HONG KONG, February 20 (Reuters) – News and developments in Asia private equity from Reuters News for Lunar New Year and the week ending Feb. 17.
FEBRUARY 17
CARLYLE GROUP has begun the process of selling its over $300 million stake in Taiwan’s Ta Chong Bank Ltd, sources said, as it joins other private equity firms in looking to exit the island’s low-margin financial sector.
MMI INTERNATIONAL, a technology company owned by private equity fund KKR & Co LP, will price its $300 million five-year bond at 8 percent in New York, the bottom end of price guidance, after receiving strong support from U.S. investors, according to a source familiar with the matter.
AUSTRALIAN SURFWEAR company Billabong International rebuffed a $820 million private equity bid from TPG Capital , announcing plans to sell a stake in its Nixon watch brand and close up to 150 stores, sending its shares up by more than 50 percent.
CHINA HAS launched a 50 billion yuan ($7.93 billion) fund in Shanghai to aid overseas acquisitions by Chinese companies as part of efforts to promote international use of the yuan and build the commercial hub into a global financial center.
HANA FINANCIAL Group said that it had reached a deal with the labour union of Korea Exchange Bank (KEB) which had threatened to strike over possible job losses following Hana’s acquisition of KEB.
FEBRUARY 16
WINS INVESTMENT, the fund arm of Chinese property developer Gemdale, says it plans to double funds under management to take advantage of a government clampdown on property financing that could see smaller developers starved of funds.
L CAPITAL Asia, the private equity arm of the world’s biggest luxury goods group LVMH Moët Hennessy Louis Vuitton SA , could begin raising a new fund of more than $1 billion this year, as competition from Western brands creates opportunities to invest in Chinese retailers, its top executive said.
CANADA PENSION Plan Investment Board, which manages the country’s second largest pension fund, has hired former Goldman Sachs banker Mark Machin to head its Asia-Pacific business, according to a source close to the matter.
FEBRUARY 15
L CAPITAL has bought the 8 percent stake held by Wolfensohn Capital Partners in unlisted Indian ethnic wear chain Fabindia, two sources with direct knowledge of the matter said.
SOUTH KOREA’S National Pension Service (NPS), the world’s No.4 largest pension fund, plans to invest around $300 million in a real estate opportunity fund led by Blackstone Group , an NPS official said, amid the fund’s efforts to step up its investments in real estate assets.
U.S PRIVATE equity fund Norwest Venture Partners has invested $15 million in Manthan Systems, an unlisted Indian software products company, for a minority stake, the Indian company said on Wednesday.
WANT WANT China Holdings, the buyer of private equity fund MBK Partners’ Taiwan cable TV unit, will have to give more information to the island’s broadcast regulator concerning its media operations, the latest delay in the $2.4 billion deal.
JAPANESE PRIVATE equity secondary fund Ant Capital Partners said it closed its third Japanese secondaries fund at the end of December 2011 raising $140 million, attracting commitments from 15 Japanese institutional investors.
SOUTH KOREA’S SK Group is in talks to take over U.S. oil and gas company Chaparral Energy, a company 36 percent owned by CCMP, according to a source familiar with the matter.
FEBRUARY 14
TALKS BETWEEN Yahoo Inc and China’s Alibaba Group over the U.S. Internet giant’s Asian assets have hit an impasse, throwing their plans for a $17 billion tax-free asset swap into question, according to sources briefed on the situation.
CARLYLE SAID it would sell Talaris, a provider of cash-counting equipment, to Japan’s Glory Ltd for 650 million pounds ($1 billion), twice the value of its original investment.
INDONESIA WILL not implement a planned regulation to limit ownership in domestic banks, since it does not want to scare away potential foreign investors from the sale of state-owned Bank Mutiara, the state deposit agency (LPS) said.
FIDELITY GROWTH Partners, the private equity arm of Fidelity Worldwide Investment, along with existing investors have invested 2 billion rupees ($40.6 million) in Aptuit Laurus Pvt Ltd, an unlisted Indian pharma company.
EXCLUSIVE-AN Abu Dhabi sovereign wealth fund is exploring the sale of its $1.3 billion stake in Malaysian lender RHB Capital Bhd six months after buying the shares, sources familiar with the matter told Reuters, and has engaged in early talks with Japan’s Sumitomo Mitsui Banking Corp (SMBC).
