Daily Investment Tips

From January 1, 2011,  more than 10,000 baby boomers a day are turning 65 and that will continue for the next 19 years.

Best age to start collecting social security benefits?

The answer is, the longer you wait, the larger your monthly check.

You are allowed to start collecting Social security retirement benefits at age 62. If you opt to collect early,  you will get a lower monthly amount. The full benefits are are paid out if you begin collecting at age 66. You can also delay and start collecting a larger monthly check at 70. After age 70 there is no advantage in delaying.

To make it clear check out this NYTime example of the difference it can make by delaying the age when you start collecting your social security :-

Take those who are set to receive $1,000 a month at their full retirement age. If they sign up for benefits at age 62, they will collect only $750. But if they wait until 70, they will earn extra credit and receive up to $1,320 a month — nearly a third more.

To know how much you can collect, use the Social Security benefits calculator, to get the full picture of your benefits under different circumstances and scenarios. You can calculate your payments at age 62, 66, 70, or for any year in between.

written by Constantine Njeru \\ tags: 19 Years, Advantage, Baby Boomers, Calculator, Circumstances, Extra Credit, January 1, Retirement Age, Scenarios, Security Retirement Benefits, Social Security, Social Security Benefits, Social Security Retirement

George Soros is known as “the Man Who Broke the Bank of England” after he made a reported $1 billion during the 1992 UK currency crisis. He bet against the British pound and won big.

I came across a quote by George Soros, that seems to give an easy answer as to how the famous speculator makes money in a turbulent world.

The financial markets generally are unpredictable. So that one has to have different scenarios… The idea that you can actually predict what’s going to happen contradicts my way of looking at the market.

George Soros

It is clear what George Soros does, He evaluates multiple scenarios and takes position in each scenario. As the market unfolds he lets profits run on the correct scenario and cuts losses on wrong scenarios. At a single time he might be long on a position but still take a short position on the same.

To play this scenario game you need to use risk management tools such as options, futures and short sales.  For this kind of trading to be successful an investor needs to have sufficient capital to buy those tools.

written by Constantine Njeru \\ tags: 1 Billion, Bank Of England, British Pound, Currency Crisis, Economic Predictions, Financial Markets, George Soros, Investor, Losses, Money, Options Futures, Profits, Quote, Risk Management Tools, Scenario Game, Scenarios, Short Position, Speculator, Turbulent World, Uk Currency

Most financial planners run computer programs called Monte Carlo simulations to judge the probability of portfolio returns under various scenarios.

According to Wikipedia article

Monte Carlo methods are used in finance and mathematical finance to value and analyze (complex) instruments, portfolios and investments by simulating the various sources of uncertainty affecting their value, and then determining their average value over the range of resultant outcomes

Monte Carlo Methods are used for personal financial planning. For instance, by simulating the overall market, the chances of a 401(k) allowing for retirement on a target income can be calculated. As appropriate, the worker in question can then take greater risks with the retirement portfolio or start saving more money.

The following video makes a demonstration of Monte Carlo Simulation: -

written by Constantine Njeru \\ tags: Computer Programs, Computer Simulations, Demonstration, Financial Planners, Investments, Mathematical Finance, Money, Monte Carlo Methods, Monte Carlo Simulation, Monte Carlo Simulations, Personal Financial Planning, Portfolio Returns, Portfolios, Probability, Retirement Portfolio, Scenarios, Stocks, Target, Uncertainty, Wikipedia