As the author of disclaimer-statement.info, I get a lot of questions on a lot of topics. Here’s a selection of five recent ones on various topics that might have occurred to you – along with my answer. If you’d like to ask a question and want to make sure I read it, please me.
In alot of your articles I keep seeing “based on a returned 10% each year” or something similar, I was wondering what investment fund thing gives aleast 10% a year?
I use 10% quite often for thumbnail calculations for long term investments because it (a) makes calculations fairly easy and (b) approximates the return after long-term capital gains tax for the Vanguard 500, which has returned 12.15% annually since its inception in 1976. If you’re investing for a long term goal, you should be in a long term investment like that.
Could you give me a definition of a late model car?
A late model car, as I discuss it here, is generally one that is less than five years from being new. Usually, I use this term to refer to cars three to five years old that have recently come off of a lease.
My wife worked for a large corporation for 7 years before resigning to be a full-time stay-at-home mom. Because of her service time, she earned a defined benefit pension, a little over $550/month beginning at age 65. It is designated as a “single life annuity”. I am trying to determine how to account for this in my net worth calculations.
If an asset does not have an immediate cash value, I would not include it in my net worth. You have no real way of liquidating your pension right now, so don’t count it.
Also on the net worth topic…
How will you figure in the asset increase / decrease for a house? Will you do that monthly, yearly or at the opportunities that you get your house appraised?
My personal plan is to not include my primary residence as an asset at all in my net worth calculation, because I don’t view it as something I can really liquidate on a whim. However, if I were including a property in my net worth, I would just include the most recent appraisal as the value of the house. I wouldn’t bother to recalculate it regularly, because it’s never an exact estimate.
For a 21 year old soon to be college grad who has some money to invest, what are your top book recommendations?
When you graduate, you’re going to want to spend your time jump-starting your career, not chasing individual stocks. I would read something like The Bogleheads’ Guide to Investing. I’d also recommend a book on figuring out your own personal finance philosophy, like Your Money or Your Life.