FEBRUARY 13
U.S.-BASED private asset management firm Rohatyn Group said on Monday that it has agreed to acquire 60 percent of CapAsia, the private equity arm of Malaysia’s CIMB Group Holdings Bhd .
FEBRUARY 10
INDIA’S RELIANCE Communications reported its 10th straight quarter of declining profit as interest costs soared, with investors betting on a sale of the No. 2 mobile operator’s tower business to pare its heavy debt load.http://tourism9.com/ http://vkins.com/
2012年1月19日星期四
PRESS DIGEST – Financial Times – Jan 19
Financial Times
FEARS RISE OVER LOOMING COMMERZBANK AND MPS FISCAL PLANS
European regulators are convinced that two of the continent’s banks, Commerzbank (Other OTC: CRZBF.PK – news) and Monte dei Paschi (Milan: BMPS.MI – news) , will fail to produce credible plans to plug capital deficits by Friday’s deadline, exposing both to the risk of full or partial nationalisation. http://www.ft.com/cms/s/0/7e956578-4202-11e1-9506-00144feab49a.html#axzz1jYRS14J4
RBS PAY PLANS TEST RESOLVE ON REWARDS
David Cameron’s pledge to curb executive pay and stop “rewards for failure” is set to face its biggest test, as Royal Bank of Scotland prepares to offer a bonus of more than 1 million pound to its chief executive, even though the state-controlled bank’s share price has almost halved in a year. http://www.ft.com/cms/s/0/eb2aa428-41c1-11e1-a586-00144feab49a.html#axzz1jYRS14J4
CAIRN INVESTORS CRITICISE CHIEF’S BONUS
Some of the biggest shareholders in Cairn Energy (LSE: CNE.L – news) , the oil group, are marshalling support to vote down a pay award worth nearly 2.5 million pounds for the Edinburgh-based oil group’s chief executive-turned-chairman Bill Gammell. http://www.ft.com/cms/s/0/e499aca4-41e8-11e1-a586-00144feab49a.html#axzz1jYRS14J4
LSE IN U-TURN ON ITALIAN STOCKS
The London Stock Exchange plans to shift the trading system used for trading Italian stocks back to Milan after complaints from Italian banks and brokers that their trades had been slowed down by taking place in the UK capital. http://www.ft.com/cms/s/0/c0a28298-41f3-11e1-a1bf-00144feab49a.html#axzz1jYRS14J4
WPP HOPING FOR US ELECTION BOOST
WPP (LSE: WPP.L – news) saw a stronger than expected finish to 2011, according to Martin Sorrell, chief executive, as the marketing services group looks forward to improving conditions in the U.S. ahead of a lucrative period of election campaign spending. http://www.ft.com/cms/s/0/eaeb582e-41fb-11e1-a1bf-00144feab49a.html#axzz1jYRS14J4
SEVEN CHARGED OVER WALL STREET INSIDER TRADING
Seven hedge fund portfolio managers and analysts have been charged in a $61.8 million insider trading scheme as U.S. authorities escalate their crackdown on Wall Street corruption. http://www.ft.com/cms/s/0/f8ef1b2c-41d3-11e1-a1bf-00144feab49a.html#axzz1jYRS14J4
IMF REQUESTS $500 BILLION FOR BAIL OUT LOANS
The International Monetary Fund has asked its member countries for an extra $500bn in firepower to combat the world’s spreading fiscal emergencies, which it estimates will generate demand for bail out loans totalling $1 trillion over the next two years. http://www.ft.com/cms/s/0/b0d1a476-41e3-11e1-a586-00144feab49a.html#axzz1jYRS14J4
GERMANY’S CENTRAL BANK TO SELL LEHMAN LOANS
Germany’s central bank is set to sell almost 2 billion euros ($2.6 billion) of property loans left over from the collapse of Lehman Brothers, in a deal that marks the latest sign of the growing appetite for distressed real estate debt. http://www.ft.com/cms/s/0/55c10ddc-41e4-11e1-a586-00144feab49a.html#axzz1jYRS14J4
PAYPAL DRIVES EBAY’S GROWTH
Ebay (NasdaqGS: EBAY – news) reported strong revenue growth in the fourth quarter of 2011, driven mainly by its payment arm, PayPal, which the company expects to be at the centre of its innovation in the coming year. http://www.ft.com/cms/s/0/cbf677f0-422d-11e1-9506-00144feab49a.html#axzz1jYRS14J4
