The basics of retirement savings: why “saving” may not be enough

“Saving” is a funny word in this context. It may not mean what you think it does.

In my previous post, I hinted at why putting your money away in a checking account may not be a good way to save for retirement. Let’s compare this strategy with investing the money saved away. Consider this graph which I used for another post (“The power of compound interest”) a while ago:

10k increased 3% per year
Assuming 7% annual return

After 40 years, by investing your money, you will end up with 4 times the amount you contributed. 4 times. In other words, investing your retirement saving basically cuts the amount you need to save by 75%. Instead of saving 40k per year, now you only need to put away 10k per year.

Continue reading The basics of retirement savings: why “saving” may not be enough

The basics of retirement savings: why you need to start now

OK, let’s face this. I am in my 20’s. If you are reading my blog, you are probably in your mid-20’s as well. What’s up, retirement? Geez, why care about anything 40 years out?

Image
Which one is more like you?

Well, I’m an actuary, so I speak in terms of probability. What if I’m one of the (un)lucky few bastards that make it past 65 years old? Well, first off, I will most likely be out of jobs. And secondly, my health will not be cheap. Think more doctor visits, more ways to exercise, healthier food, higher health insurance premiums. And I may want to give something to my grandchildren if they choose to attend Harvard….

Where does the money come from?

Continue reading The basics of retirement savings: why you need to start now

AAMRQ-AAL final conversion formula and equity distribution plan explained

As you know, this summer I wrote two blog posts on the AMR Corporation and US Airways Group merger to explain how it affects AAMRQ stock price. Using the information available at that time I derived a formula to estimate AAMRQ stock price based on LCC stock price:

https://hiepsfinance.com/2013/05/14/the-impact-of-the-american-airlines-us-airways-merger-on-american-airlines-stock-a-curious-case-of-stock-piggy-backing/

https://hiepsfinance.com/2013/07/20/follow-up-on-aamrq-stock-price-analysis/

I know I mentioned that I would write more about the AAMRQ stock case if there was a huge surprise. And there was a huge surprise when the Department of Justice filed an antitrust lawsuit against AMR Corporation and US Airways Group, but this happened when I was entangled with a few life issues, so I had to skip.

Not to say that I am much less busy now, but I thought this case deserves another mention. Caution: math abound 😉

Continue reading AAMRQ-AAL final conversion formula and equity distribution plan explained

Hiep’s Finance ‘s final formula for AAMRQ-LCC conversion

I don’t have much time to comment much on this merger right now, so I will just go ahead and post what I consider to be the final AAMRQ conversion formula:

AAMRQ stakeholders officially receive 544.4 million AAL shares. Each AAL share is worth an LCC share. Using the approximate number of AAMRQ shares outstanding 335.5 million, and the approximate debt of $8 billion, the share conversion formula is:

Continue reading Hiep’s Finance ‘s final formula for AAMRQ-LCC conversion

Follow-up on AAMRQ stock price analysis

2 months ago, I posted an article explaining the driving force behind the stock price movement of AMR Corporation, the mother company of American Airlines, since the American Airlines – US Airways merger was announced in February, 2013.

https://hiepsfinance.com/2013/05/14/the-impact-of-the-american-airlines-us-airways-merger-on-american-airlines-stock-a-curious-case-of-stock-piggy-backing/

In light of the merger getting closer and closer and more detail being released, I wanted to write a quick follow-up on that popular post. Continue reading Follow-up on AAMRQ stock price analysis