Investing
Fees are the only part of an investment return you can predict
Nobody knows what markets will do. Everybody knows what a one per cent annual charge does over thirty years.
Odhran Kelly
Housing writer, Finance Ridge
Odhran writes about mortgages, rent and the running costs of a building.
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15 articles
Investing
Risk tolerance is not a personality test
How much risk you should take depends on your time horizon and your capacity to absorb loss. How much you feel comfortable with is…
Investing
Compound interest is not magic, but the time axis is
The famous curve is not about the rate. It is about how many years you leave it, and the last decade does most of the work.
Saving
Sinking funds are the reason some households never have an emergency
Most financial emergencies are not emergencies. They are known costs that nobody set money aside for.
Saving
For the first decade, how much you save beats what it earns
Rate comparison is where savers spend their attention, and contribution rate is where the outcome is actually decided.
Saving
Laddering fixed-term savings gives you rate and access at once
Splitting a lump sum across staggered maturities buys longer-term rates while keeping money coming free at regular intervals.
Investing
Bond prices move against interest rates, and the reason is arithmetic
The most confusing thing about bonds becomes obvious once you see that the payment is fixed and the price is not.
Investing
Diversification is about correlation, not about the number of holdings
Owning thirty things that all fall together is not diversified, and owning five that behave differently might be.
Investing
A fall of half needs a gain of double to get back
Percentage losses and percentage gains are not symmetrical, and the asymmetry gets worse the larger the fall.
Investing
Currency exposure is a decision you make by ignoring it
Investing outside your own currency adds a second variable, and most people acquire it without noticing they chose.
Saving
Where the emergency fund sits is a separate question from how big it is
A fund you cannot reach in time is not an emergency fund. Access, not the rate, decides where it belongs.
Saving
A switching bonus pays once and the rate pays every month
Cash incentives to move an account are real money. They are also the smallest part of the decision if the balance is large.
Investing
Accumulation and income units are the same fund with different plumbing
One reinvests what the holdings pay out and one hands it to you. The choice affects tax, records and what the price means.
Investing
Volatility measures movement, not the chance of losing money
The most quoted risk statistic describes how much prices wobble. That is related to risk without being the same thing.
Investing
What actually happens to your portfolio if the platform goes under
Investment failures and administrative failures are different events. Knowing which protections cover which is worth an hour.