($1 = 0.6490 British pounds) (Reporting by Stephen Mangan)
http://tourism9.com/ http://vkins.com/
FEARS RISE OVER LOOMING COMMERZBANK AND MPS FISCAL PLANS
European regulators are convinced that two of the continent’s banks, Commerzbank (Other OTC: CRZBF.PK – news) and Monte dei Paschi (Milan: BMPS.MI – news) , will fail to produce credible plans to plug capital deficits by Friday’s deadline, exposing both to the risk of full or partial nationalisation. http://www.ft.com/cms/s/0/7e956578-4202-11e1-9506-00144feab49a.html#axzz1jYRS14J4
RBS PAY PLANS TEST RESOLVE ON REWARDS
David Cameron’s pledge to curb executive pay and stop “rewards for failure” is set to face its biggest test, as Royal Bank of Scotland prepares to offer a bonus of more than 1 million pound to its chief executive, even though the state-controlled bank’s share price has almost halved in a year. http://www.ft.com/cms/s/0/eb2aa428-41c1-11e1-a586-00144feab49a.html#axzz1jYRS14J4
CAIRN INVESTORS CRITICISE CHIEF’S BONUS
Some of the biggest shareholders in Cairn Energy (LSE: CNE.L – news) , the oil group, are marshalling support to vote down a pay award worth nearly 2.5 million pounds for the Edinburgh-based oil group’s chief executive-turned-chairman Bill Gammell. http://www.ft.com/cms/s/0/e499aca4-41e8-11e1-a586-00144feab49a.html#axzz1jYRS14J4
LSE IN U-TURN ON ITALIAN STOCKS
The London Stock Exchange plans to shift the trading system used for trading Italian stocks back to Milan after complaints from Italian banks and brokers that their trades had been slowed down by taking place in the UK capital. http://www.ft.com/cms/s/0/c0a28298-41f3-11e1-a1bf-00144feab49a.html#axzz1jYRS14J4
WPP HOPING FOR US ELECTION BOOST
WPP (LSE: WPP.L – news) saw a stronger than expected finish to 2011, according to Martin Sorrell, chief executive, as the marketing services group looks forward to improving conditions in the U.S. ahead of a lucrative period of election campaign spending. http://www.ft.com/cms/s/0/eaeb582e-41fb-11e1-a1bf-00144feab49a.html#axzz1jYRS14J4
SEVEN CHARGED OVER WALL STREET INSIDER TRADING
Seven hedge fund portfolio managers and analysts have been charged in a $61.8 million insider trading scheme as U.S. authorities escalate their crackdown on Wall Street corruption. http://www.ft.com/cms/s/0/f8ef1b2c-41d3-11e1-a1bf-00144feab49a.html#axzz1jYRS14J4
IMF REQUESTS $500 BILLION FOR BAIL OUT LOANS
The International Monetary Fund has asked its member countries for an extra $500bn in firepower to combat the world’s spreading fiscal emergencies, which it estimates will generate demand for bail out loans totalling $1 trillion over the next two years. http://www.ft.com/cms/s/0/b0d1a476-41e3-11e1-a586-00144feab49a.html#axzz1jYRS14J4
GERMANY’S CENTRAL BANK TO SELL LEHMAN LOANS
Germany’s central bank is set to sell almost 2 billion euros ($2.6 billion) of property loans left over from the collapse of Lehman Brothers, in a deal that marks the latest sign of the growing appetite for distressed real estate debt. http://www.ft.com/cms/s/0/55c10ddc-41e4-11e1-a586-00144feab49a.html#axzz1jYRS14J4
PAYPAL DRIVES EBAY’S GROWTH
Ebay (NasdaqGS: EBAY – news) reported strong revenue growth in the fourth quarter of 2011, driven mainly by its payment arm, PayPal, which the company expects to be at the centre of its innovation in the coming year. http://www.ft.com/cms/s/0/cbf677f0-422d-11e1-9506-00144feab49a.html#axzz1jYRS14J4
($1 = 0.6490 British pounds) (Reporting by Stephen Mangan)
http://tourism9.com/ http://vkins.com/
2012年1月9日星期一
Student loans: Pay them down or start an emergency fund?
