchup packets left over. I’ve joked with them about that though I do admire their frugality. This generation I’m referring to was alive during the Great Depression, even though they may have been young. They still remember it vividly and it has affected their attitudes about spending permanently. Continue Reading…