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Ben Bernanke Can’t Refinance His House

October 3rd, 2014 Living Off Dividends Posted in Uncategorized | No Comments »

You know it’s a weird situation when the person responsible for “saving” the US financial industry can’t refinance his own house!

From Bloomberg:

Ben S. Bernanke said the mortgage market is so tight that even he is having a hard time refinancing his own home loan.

The former Federal Reserve chairman, speaking at a conference in Chicago yesterday, told moderator Mark Zandi of Moody’s Analytics Inc. — “just between the two of us” — that “I recently tried to refinance my mortgage and I was unsuccessful in doing so.”

When the audience laughed, Bernanke said, “I’m not making that up.”

“I think it’s entirely possible” that lenders “may have gone a little bit too far on mortgage credit conditions,” he said.

Bernanke, addressing a conference of the National Investment Center for Seniors Housing and Care in Chicago yesterday, said that the first-time home buyer market is “not what it should be” as the economy in general strengthens.

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Rent Vs Buy? The Age-Old Question

May 23rd, 2014 Living Off Dividends Posted in Real Estate | 1 Comment »

Recently, my wife and I decided it’s time to buy a house. Our household income is set to more than double in a few months and we will be in a 33% marginal tax bracket. Time to start taking advantage of the tax benefits the government gives homehome sweet homeowners.

For the past year or so, we’ve been living in Los Angeles’s Westside neighborhood, about 2.5 miles inland from the Pacific Ocean.

Rent’s in LA have skyrocketed in the past year…along with real estate prices.

We currently pay $2,400 to live in a nice 2 bedroom, 2 bath, 1550 sq ft condo. I personally feel the neighborhood is run down, but apparently I’m alone in regards – it considered a very desirable part of town, owing to its close proximity to ocean, jobs, downtown, bars, and restaurants.

But this condo we live in would probably sell for $700,000.

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Vodafone Investment Finally Paying Off

September 2nd, 2013 Living Off Dividends Posted in Foreign Stocks, Investing, Stocks | 3 Comments »

In April 2010, I made an argument to invest in Vodafone (VOD).

That assumption was based on the fact that VOD owns 45% of Verizon Wireless (VZ) — that value wasn’t reflected in the share price, and eventually Verizon would have to buy back that stake.

After nearly 3.5 years, it seems like the bet will finally pay off. Verizon agreed to acquire Vodafone’s 45% stake for $130 billion.

While it’s taken 41 months for my thesis to play out, I’ve been richly rewarded in terms of share price and dividends. Considering Friday’s closing price of $32.35, that represents a total return of 83%, which is approximately 19.3% per year.

Once the deal actually goes through, there should be a special dividend worth several dollars, as well as some Verizon stock to existing Vodafone shareholders. The price of Vodafone’s stock will likely drop to reflect the loss of future revenues, part of which should be offset by the Verizon stock.

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Inequality In The USA

March 16th, 2013 Living Off Dividends Posted in Economy | 3 Comments »

Here’s a really good video about the rise of inequality in America.

As depressing as it looks, we’re still much better off in the US compared to the rest of the world. Take a look at the site. According to nifty calculator, someone who makes a measly $20,000 a year is in the top 11% of the world richest people.

If you found this post helpful, consider donating to my coffee fund!

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Pay Congress like Businessmen

December 28th, 2012 Living Off Dividends Posted in politics | No Comments »

Today’s guest post was written by Greg Herlean, a financial expert and founder and partner in USelfDirect, a free resource website for savings and retirement planning and self-directed IRAs.

I am a small business owner and the whole fiscal cliff mess affects me and my children greatly. If you haven’t heard, the fiscal cliff is the description of when the terms of the Budget Control Act of 2011 kick in—at midnight on Dec. 31 of this year. Among the changes are both newer and higher taxes along with spending cuts. It’s widely expected among economists that this will all result in our economy falling into a new recession and unemployment shooting higher.

If the Bush tax cuts expire as scheduled, the lowest tax bracket—10 percent—will disappear, and only the IRS can tell employers what the new income ranges will be for the 15 percent and other brackets higher up the scale.

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Taking Investment Advice from the Federal Reserve

September 21st, 2012 Living Off Dividends Posted in Economy, Investing | 2 Comments »

Unless you’ve just woken up from a week-long coma, you already know that Ben Bernanke, Chairman of the Federal Reserve, announced the Fed is going to maintain its Zero-Interest Rate Policy for the next 2-3 years. It is also going to buy $500 billion worth of mortgages every year until the economy improves.

One opponent of this measure was president and CEO of the Dallas Federal Reserve, Richard Fisher. Fisher maintains that buying bonds probably won’t help stimulate the economy. Instead, it will however increase inflation, and expectations of inflation.

As one of the richest members of the Fed, we should probably listen to him. Worth an estimated $21 million, Fisher has worked as a Banker and a Hedge Fund Manager. And he’s been voicing inflation concerns since 2005.

While opposing the Fed’s stance on bond purchases, his personal portfolio is well positioned to benefit from any inflation that might occur due to it.

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