Student loans are above $50,000, but there are ways to balance saving with paying down debt. See questions No. 2, 3, and 5 for advice on student loans.
http://tourism9.com/
What’s inside? Here are the questions answered in today’s reader mailbag, boiled down to five word summaries.
1. Investing in light of default
2. Debt eradication
3. Loans or emergency fund?
4. Repetitive questions
5. What’s next on my path?
6. Time for a financial advisor?
7. Polite hygiene advice
8. Wedding and financial planning
9. What are readers like?
10. 2012 predictions
Skip to next paragraph
How long does it take for you to stop dating checks and other documents with the previous year after the calendar flips?
I’ll admit that it will probably take me most of January to get used to writing 2012.
Q1: Investing in light of default
I have a small IRA, with half in a mutual fund, which has topped out, and the other half in two stocks which are near to bottoming out, from a lag factor associated with recession and reinvestment.
I anticipate a currency devaluation as an effect of renegotiation or default on national debt limits. Would overseas money markets be a safe place to stash funds from the sale of the mutual while I wait for it to drop so I can repurchase it? If you believe that our debt problems will negatively impact overseas money markets, what is an alternate spot, exclusive of index funds, which will drop as the market does?
- Monica
I don’t think I would trust overseas money markets more than domestic ones, as I think a lot of economies are facing some sort of currency devaluation due to the ongoing economic conditions.
I also wouldn’t bank my entire plan on market timing, particularly when you’re making moves based on a sense of a fund having “topped out” or “bottoming out.” If I were you and I moved forward with this plan, I’d set some thresholds on when to buy back in. For example, you might want to say that you’ll buy back in after three months if either the value of the fund is down, say, 15% or it matches the value you sold it at.
Don’t worry about what the absolute top of the market is or what the bottom is – worry about making money for yourself.
Q2: Debt eradication
I’m a 22-year old student who will graduate with a B.A. in December. I took out some federal and private loans to pay for school. I saved for the past year and paid off the private loans while in school. I’ll be left with $16,000 at 6.8% when I graduate. I have no other debt and a 3-month emergency fund ($6,000). I plan to make payments well over the minimum to pay this balance off in 2 years or less.
Is this a good thing? The more I research credit and credit scores, it seems that a relatively low-balance loan isn’t a bad thing to keep around for ten, even fifteen years. However, having a positive net worth is my #1 priority. Should I be making aggressive payments or simply using that money to pad my retirement and savings while keeping the loan around? While paying the loan aggressively I’ll still be contributing 15% of my net income to an IRA. I have one credit card with a $500 limit; never carried a balance. I pay bills on time every month. I currently rent. A house isn’t on my to-do list, and I’ll buy a car outright if I get one in the future. Is it enough to build my credit without a credit card balance, mortgage, car payment, and (soon) no student loan?
- Belinda
I don’t think the value of having a 6.8% student loan (in terms of your credit score) is worth the financial cost of having to pay 6.8% interest on the balance every year. If it’s within your means without causing other financial troubles, I would pay it off sooner rather than later.
Given that you do have a continuing line of credit in the form of your credit card, your credit report won’t go completely empty after you pay off the student loan. I would consider using the card regularly (and paying off the balance) and being open to moderate raises in your credit limit.
You’re doing very well. Keep along your current path and you’ll continue to do very well.
Q3: Loans or emergency fund?
I’ll graduate from grad school this May with $25,500 in federal subsidized loans (spouse and I also still have $27k combined undergrad debt at 5.3%). I haven’t technically needed these loans for the last year of school but because they’re subsidized I’ve been storing the money in a rewards checking account earning about 3%. It will be around 12,000 total in November when the subsidization ends and 6.8% interest kicks in. This is the extent of our short-term savings/emergency fund right now (my spouse and I are also saving for retirement). So, since we are looking to save for life’s big things in the next few years (car, family, and house, probably in that order), and we don’t have a defined emergency fund amount, I wonder how much of that 12k should we pay back immediately? We’re currently steadily employed though I’m seeking new full-time work in my desired field instead of my current part-time job. We have roughly $1000 extra/month to put to good use on student loan repayment and savings (we’re a pretty frugal couple), but I’m not sure what the best combination would be. We have to pay minimum $400/mo on our student loans. Is it best to pay more on student loans and postpone more emergency/car/baby/home savings? Is it best to pay back the entire $12k “savings” (which is really borrowed money) and start our “real” savings from scratch? I’m lost and confused and would be interested in your and your readers’ opinions.
