The Personal Finance Geek

When it comes to housing, there are two main options: renting or owning. Each option has its own pros and cons, and the best choice for you will depend on your individual circumstances. If you're not sure which option is right for you, here's a quick rundown of the pros and cons of renting versus owning: Renting Pros: Renting is typically more affordable than owning, especially in high-cost areas. You don't have to worry about maintenance or repairs. You can move more easily if your needs change. Cons: You don't build equity in the property. You have less control over your living space. You may have to deal with noisy or inconsiderate neighbors. Owning Pros: You build equity in the property over time. You have more control over your living space. You can make changes to the property as you see fit. Cons: Owning can be more expensive than renting, especially when you factor in things like mortgage payments, property taxes, and homeowners insurance. You're respo...

When I was thinking of things to write about, I remembered the episode of The Office where Michael is invited to Ryan's business school class for the day. While Michael is in the classroom, one of the other business students asks him how far his Herfindahl index has dropped as a result of a recent merger. (Over the course of this explainer, it will become apparent that that student was incorrect-- mergers will increase this index, not decrease it.) This is completely real, and it's actually something that can significantly impact which stocks are available on the market and how much those stocks are worth. One of the ways that businesses grow, and therefore the value of their stocks go up over time, is by buying other companies. In general, there are two directions in which it makes sense to buy a company. If you buy a company vertically relative to yours, then the company you bought is somewhere else on the same supply chain that your company is on. Either you bought t...

Retirement planning can be a daunting task, especially if you're not sure where to start. There are a lot of different retirement plans out there, and it can be hard to know which one is right for you. In this blog post, we'll explain the difference between four of the most common retirement plans: 401(k), Roth IRA, traditional IRA, and pension plans. A 401(k) is a retirement savings plan offered by many employers. With a 401(k), you can contribute a portion of your salary before taxes are taken out. This means that your money grows tax-deferred, which can save you a lot of money on taxes in the long run. There are also often employer matching contributions, which means that your employer will contribute money to your 401(k) account, too. The current limit for the amount that an employee can contribute to their 401(k), in 2023, is $22500, which works out to a maximum of $1,875 a month. Contributing to one of these lowers your taxable income when you make the contribution...

  John and Jane are a married couple in their late 30s who graduated at the top of their classes, John from med school, and Jane from law school. They now earn a combined total of $1,400,000 working as a neurosurgeon and corporate counsel. They have a $2,500,000 mortgage; $300,000 left to pay from law school, and $250,000 to pay off from med school. They can allocate up to $23,333.33 every month to pay off their debts, and they want to make some progress on all their debts each month, to avoid a situation where they owe much more than anticipated and are trapped in debt much longer because interest piled up.                There are three commonly suggested methods for attacking debts like this. First, paying off exactly what the amortization schedule would require of them. These are the terms of  their 3 outstanding debts:   Amount borrowed Minimum payment ...

 Depending on where you get your investment news and suggestions from, you’ve probably heard one of two sentiments, a lot. Either you’ve heard “buy [this stock you’ve never heard of] right now!!! It’s so cheap and it’ll make you a fortune when it inevitably rises 47x in value over the next month! Put your life savings here!!!” Or you’ve heard “The people who just told you to invest in [the stock you hadn’t heard of until 30 seconds ago] are going to ruin you if you don’t pay attention!!! Run away while you can!!” In the case of penny stocks, I’m in the second camp, but the argument I’m going to make isn’t emotional at all. I’m simply going to log into my brokerage portal, find the “biggest winners and losers” widget (which almost always is filled with these dangerous penny stocks), and show you what would have happened, had you invested in these.   Get ready, because this isn’t going to be pretty. These stocks were on my (real) widget as of the end of the (real) tra...