As far as possible, try to invest in index funds because:
1. Fund managers try very hard to beat the index they are tracking, and very few fund managers manage to beat the index.
2. Expenses in index funds are much lower, effectively increasing your returns.
3. Taxes in index funds are lower due to less frequent selling.
Monday, October 22, 2007
Balance Transfer Offers
Be careful about 0% balance transfer offer from credit card companies for the following reasons:
1. Usually, there's a 3% fee; hence, if the offer is for a year, you are paying 3%.
2. If the offer is for less than a year, you are effectively paying more than 3%.
3. Companies apply your monthly payments to the lower interest balance first. So, never do a transfer if you use it for purchases that always have a higher rate. You will only end up paying an obnoxiously high interest rate unless you pay all your balances in full, including your balance transfer, effectively nullyfing the reason for doing the balance transfer in the first place.![]()
1. Usually, there's a 3% fee; hence, if the offer is for a year, you are paying 3%.
2. If the offer is for less than a year, you are effectively paying more than 3%.
3. Companies apply your monthly payments to the lower interest balance first. So, never do a transfer if you use it for purchases that always have a higher rate. You will only end up paying an obnoxiously high interest rate unless you pay all your balances in full, including your balance transfer, effectively nullyfing the reason for doing the balance transfer in the first place.
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