- Danika
If I were you, I would establish a new emergency fund and fund it with enough money to provide three months or so of living expenses for you and your partner. I would then use the remainder to pay off your highest loan and then use the subsequent $1,000 per month toward minimum payments and whatever loan has the highest interest rate.
I would count that 6.8% loan as already having that rate and make “payments” on that debt to a savings account. Then, when the subsidization ends, I’d pay the entire balance of that savings account to that 6.8% loan.
In terms of balancing emergency protection and a path toward debt freedom, I think this is a very good plan.
Q4: Repetitive questions
I’ve noticed that there are a lot of consistent shall we say themes in your reader mailbag questions. Student loans come up a lot for example and so does retirement. Why repeat so much?
- Shaun
The reason these stories show up so often is because they’re the type of concerns that cause people to really start thinking about their finances and because they are so common among people. A lot of people leave college with student loans and they worry about paying them off.
I use a lot of these types of questions because there are a lot of variations in the story and because it’s a genuine concern that a lot of people out there have.
I try to choose questions that reflect the whole of the questions that I receive. I do often pick out specific interesting ones, but I also see from my email inbox that I get a LOT of questions about student loans, so I cover those questions.
Q5: What’s next on my path?
I’m now fortunate to be in a position where I’m (finally) earning a great wage at a company I have no intention of leaving anytime soon, living in a city (NYC) that I love, and living well below my means.
It’s been drilled into me for years that paying off your credit card(s) and building a healthy emergency fund are the first foundation steps to a healthy financial life. I’ve accomplished both (finally!), and have $0 credit card debt (only one credit card), and $11,000 in savings. I still have outstanding student loans, which I’m paying back and contributing more than the minimum on each month – these are at a very low interest rate, and the total repayment each month comes to $350. Paying off one would save me about half of that amount as the payments are pretty much equal between the loans.
I’m also putting $12,000/year into a 401(k), and am planning on continuing to contribute $1,000/mo into my savings account for the next 9 months – until it reaches $20,000. Since I live in NYC, I plan on renting for quite a few more years and I’m planning ahead for when I’ll want to move (moving into a new apartment here typically costs $4-5,000 upfront in costs for my price range – first month’s rent, last month’s rent, possibly a broker’s fee and a security deposit). 6 months of my bills (if I were laid off) comes to about $15,000, and that’s my emergency fund savings goal since I don’t have close family in the area and wouldn’t want to have to move due to prolonged unemployment. The $20,000 goal for this year assumes that I’ll want to move within the next year, which is a possibility (but not set in stone).
I’m not in a hurry to change my plans right now as I still have a bit of time left to contribute to my savings account, but I’d like to have some solid steps in place when I get there.
So – what comes next? It seems like after the savings account, credit card and retirement account are all healthy (or being contributed to healthily), that any number of options open up. I don’t get an employer match on my 401(k), so it’s 100% my own money in there, and I’d like to max it out for a few years, due to not being able to contribute anything in my younger 20′s (4 years of working w/o the spare $$ to contribute). But, I’ll still have a good amount of money that I’m now putting into savings left over after maxing out my 401(k), and I want to make sure I’m investing it wisely, if that’s even the right first step after this.
Are there any recommended steps after this point, or does it depend on the individual and their goals?
- Jill
It really comes down to goal-setting more than anything else.
Simply put, there is no general right way to invest. There are only good ways to invest to help you reach a specific goal. If you don’t know what you’re saving for, you’re probably going to save in an inopportune manner.
Let’s say, for example, that you decide to start investing in stocks because you heard they have a great return, not because you had any goals in mind. Let’s say you make this decision in January 2008. In December 2008, you decide to buy a house because you got pregnant and you decided you needed a house for that child. Your money has now lost 40% of its value.
