investopedia Archives - MoneyThumb

A Great List of Resources to Improve Your Financial Literacy

Denise Grier — Tue, 13 Jul 2021 12:06:58 +0000

If your goal in 2021 is to improve your financial literacy, which means expanding your knowledge of money and how to maneuver through your finances with better ease, there are many avenues you can pursue. Today on the Rules of Thumb blog from MoneyThumb we will list below some great resources to help you improve your financial literacy.

Find a Good Book

For anyone trying to build financial literacy, the obvious place to start is a good book. The big advantages of print are that you can go at your own pace and home in on the topics that interest you the most. Any good library will have a pretty vast selection to choose from, but here are some highly regarded titles to start you off.

Investopedia has a great list of books on financial literacy which we have listed below:

Personal Finance for Dummies by Eric Tyson

Sure, opening up a book designed for “dummies” takes some humility, but those who dig through Eric Tyson’s expansive tome are usually rewarded. At more than 400 pages, Tyson covers it all—from budgeting and investing in mutual funds to understanding automobile insurance and navigating the financial aspects of divorce.

Broke Millennial: Stop Scraping By and Get Your Financial Life Together by Erin Lowry

Those first few years after college are often a time when we learn financial lessons the hard way. That needn’t be the case.

Erin Lowry’s 2017 work takes square aim at the pivotal money decisions faced by young adults. Of course, she delves into some of the bread-and-butter stuff, such as how credit scores work and how to budget. However, you’ll also find chapters on assessing your emotional relationship with money and discussing financial issues with your significant other. Best of all, Lowry’s conversational style shows that a finance book can actually be a pretty good read.

Why Didn’t They Teach Me This in School? by Cary Siegel

If you’re looking for an in-depth explanation of how various financial products work, this probably isn’t the book for you. However, if you want some easily digestible advice on how to make smarter money choices, Cary Siegel’s Why Didn’t They Teach Me This in School? is a gem. Crammed inside are 99 basic principles involving standard topics such as budgeting, investing, and housing. Siegel argues, for example, that marrying a financially compatible spouse is a key to happiness and explains why high-deductible health insurance plans are almost invariably the best.

Subscribe to a Financial Magazine

With so much great content available on the web, forking over money for a print magazine might seem like an antiquated approach. Still, finding a publication in your mailbox every week or every month keeps you from falling off the finance wagon for too long. In addition, magazines have a way of introducing you to topics and ideas you wouldn’t have sought out on your own. Below are some of the best when it comes to developing your financial acumen.

Kiplinger

There are other publications that contain personal finance information, but Kiplinger is the only print magazine left that’s focused entirely on investing and money management. Unlike a number of other finance outlets clearly geared toward the business class, Kiplinger has always focused on clear-cut advice for everyday investors. Published monthly, it contains articles on investments, tax strategies, estate planning, and more.

Barron’s

For someone who already has a fairly strong grasp of how markets work, Barron’s is a great tool for discerning the outlook of specific industries and companies. The weekly newspaper magazine offers stock picks, breakdowns of top-selling mutual funds, and other actionable content designed to give active investors an edge.

The Economist

Compared to the other publications on this list, the Economist casts a broader net. Readers will find articles on economics as well as politics, technology, and the arts. It’s not the straightforward advice-based content you’ll find in, say, Kiplinger, but for readers hoping to get a sense of which events are shaping the global markets, this U.K.-based magazine is a treasure.

Tune in to a Podcast

Whether you’re in the car, going for a jog, or doing work around the house, podcasts are an easy way to absorb some money management tips without a whole lot of effort. The iTunes landscape is pretty crowded, so you’re bound to stumble upon any number of worthwhile shows. Here are a few of our favorites, in addition to The Investopedia Express, Editor-in-Chief Caleb Silver's weekly take on all things financial.

Millennial Money

A certified financial planner turned podcaster, Shannah Compton Game says her goal is to demolish the taboo of talking about money.7 Released twice a week, the podcast features interviews with fellow finance experts on topics ranging from paying off student loan debt to negotiating your salary.8 If you’re looking for something geared toward the financial lives of young adults, this accessible show is hard to beat.

BiggerPockets Money

The guests on this popular podcast are ordinary folks who happened to turn their financial lives around by adopting smart money strategies. Led by hosts Scott Trench and Mindy Jensen, BiggerPockets is all about sharing actionable advice that can work for everyday people.

Planet Money

Those seeking a better understanding of what’s going on with the economy will probably find NPR's Planet Money a great starting point. The podcast likes to take recent news stories—the development of a COVID-19 vaccine or trade wars with China, for example—and give them added context. The show doesn’t always take aim at the big headlines, though; one recent episode tackled the economic effects of lowering food prices at a football game. If you’re curious about all things economics, this is for you.

The post A Great List of Resources to Improve Your Financial Literacy appeared first on MoneyThumb.

The Fascinating History Of Accounting

Denise Grier — Tue, 09 Oct 2018 10:10:22 +0000

For people who are not in the accounting profession, fascinating would surely not describe anything to do with accounting. But for math heads who keep books, accounting does offer some fascinating aspects. Unless you are a bookkeeper, accountant or CPA, you won't understand the satisfaction that comes with balancing a ledger sheet.

