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Our latest insights.

March 25, 2017

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‘Til death do us part. 🏠💀🙃 ‘Til death do us part. 🏠💀🙃
It's a very hot topic right now, so let's talk abo It's a very hot topic right now, so let's talk about it: #Inflation. Generally speaking, many different factors can contribute to inflation, including: ➡️ A booming economy—Economic growth usually goes hand in hand with at least some inflation. If a company’s profits are good, it may give more raises to employees. If people are feeling secure in their jobs, they’re probably spending more money. The more they spend, the more prices tend to go up. ➡️ Energy prices—The economy depends on oil and other energy sources in a variety of ways. When the cost of energy goes up, the cost of making goods, shipping goods, and keeping the lights on at stores goes up too. That means prices of goods and services tend to rise as well. ➡️ Government policy—If the government cuts taxes, lowers interest rates, or prints money, both economic growth and inflation typically get a boost. In theory, there are good & bad things about Inflation. The good: ✅ Encourages consumer spending (which is good for the economy), Wages go up, Some investments (like your house) usually go up in price along with inflation. The bad: 🚫 Your money buys less than it did before, Interest rates go up, making borrowing more expensive, and some investments (like CDs and cash) lose value. You could say Inflation sucks because it means everyone is rich but nobody can afford anything. What do you think? 🤔
IRAs and 401(k)s are two popular types of retireme IRAs and 401(k)s are two popular types of retirement savings accounts. Most people who work in the private sector have at least one of these accounts (government employees often have different options), and many people own several retirement accounts. Although they both serve the same purpose, the accounts have some important distinctions. Swipe through to see them, be sure to *SAVE* this post for reference, and visit napkinfinance.com to learn more. Did you know that the average balance in a 401(k) is just over $100,000, but it is possible to become a “401(k) millionaire”—i.e., someone with a balance in the seven digits? Are you one of them? 😉
Return on investment, or ROI, is a ratio for measu Return on investment, or ROI, is a ratio for measuring the profitability of an investment. It puts a percentage figure on the benefit or return you earned compared with the amount you invested. Although ROI is mainly used for calculating returns on financial investments, you can also use it to measure the return on an investment you made with your time or other resources. The formula for calculating ROI is: Ending value of investment – Amount you invested divided by Amount you invested For example, let’s say you invest $1,000 in a stock and then sell your shares for $1,500 two years later. Your ROI is: $1,500 – $1,000 divided by $1,000 = 50% ROI is typically expressed as a percentage, so in this case, your ROI would be 50%. If you made money, your ROI will be positive. A negative ROI means you lost money. While ROI can be useful, it has some important limitations: ➡️ It doesn’t consider how long it took you to earn your return. An investment that returns 50% in one year is more profitable than an investment that returns 50% over ten years. But based on ROI alone, they’ll look identical. ➡️ It doesn’t consider risk. You may earn 200% in a cryptocurrency investment and only 5% on a bond investment. Judged on ROI alone, the crypto wins hands down, but the bond investment was much safer. ➡️ It doesn’t consider nonfinancial benefits. Getting that advanced degree might not boost your earnings by as much as you’d like, but you still might feel it’s worth it for personal reasons. ➡️ It can’t give you deeper insights into how you earned your return. A company could make separate investments in online advertising, email campaigns, and social media. A solid ROI could tell it that overall those investments paid off, but it wouldn’t tell the company which of those efforts was most successful. Click the link in our bio to learn more.
Just trusting the universe on this one. 🙃 Just trusting the universe on this one. 🙃
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