You would have been far better off in a savings account had you incorporated the idea of buying a house in the next one or two years into your plan.
Spend some time thinking about where you want your life to be in five years or ten years. Where are you headed? Your investment choices should really follow that.
Jill also had a follow-up question.
1. Investing in light of default
2. Debt eradication
3. Loans or emergency fund?
4. Repetitive questions
5. What’s next on my path?
6. Time for a financial advisor?
7. Polite hygiene advice
8. Wedding and financial planning
9. What are readers like?
10. 2012 predictions
Skip to next paragraph
Trent Hamm
The Simple Dollar is a blog for those of us who need both cents and sense: people fighting debt and bad spending habits while building a financially secure future and still affording a latte or two. Our busy lives are crazy enough without having to compare five hundred mutual funds – we just want simple ways to manage our finances and save a little money.
The Simple Dollar is a blog for those of us who need both cents and sense: people fighting debt and bad spending habits while building a financially secure future and still affording a latte or two. Our busy lives are crazy enough without having to compare five hundred mutual funds – we just want simple ways to manage our finances and save a little money.
Recent posts
I’ll admit that it will probably take me most of January to get used to writing 2012.
Q1: Investing in light of default
I have a small IRA, with half in a mutual fund, which has topped out, and the other half in two stocks which are near to bottoming out, from a lag factor associated with recession and reinvestment.
I anticipate a currency devaluation as an effect of renegotiation or default on national debt limits. Would overseas money markets be a safe place to stash funds from the sale of the mutual while I wait for it to drop so I can repurchase it? If you believe that our debt problems will negatively impact overseas money markets, what is an alternate spot, exclusive of index funds, which will drop as the market does?
- Monica
I don’t think I would trust overseas money markets more than domestic ones, as I think a lot of economies are facing some sort of currency devaluation due to the ongoing economic conditions.
I also wouldn’t bank my entire plan on market timing, particularly when you’re making moves based on a sense of a fund having “topped out” or “bottoming out.” If I were you and I moved forward with this plan, I’d set some thresholds on when to buy back in. For example, you might want to say that you’ll buy back in after three months if either the value of the fund is down, say, 15% or it matches the value you sold it at.
Don’t worry about what the absolute top of the market is or what the bottom is – worry about making money for yourself.
Q2: Debt eradication
I’m a 22-year old student who will graduate with a B.A. in December. I took out some federal and private loans to pay for school. I saved for the past year and paid off the private loans while in school. I’ll be left with $16,000 at 6.8% when I graduate. I have no other debt and a 3-month emergency fund ($6,000). I plan to make payments well over the minimum to pay this balance off in 2 years or less.
Is this a good thing? The more I research credit and credit scores, it seems that a relatively low-balance loan isn’t a bad thing to keep around for ten, even fifteen years. However, having a positive net worth is my #1 priority. Should I be making aggressive payments or simply using that money to pad my retirement and savings while keeping the loan around? While paying the loan aggressively I’ll still be contributing 15% of my net income to an IRA. I have one credit card with a $500 limit; never carried a balance. I pay bills on time every month. I currently rent. A house isn’t on my to-do list, and I’ll buy a car outright if I get one in the future. Is it enough to build my credit without a credit card balance, mortgage, car payment, and (soon) no student loan?
- Belinda
I don’t think the value of having a 6.8% student loan (in terms of your credit score) is worth the financial cost of having to pay 6.8% interest on the balance every year. If it’s within your means without causing other financial troubles, I would pay it off sooner rather than later.
Given that you do have a continuing line of credit in the form of your credit card, your credit report won’t go completely empty after you pay off the student loan. I would consider using the card regularly (and paying off the balance) and being open to moderate raises in your credit limit.
You’re doing very well. Keep along your current path and you’ll continue to do very well.
Q3: Loans or emergency fund?
