Colin was interviewed by the local media for a story on leasing versus buying a car. Basically, he says it is generally not a great financial move to lease a vehicle. It was a short interview.

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The general level of interest rates continues to surprise us. After beginning to move higher during the fall of last year, borrowing costs turned south again in December and have continued to fall. There were a couple of spikes in March and April, but the 10-year Treasury is back below 1.8% today. This suggests that there is still a tremendous reluctance on the part of many investors to put capital at risk. I don’t believe in trying to predict the future, but I am pretty confident that inflation is not dead. Sooner or later, we will be faced with a rising rate environment. Be prepared.

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One of the important issues of the upcoming presidential race will be the debate over tax policy.  It is quite possible that the amount of tax you pay, both as a percentage of income and as a percentage of your investment gains, will change over the next 12 months.

Both candidates are likely to spend a fair amount of time talking about the maximum tax rate on capital gains (currently 15%) as well as the rate on qualified dividends (also 15%). One side of the argument is that a low tax rate encourages investment and the efficient allocation of capital. The other side will argue that raising the tax (a little) will not hinder economic development and will make the tax system more equitable.  In other words, many of our wealthiest citizens receive the majority of their cash flow in the form of dividends and capital gains, which are currently taxed at a lower rate than most Americans pay against their wages.  Ultimately, it will be up to the voters to decide come November.

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What is the reward for being a diligent saver during one’s working years? It seems to me that the concept of delayed gratification is meaningless unless we stand a good chance of being able to enjoy the fruits of our labor and sacrifice at some point in the future. If we achieve the goal of financial independence, but are unable to enjoy that freedom, some might say we have labored in vain.

While I believe that work is a reward in and of itself, I also believe that maintaining good financial health should be combined with the goals of maintaining good mental and physical health, as well. While we can’t time our death any more accurately than we can time markets or interest rates, there are certainly time-tested methods to improve the odds of success. Just like investing, we should focus on that which we can control.

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I recently discovered this blog and found it fascinating (in a “Guinness World Records” sort of way).  The author is a 38-year-old Dane named Jacob Fisker who lives in the United States and has taken frugality and anti-consumerism to the extreme.  He claims to have achieved financial independence by the age of 30 and boldly states that he can help me (or you) retire in only five years–all we have to do is save 75% of our after-tax income.  Sounds crazy, but he’s written a book about his journey and provides extensive detail on his website as to how he was able to achieve this seemingly impossible goal.

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