Ignore The Headline, Spend 3 Minutes A Year On Your Investments, and other bits…

Source: Antonio Castagna via Flickr

Source: Antonio Castagna via Flickr

Don’t Let The Headlines Sway You (Globe and Mail): As many of you know, Greece has shut down its banking system. The banks in Greece will be closed for at least 6 days (through Saturday) to prevent capital from fleeing the country. As you might imagine, the stock market reacted negatively to this news. The S&P 500 lost 2.1% on Monday. Most people should not let this news impact the way they are investing. Most people should just leave their money in their index funds.

There a quote in this article that’s appropriate from famed investor Peter Lynch:

It’s lovely to know when there’s recession, [But] I don’t remember anybody predicting [that in] 1982 we’re going to have 14% inflation, 12% unemployment, a 20% prime rate, you know, the worst recession since the Depression. … So I don’t worry about any of that stuff. I’ve always said if you spend 13 minutes a year on economics, you’ve wasted 10 minutes. … I deal in facts, not forecasting the future. That’s crystal-ball stuff. That doesn’t work.

Most people are better off just investing their money in index funds, and if you choose to, annually rebalance.

7 Ways To Prep Your Money Before A Trip (Fortune): I was at the airport today. It was incredibly crowded. It’s summer, it’s vacation season. The economy has improved. More people have disposable income and they are traveling. This article from Fortune listed seven helpful tips for travelers. Here’s the first one:

  1. Contact Your Credit Card Company – if you are traveling outside the country, you should definitely let your credit card providers know. If credit cards see unusual activity, they may freeze your card; even if those are legitimate charges. Imagine traveling abroad and having your credit card frozen and unavailable to you.  Sounds like a nightmare to me. I always let my credit cards know when I travel; you should too.

There are six more helpful tips in this Fortune article. Check  ’em out.

How Much Money Do You Need to Retire Early? (Motley Fool): How much money do you need to have a perpetual income? Historically, the “safe” forever withdrawal rate has been 4%. So , if so have saved $1 million, a 4% annual withdrawal from your investments would be $40,000. For many people that’s not enough to live on each year. If that’s you, you would have to save more, or work longer. Unfortunately, many people now believe that a 4% annual withdrawal rate may be too high. In today’s low interest environment , many people think the annual withdrawal rate should be closer to 3%. To get to that $40,000 level, you’d need to have about $1.33 million. Essentially, most people have not saved this much money and need to strive to save more or plan to work longer, perhaps forever.

 

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