I’ll graduate from grad school this May with $25,500 in federal subsidized loans (spouse and I also still have $27k combined undergrad debt at 5.3%). I haven’t technically needed these loans for the last year of school but because they’re subsidized I’ve been storing the money in a rewards checking account earning about 3%. It will be around 12,000 total in November when the subsidization ends and 6.8% interest kicks in. This is the extent of our short-term savings/emergency fund right now (my spouse and I are also saving for retirement). So, since we are looking to save for life’s big things in the next few years (car, family, and house, probably in that order), and we don’t have a defined emergency fund amount, I wonder how much of that 12k should we pay back immediately? We’re currently steadily employed though I’m seeking new full-time work in my desired field instead of my current part-time job. We have roughly $1000 extra/month to put to good use on student loan repayment and savings (we’re a pretty frugal couple), but I’m not sure what the best combination would be. We have to pay minimum $400/mo on our student loans. Is it best to pay more on student loans and postpone more emergency/car/baby/home savings? Is it best to pay back the entire $12k “savings” (which is really borrowed money) and start our “real” savings from scratch? I’m lost and confused and would be interested in your and your readers’ opinions.
- Danika
If I were you, I would establish a new emergency fund and fund it with enough money to provide three months or so of living expenses for you and your partner. I would then use the remainder to pay off your highest loan and then use the subsequent $1,000 per month toward minimum payments and whatever loan has the highest interest rate.
I would count that 6.8% loan as already having that rate and make “payments” on that debt to a savings account. Then, when the subsidization ends, I’d pay the entire balance of that savings account to that 6.8% loan.
In terms of balancing emergency protection and a path toward debt freedom, I think this is a very good plan.
Q4: Repetitive questions
I’ve noticed that there are a lot of consistent shall we say themes in your reader mailbag questions. Student loans come up a lot for example and so does retirement. Why repeat so much?
- Shaun
The reason these stories show up so often is because they’re the type of concerns that cause people to really start thinking about their finances and because they are so common among people. A lot of people leave college with student loans and they worry about paying them off.
I use a lot of these types of questions because there are a lot of variations in the story and because it’s a genuine concern that a lot of people out there have.
I try to choose questions that reflect the whole of the questions that I receive. I do often pick out specific interesting ones, but I also see from my email inbox that I get a LOT of questions about student loans, so I cover those questions.
Q5: What’s next on my path?
I’m now fortunate to be in a position where I’m (finally) earning a great wage at a company I have no intention of leaving anytime soon, living in a city (NYC) that I love, and living well below my means.
It’s been drilled into me for years that paying off your credit card(s) and building a healthy emergency fund are the first foundation steps to a healthy financial life. I’ve accomplished both (finally!), and have $0 credit card debt (only one credit card), and $11,000 in savings. I still have outstanding student loans, which I’m paying back and contributing more than the minimum on each month – these are at a very low interest rate, and the total repayment each month comes to $350. Paying off one would save me about half of that amount as the payments are pretty much equal between the loans.
I’m also putting $12,000/year into a 401(k), and am planning on continuing to contribute $1,000/mo into my savings account for the next 9 months – until it reaches $20,000. Since I live in NYC, I plan on renting for quite a few more years and I’m planning ahead for when I’ll want to move (moving into a new apartment here typically costs $4-5,000 upfront in costs for my price range – first month’s rent, last month’s rent, possibly a broker’s fee and a security deposit). 6 months of my bills (if I were laid off) comes to about $15,000, and that’s my emergency fund savings goal since I don’t have close family in the area and wouldn’t want to have to move due to prolonged unemployment. The $20,000 goal for this year assumes that I’ll want to move within the next year, which is a possibility (but not set in stone).
I’m not in a hurry to change my plans right now as I still have a bit of time left to contribute to my savings account, but I’d like to have some solid steps in place when I get there.
So – what comes next? It seems like after the savings account, credit card and retirement account are all healthy (or being contributed to healthily), that any number of options open up. I don’t get an employer match on my 401(k), so it’s 100% my own money in there, and I’d like to max it out for a few years, due to not being able to contribute anything in my younger 20′s (4 years of working w/o the spare $$ to contribute). But, I’ll still have a good amount of money that I’m now putting into savings left over after maxing out my 401(k), and I want to make sure I’m investing it wisely, if that’s even the right first step after this.
Are there any recommended steps after this point, or does it depend on the individual and their goals?
- Jill
It really comes down to goal-setting more than anything else.
Simply put, there is no general right way to invest. There are only good ways to invest to help you reach a specific goal. If you don’t know what you’re saving for, you’re probably going to save in an inopportune manner.
