Blogging Stocks. When Your Income From Investments Covers Your Living Expenses: The “Crossover Point” About a month and a half ago, I read Your Money or Your Life and found it to be a relevatory experience (check out my review of the book).
One particularly interesting part was a discussion of a concept that the authors referred to as the “crossover point.” Since then, I’ve seen reference to this concept in other places under other names, but I’ll continue to use the same name here. What is the “crossover point”? The crossover point is the point at which your investments begin to earn more money than the cost of your living expenses. The crossover point is usually reached by keeping your living expenses lower than your income and investing that amount for the long term.
Let’s use Joe as an example. As you can see, each year Joe earns an amout equal to the point represented in dark blue, but spends only an amount equal to the point colored in yellow. For many people, the “crossover point” is a major goal. Let’s look at another example, that of Fran. Awesome! Trader Mike. The Big Picture: Rotation Underway: S&P100 to S&P600. Monday, August 14, 2006 | 01:14 PM Technical Analysis gets a bad name, and for all the wrong reasons.
People seem to be put off by some of the more esoteric pattern recognition issues, and that's a shame. I prefer my technicals simple: A good chart is worth more than 1000 words, and can provide greater clarity and conviction than most fundamental stories. For example, for the past 5 years, we have heard pundits wishfully say this was the year of the Big Cap stock. 12 months later: they said, "No, I meant THIS year;" and after another year, we heard, "No THIS year!
Why bother guessing? The chart below is a perfect example: Its apparent that, after 3 years, the downtrend ("Channel") of this relationship has been in has been broken, as has the 50 week moving average: > S&P100 ratio to S&P600 Source: Ritholtz Research & Analytics UPDATE August 14, 2006 2:35pm Rob Fraim sends along this chart via Art Huprich, Technical Analyst at Raymond James The concept is quite similar . . . add to de.li.cious | Get Rich Slowly. The Bonddad Blog. Grad Money Matters: Credit Card Arbitrage (Plus an Image of the $2,000 we Made...) They say a picture speaks a thousand words.
So, here is a picture of my bank statement showing the passive income from credit card arbitrage in the short span of 9 months. I had mentioned earlier about my first attempt at credit card arbitrage. Well, the CD came due on the 1st of June and we made around $2,000 in free money (The picture does not show the interest payment for the last month). If you are new to credit card arbitrage, here’s a quick and dirty explanation of how it works: Remember those 0% balance transfer offers you receive in your mail box every day? Well, you accept the offer and park the money in a safe place and earn interest on it. Are you organized enough to make the monthly payments on time? This one is the most important requirement if you want to play this game.
Are you disciplined not to use the money for anything else? Even the best laid plans can go wrong. Do you have plans for taking any large loans in the near future? Will the “debt” bother you? Like this post? Clever Dude Personal Finance & Money. TreasurePicks. Calculated Risk. Zero Hedge. The Big Picture. Biiwii.com Technical Analysis & Commentary.