Len Cabrera's Blog

People frequently fall for investment tricks, thinking that the only way to earn big returns is to do the latest trendy thing. Unless you have access to a sitting politician’s financial advisor to benefit from insider trading, you’re not likely to do much better than the average market return. Chasing trends is almost guaranteed to do worse. (And insider trading gets you in jail unless you’re politically connected.)

Basic Personal Finance Chapter 9 talks about real estate as an investment. Sp...

The start of a new year is a good time to review your retirement account(s) to check your investment position, especially if you just created a new account last year. It’s common for investment companies that manage corporate retirement plans to default contributions into government bond funds or money market funds. 

Recently a young adult asked me to look at his Roth IRA account from a local credit union. He was wondering why there were four identical payments during the year, since his mone...

Envy is defined as “a feeling of discontented or resentful longing aroused by someone else’s possessions, qualities, or luck.” It’s one of the Seven Deadly Sins according to the Catechism of the Catholic Church, and, in The Conquest of Happiness, atheist philosopher Bertrand Russell wrote that envy was one of the strongest causes of unhappiness. Sadly, marketing is all about stirring up envy to convince you that you need something you didn’t even know existed.

Commercials and advertisements a...

One of the basic principles of economics is that there is no such thing as a free lunch. Nothing is truly free, because even if something has no monetary cost, the time it takes to acquire or consume the thing is time you can’t spending doing something else.

People seduced by modern monetary theory (MMT) over the last decade and a half should be realizing that their promised free lunch is not truly free. MMT basically says that governments can print all the money they want without having any ...

You hear a lot of people moaning that the rich get rich on the backs of the poor. A more plausible source of riches comes from people who don’t pay attention. This is a frequent warning I give to students, especially when talking about banking and ATM machines. (A couple years ago, I learned that companies like McDonalds pay employees with prepaid debit cards if they don’t have bank accounts for direct deposit, and I was shocked to learn that kids were paying $4 fees to cash $20 paychecks.)

T...

Earlier this week, there were several stories about McDonald’s adding self-order kiosks. CNBC’s Sarah Whitten did a rare “just the facts” story that says McDonald’s is adding the kiosks to 1000 stores each quarter for the next two years. Sadly, most other stories read like editorials in favor of or against the new technology and blaming or exonerating minimum wage laws. For example, Christian Britschgi at Reason.com insists the kiosks are not a reaction to the minimum wage,  ignoring former M...

Once upon a time, I promised a blog post on when you should take Social Security. Procrastination pays off because The Motley Fool just ran a post that did it for me. The short version: take your benefit as soon as you can (i.e., age 62). The trade-off is to wait and increase your monthly benefit at the expense of lower overall payout from Social Security.

Your “full” retirement age is between 65 and 67, depending on your year of birth. For younger generations, that age will probably increase...

A recent column by Gail MarksJarvis in the Chicago Tribune warned that “Investors Should Be Wary of Bitcoin.” She warns that while Bitcoin has seen 358% gain this year, it’s probably approaching the peak of its asset bubble, and newer investors will get caught holding the hot potato when the bubble pops. They’ll be just like the losers from the 2008 housing crash, the 2000 tech bubble crash, and the Nikkei crash in the 1980s.

I’d like to add a separate warning that also applies to many other...

You’ve heard the saying, you can’t love others until you first love yourself. The same can be said of your personal finance: You can’t have financial discipline if you don’t have personal discipline.

A new study by CareerBuilder shows that 78% of Americans live paycheck to paycheck. Their survey of 3,462 full-time workers and 2,369 full-time employers showed people struggle to make ends meet even at higher wages. People earning over $100,000 (9%) were living paycheck to paycheck; 28% of those...

Georgetown University’s Center on Education and the Workforce has a bunch of reports “to better articulate links between education, career preparation, and workplace demands.” That means they attempt to determine the value of various college degrees and majors based on employment opportunities and wages.

My last post talked about AA degrees that earn more than BA degrees (based on a Chicago Tribune column that referenced a Georgetown study). The Cashlorette.com also used Georgetown data to ra...