Let’s say, for example, that you decide to start investing in stocks because you heard they have a great return, not because you had any goals in mind. Let’s say you make this decision in January 2008. In December 2008, you decide to buy a house because you got pregnant and you decided you needed a house for that child. Your money has now lost 40% of its value.
You would have been far better off in a savings account had you incorporated the idea of buying a house in the next one or two years into your plan.
Spend some time thinking about where you want your life to be in five years or ten years. Where are you headed? Your investment choices should really follow that.
Jill also had a follow-up question.
http://tourism9.com/
2012年1月2日星期一
Miami Investment Properties For Your Own Rental Business Do You Have What It Takes To Succeed?
Numerous investors today have come to understand what great potential lies in the real estate market of Miami which is the fabulous region located along the Atlantic coast of South Florida where people can expect to find a spectacular range of Miami investment properties which are perfect for those who are looking to begin making a profit through real estate.
Being a location which has managed to earn its ranks among the most amazing beach resort destinations in the world, Miami is definitely the best market for beginning real estate investors and knowing that there will always be a demand for rental properties proves to be the key to one’s overall success.
However, before going out into the market to get started, it is important for investors to consider whether becoming the owner of a rental property within Miami is going to be a suitable investment to make and we have come up with a few pointers to help you figure out if Miami investment properties are going to be worth your time and energy.
• Are you comfortable with financing strategies? Taking on the responsibilities that come with owning and running Miami investment properties involves a lot of time, money, and hard work. If you have what it takes to push through with these types of obligations then you should carry on with your plans.
• Do you know other investors who run rentals within Miami? If you do, you will find it easier to pick up on what these investments entail and you will be able to collect information which can help you succeed with your own rental venture.
• Are you financially prepared? Becoming the owner of an operational rental venture is going to involve a lot of money and people who are interested in taking on Miami investment properties for these purposes will find that it is always a good idea to start by adding up the monthly mortgage payments and property taxes. Also, insurance expenses are going to be an important aspect that an investor will want to look into.
• Will you be putting up advertisements? Much like any other business, people find that having advertisements up can help boost the amount of business that your Miami investment properties can generate, especially since rental options will not always be occupied — leaving investors will lower income potential. If you are hoping to get the best business possible, advertising might be a good option for you to consider as long as your budget allows it.
There are many other factors that potential investors will want to consider as they go about learning more when it comes to Miami investment properties. Nevertheless, it has been proven time and again that being able to invest in these types of real estate options has been an effective way of generating profit.
Joan Vonnegut
Miami Investment Properties
http://tourism9.com/
Being a location which has managed to earn its ranks among the most amazing beach resort destinations in the world, Miami is definitely the best market for beginning real estate investors and knowing that there will always be a demand for rental properties proves to be the key to one’s overall success.
However, before going out into the market to get started, it is important for investors to consider whether becoming the owner of a rental property within Miami is going to be a suitable investment to make and we have come up with a few pointers to help you figure out if Miami investment properties are going to be worth your time and energy.
• Are you comfortable with financing strategies? Taking on the responsibilities that come with owning and running Miami investment properties involves a lot of time, money, and hard work. If you have what it takes to push through with these types of obligations then you should carry on with your plans.
• Do you know other investors who run rentals within Miami? If you do, you will find it easier to pick up on what these investments entail and you will be able to collect information which can help you succeed with your own rental venture.
• Are you financially prepared? Becoming the owner of an operational rental venture is going to involve a lot of money and people who are interested in taking on Miami investment properties for these purposes will find that it is always a good idea to start by adding up the monthly mortgage payments and property taxes. Also, insurance expenses are going to be an important aspect that an investor will want to look into.
• Will you be putting up advertisements? Much like any other business, people find that having advertisements up can help boost the amount of business that your Miami investment properties can generate, especially since rental options will not always be occupied — leaving investors will lower income potential. If you are hoping to get the best business possible, advertising might be a good option for you to consider as long as your budget allows it.
There are many other factors that potential investors will want to consider as they go about learning more when it comes to Miami investment properties. Nevertheless, it has been proven time and again that being able to invest in these types of real estate options has been an effective way of generating profit.
Joan Vonnegut
Miami Investment Properties
http://tourism9.com/
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