Today the Rules of Thumb blog from MoneyThumb would like to take the subject of fascination one step further and review the history of accounting. It really is VERY interesting. We found the following fascinating facts about the history of accounting at Investopedia:

"The name that looms largest in early accounting history is Luca Pacioli, who in 1494 first described the system of double-entry bookkeeping used by Venetian merchants in his “Summa de Arithmetica, Geometria, Proportioni et Proportionalita.” Of course, businesses and governments had been recording business information long before the Venetians. But it was Pacioli who was the first to describe the system of debits and credits in journals and ledgers that is still the basis of today's accounting systems.

The industrial revolution spurred the need for more advanced cost accounting systems, and the development of corporations created large groups who were not part of a firm’s management but had a vested interest in the company’s results—namely, shareowners and bondholders who provided external financing. The rising public status of accountants helped to transform accounting into a profession, first in the United Kingdom and then in the United States. In 1887, thirty-one accountants joined together to create the American Association of Public Accountants. The first standardized test for accountants was given a decade later, and the first CPAs were licensed in 1896.

The Great Depression led to the creation of the Securities and Exchange Commission (SEC) in 1934. All publicly-traded companies were required to file periodic reports with the Commission which had been? certified by members of the accounting profession. The American Institute of Certified Public Accountants (AICPA) and its predecessors had responsibility for setting accounting standards until 1973 when the Financial Accounting Standards Board (FASB) was established. In WHEN TK, the AICPA, and the FASB began to establish the Generally Accepted Accounting Principles (GAAP) standards for the U.S. The accounting industry thrived in the late 20th century, as the large accounting firms expanded their services beyond the traditional auditing function to many forms of consulting. However, as their responsibilities expanded beyond that of financial watchdog, accounting firms also began to get embroiled in corporate scandals.

The Enron scandal in 2001 had broad repercussions for the accounting industry. One of the top accounting firms, Arthur Andersen, went out of business and, under the Sarbanes-Oxley Act, accountants faced tougher restrictions on their consulting engagements. One of the paradoxes of the profession, however, is that accounting scandals generate more work for accountants, and demand for their services continued to boom throughout the early part of the 21st century."

If you are a bookkeeper, accountant, or CPA we think you will agree that the above information is quite fascinating. The Rules of Thumb blog from MoneyThumb hopes you enjoyed learning about the history of accounting enough to share this blog post with your friends on social media. They might also enjoy learning about the fascinating history of accounting.

The post The Fascinating History Of Accounting appeared first on MoneyThumb.

6 Personal Finance Tips from Billionaires

Denise Grier — Fri, 13 Jul 2018 12:41:44 +0000

6 Personal Finance Tips from Billionaires

Keep Your Home Simple
Frugal billionaires like Warren Buffet choose to keep it simple. Buffet still lives in the five-bedroom house in Omaha that he purchased in 1957 for $31,500.
Use Self-Powered or Public Transportation
Thrifty billionaires including John Caudwell, David Cheriton, and Chuck Feeney prefer to walk, bike or use public transportation when getting around town. Certainly, these wealthy individuals could afford to take a helicopter to their lunch meetings or ride in chauffeur-driven Bentleys, but they choose to get a little exercise and take advantage of public transportation instead. Good for the bank account and great for the environment.
Buy Your Clothes off the Rack
While some people, regardless of their net value, place a huge emphasis on wearing designer clothes and shoes, some frugal billionaires decide it's simply not worth the effort, or expense. You can find David Cheriton, the Stanford professor who matched Google founders Sergey Brin and Larry Page to the venture capitalists at Kleiner, Perkins, Caufield & Byers (resulting in a large reward of Google stock), wearing jeans and a t-shirt. Ingvar Kamprad, the founder of the furniture company Ikea, avoids wearing suits, and John Caudwell, a mobile phone mogul, buys his clothes off the rack instead of spending his wealth on designer clothes.
Keep your Scissors Sharp
The average haircut costs about $45, but people can and do spend up to $800 per cut and style. Multiply that by 8.6 (to account for a cut every six weeks) and it adds up to $7,200 per year, not including tips. These billionaires can certainly afford the most stylish haircuts, but many cannot be bothered by the time it takes or the high price tag for the posh salons. Billionaires like John Caudwell and David Cheriton opt for cutting their own hair at home.
Drive a Regular Car
While billionaires like Larry Ellison (co-founder and CEO of Oracle Corporation) enjoy spending millions on cars, boats, and planes, others remain low key with their vehicles of choice. Jim Walton (of the Wal-Mart clan) drives a 15-year-old pickup truck. Azim Premji, an Indian business tycoon, reportedly drives a Toyota Corolla. And Ingvar Kamprad of Ikea drives a 10-year-old Volvo. The idea is to buy a dependable car, and drive it into the ground. No need for a different car each day of the week for these frugal billionaires.
Skip Luxury Items
It may surprise some of us, but the world's wealthiest person, Carlos Slim (the one who could spend more than a thousand dollars a minute and not run out of money for one hundred years) does not own a yacht or a plane. (Reducing the amount you spend is the easiest way to make your money grow. Many other billionaires have chosen to skip these luxury items. Warren Buffet also avoids these lavish material items, stating "Most toys are just a pain in the neck."

As you can see, some of the world's billionaires have frugal tendencies. No matter what your income bracket is you can usually find a way to cut back on frivolous spending, just like these frugal billionaires.

The post 6 Personal Finance Tips from Billionaires appeared first on MoneyThumb.