Herman Ye

Based on a 2018 Gallup poll , only 37% of young adults (34 and under) invest in the stock market. That's pretty alarming. It means more than half are hindering their ability to save for retirement. By not investing early, the power of compound interest is dampened. Compound interest works like a snowball on a hill, the taller the hill (the longer the runway), the bigger it'll grow. The sooner you invest, the more money you'll have. Many are simply stockpiling money into their bank accounts. Checking accounts typically don't pay anything. With savings accounts, you're lucky to get 1-2%. Inflation is about 2% . Thus, with a checking account, you're losing money every year in terms of purchasing power. With a savings account, at best you break-even.   Stocks have a higher expected return, averaging ~  7%  annually (inflation-adjusted). The higher return is due to the higher risk. Stocks are more volatile, able to dramatically go up and down in the short-...

Have you ever wondered how long it would take for you to double your money? The rule of 72 is a neat math trick to calculate this. This simple formula requires only one input, your expected rate of return. Just divide it by 72 and bam! You got it. # of Years to Double = 72/Annual Rate of Return  Putting the Rule in Action - Danny's Double Danny has $5,000 to invest, with the goal of one day growing it to $10,000. He's planning on investing into a portfolio of low-cost stock ETFs. Stocks typically averages an annual return of  7% , assuming he'll experience the same, how long would it take for his money to double? Using the rule of 72, we find that it'll take about: 72/7 = 10.29 Years So easy! Flipping it Around 10 years is a long time, Danny was hoping to double his money in 5 years. Luckily, we can flip the rule around to find the return he'd need to achieve this. Annual Rate of Return = 72/# of Years to Double Plugging in the numbers, we...

Liquidity is a term frequently used in finance. Today we'll break down what it means and why it's important.

With as many locations as Starbucks, and even more locations than Mcdonald's, you're never too far from a payday loan. Payday lenders are a staple of shady neighbourhood corners and rundown strip malls. You'll recognize one by the many "get money fast" signs plastered all over their windows. Storefronts are often bleak, rundown, and unwelcoming. As someone who've never step foot in one, they've always been a mystery to me.  Why do they exist? W hy are there so many of them? Payday Loans Payday loans are short-term loans offered by alternative lenders (non-banks). These loans usually range from $100 - $1,500. Loans last typically 1 - 4 weeks (depending on the borrower's pay schedule). Payday loans are due on your payday,  hence the name . They're designed for people can't access funds through traditional lenders, could be due to low credit scores, low assets, high debt, etc. Payday loans don't require a credit check or a depos...