How much would you pay for water?
Friday, as usual, is my more private posts day. So today I decided to tell you about a conversation that I had couple of weeks ago. I was in Italy, at a conference. Conference dinners can be one of the most arduous and boring affairs ever; particularly if one has the sense not to use them to do politiking and to annoy the ones they consider more advanced with countless claims to greatness and minute details of their latest mediocre research project. I believe that dinners are for fun and getting to know people outside their job (if they wish to open up, this is); and thinking about it I have been to one splendid conference dinner in Mexico City – Mexicans know how to entertain and have fun. I even got a ‘mercy dance’! Continue reading
Why I say ‘negative wealth’ and not ‘debt’?
Those amongst my readers who either ‘know me’ from elsewhere in the virtual world or are very perceptive (or both) have already noticed that I hardly ever – in fact, it is fair to say that I never – talk about ‘debt’. Except to strike it and substitute it for ‘negative wealth’. It is time to clarify why I talk about ‘negative wealth’ rather than about ‘debt’. I have come up with four main reasons for that. Here they are. Continue reading
Castles and homes: when does it make sense to rent?
Sometime ago the Office for National Statistics published its report Wealth in Great Britain: main results from the wealth and assets survey 2006/2008. According to it on average half of our wealth is tied in non-income generating real estate; or put in another way in our houses. This should not come as a surprise: people in the UK see their houses mostly as an investment. More seriously, we see our houses as our main investment. Our houses are our castles and paying off the mortgage gives us a sense of security and achievement. Continue reading
Match made in heaven: the beauty of Zopa finance is, it cuts out the bank ‘middleman’!
This article is written by Rebecca Boden; professor in management accounting and Money Principle Master Extraordinaire.
Have you ever wondered what happens to the money that you have in the bank? Disappointingly, they don’t keep it in a giant sock under the bank’s bed.
Banks make some of their profits by borrowing at a lower rate of interest than they lend at and keeping the difference. Most, if not all, current accounts pay no interest to the person who owns the money. And at the moment, bank deposit accounts (savings accounts) pay a very low rate of interest. This means that banks get to use our money for free or very cheaply. Unfortunately, our generosity to banks is not reciprocated: they lend the money that is in our bank accounts onto other people at quite high rates of interest. Continue reading
