Simple Minded Investor

You aren't smarter than the market. It really is that simple. One of the interesting aspects of the recent collapse in stock values is that it makes it a good time to consider rolling your traditional IRA over into a Roth IRA and paying the taxes on the lower valued stock before they go back up. Of course, that assumes they will go back up before you retire. For people who don't pay attention to this sort of thing, the basic difference between a Roth IRA and a traditional IRA is how you pay taxes on them. With the traditional IRA you put your money in an account for retirement and you don't have to pay any taxes on it. Or, looked at another way, you can deduct the contribution from your income taxes. You also don't have to pay taxes on any of the earnings from the investment while they accrue. But when you go to take money out of that account, you have to pay income taxes on the money you withdraw just as you would any other income you had earned. So, while you save mon...

You aren't smarter than the market. It really is that simple. This article in the New York Times, You Try to Live on 500K in This Town , makes it easy to make fun of the perils of having to live on only the $500,000 Obama is suggesting be the limit for executives of failing banks who take federal dollars. But there is really something far more disturbing in the discussion as it takes place throughout the newspaper. It becomes apparent that there is the sense that even if you have lost trillion's of dollars of other people's money, you are still entitled to live an extravagant lifestyle. Having left thousands of people losing their homes, jobs and feeding themselves at food banks, these people genuinely don't see why they would ever have to suffer the same fate. In 1929, wall street losers jumped out of windows. They understood that there was nothing to insulate them from their fate. Today's financiers have no such belief. And with good reason. One of the reason the...