4 Fatal Financial Fantasies

4 Fatal Financial Fantasies

Investipedia has some sound advice about Financial Fantasies
Many of us have financial fantasies that help us to remain optimistic in the face of financial hardship. But while there's nothing wrong with dreaming, some fantasies do more harm than good, especially when they affect the way we behave. Why give up the dreams? Because expecting a windfall or a free ride to get you through life isn't going to make you successful - in fact, it will allow you to make excuses that can stand in the way of your financial freedom. Let's take a look at four common financial fantasies - you're better off forgetting about them, but we'll provide some realistic, actionable plans you can put in their place.

Common Financial Fantasies
1. I'll receive a large inheritance.
2. I'll win the lottery.
3. I'll start a website and make a killing off advertising.
4. I'll make a ton off an initial public offering (IPO).

Reality Check
1. I'll start my own business.
2. I'll finish college.
3. I'll make passive supplemental income through investments.
4. I'll buy a house.

Read it all on Investopedia.com

General Motors (GM) Indicator

(From Investopedia) The General Motors (GM) Indicator

What does it Mean? An indicator based on the theory that the performance of U.S. automaker General Motors (GM) is a pre-cursor to the performance of the U.S. economy and stock market. The GM Indicator relies on the assumption that when people are confident and making money one of the first things they would do is buy a new car.
Investopedia Says... There is still some talk behind this strategy as there is a correlation between auto sales and the overall economic standing of individuals. But this theory had more weight in the 1970s-80s when GM was by far the largest carmaker in North America. Since then GM's importance to the U.S. economy has declined due to greater competition.

During the financial crisis of 2007/2008, GM saw sales decline due to a decrease in demand for their "less" fuel efficient vehicles, and a decrease in available funds for financing due to credit restrictions. Their stock price dropped over 70% compared with a general market decline of around 30%. Although a correlation exists, the overall market and economy relies less on the performance of one automaker than it did in the 1970s.
During the financial crisis of 2007/2008, GM saw sales decline due to a decrease in demand for their "less" fuel efficient vehicles, and a decrease in available funds for financing due to credit restrictions. Their stock price dropped over 70% compared with a general market decline of around 30%. Although a correlation exists, the overall market and economy relies less on the performance of one automaker than it did in the 1970s.

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