vania-janet/multiturn-rag-retrieval-data huggingface dataset:
You are looking for the Internal Rate of Return. If you have a spreadsheet like Microsoft Excel you can simply put in a list of the transactions (every time money went in or out) and their dates, and the spreadsheet's XIRR function will calculate a percentage rate of return. Here's a simple example. Investment 1 was 100,000 which is now worth 104,930 so it's made about 5% per year. Investment 2 is much more complicated, money was going in and out, but the internal rate of return was 7% so money in that investment, on average, grew faster than money in the first investment.
Emergency funds are defined in terms of months of tightened-belt living -- that's according to the usual gurus such as Suze Orman, Dave Ramsey etc.   They aren't for short-term emergencies like a blown transmission.  Use other money for those.  Why?  People with bad financial habits have short-term emergencies all the time, and that emergency fund doesn't have a chance of lasting.  This is just their financial habits manifesting.  Here's what an emergency fund is for.    Scenario: big economic bubble bursts.  Stock market drops 50%.  Credit dries up.  This happened in 2007 by the way.  The dominoes start falling boom, boom, boom: I'm exaggerating a bit here, but a lot of people lived at least half this stuff in 2007-11.  Nothing starts those dominoes falling like lack of cash at a key moment.  That's what an emergency fund is all about - keeping things tight-normal for long enough to get back on your feet.  If you want to keep your emergency fund in something risky -- keep a lot more of it!
The biggest problem is that the rate of return for a completely immunized program is really low.  Especially, now, given the low rate of return, the cost of such a program makes it nearly unfeasible, unless you assumed a ridiculously low rate of return (&lt;1% return).  As it is, they're assuming a 4.5% rate of return, which is about 2% above inflation, a very very conservative forecast.    Plus, not every pension plan could immunize their plans.  All that does is shift interest rate risk (btw, not the only type of risk that exists, there's credit risk as well.  To get rid of both, you'd be getting marginally above 0% return, not something you can run a pension plan on).  So, you'd have to have someone or some set of people that have a very large and very unnatural interest rate risk.  If you had a large move in rates, it would demolish those people, which would completely invalidate those hedges.  It's much better for the economy on whole that pension plans are able to take credit and interest rate risk.
Indeed, there is conservation of money. If the insurance companies have those big buildings and television commercials and CEOs, then that money comes from only one place: the insurance premiums of customers. To say insurance is a good deal is either The benefit and cost of insurance for most: Indeed, of all the answers here, James Turner's is best. If you can't afford to lose something, it is vital to insure it. Ideally insurance would be a non-profit operation to best cover this. Such that people would as a whole lose nothing. Theoretically it could even be slightly for profit by making wise investment decisions, and benefiting from the future value of money by beating inflation. But they don't (see this writeup for slightly dated information on health, and this Wikipedia article for more direction). But even if you are taking an average loss (by using a profit-making insurance company), by taking insurance you avoid the situation where you're crippled by a catastrophe. You are paying a fee to hedge your losses. Like James said, insure what you cannot afford to lose. But realize you're going into a situation where the overall net is an average loss of between 10-50% of your money, on average. Basically you're playing the lottery, except your net losses mostly go to fund the company and the CEOs rather than nominally support education. But you sounded like you understood those ideas well, so... Can you self insure? As others noted, yes, there is the option of self insurance in most places. Even even often when insurance is considered as required. For example, in the US, basically car insurance coverage is required. But generally you are legally able to self insure to cover this requirement: The cost of self insuring: There is one cost to self-insure: time. It takes time to research the laws, time to to satisfy those requirements, and then time to find/setup all the care providers (doctors, mechanics, lawyers, etc). When is it worth it? First, again, you must satisfy the prerequisite: you are able to financially handle the loss of the topic under consideration.
"First, a clarification. No assets are immune to inflation, apart from inflation-indexed securities like TIPS or inflation-indexed gilts (well, if held to maturity, these are at least close). Inflation causes a decline in the future purchasing power of a given dollar1 amount, and it certainly doesn't just affect government bonds, either. Regardless of whether you hold equity, bonds, derivatives, etc., the real value of those assets is declining because of inflation, all else being equal. For example, if I invest $100 in an asset that pays a 10% rate of return over the next year, and I sell my entire position at the end of the year, I have $110 in nominal terms. Inflation affects the real value of this asset regardless of its asset class because those $110 aren't worth as much in a year as they are today, assuming inflation is positive. An easy way to incorporate inflation into your calculations of rate of return is to simply subtract the rate of inflation from your rate of return. Using the previous example with inflation of 3%, you could estimate that although the nominal value of your investment at the end of one year is $110, the real value is $100*(1 + 10% - 3%) = $107. In other words, you only gained $7 of purchasing power, even though you gained $10 in nominal terms. This back-of-the-envelope calculation works for securities that don't pay fixed returns as well. Consider an example retirement portfolio. Say I make a one-time investment of $50,000 today in a portfolio that pays, on average, 8% annually. I plan to retire in 30 years, without making any further contributions (yes, this is an over-simplified example). I calculate that my portfolio will have a value of 50000 * (1 + 0.08)^30, or $503,132. That looks like a nice amount, but how much is it really worth? I don't care how many dollars I have; I care about what I can buy with those dollars.
&gt; I've done the math - I had to, as I received a bay area offer.  [Oh really?](https://smartasset.com/mortgage/what-is-the-cost-of-living-in-san-francisco). In san fran,  * Housing prices are 3-3.5x  * Rent prices lead the nation, 30% more expensive than the closest city (New York!). [This is across the board, and roughly 2-3x the national average](https://www.apartmentlist.com/rentonomics/national-rent-data/).  In fact, the average rent for a 2 bedroom in san fran exceeds the median salary, nation wide.   * Downtown parking is [2-3x the national average](http://cityobservatory.org/the-price-of-parking/), and second only to places like New York.   * Gas is 38% higher in san fran over the national average.   * Basic food staples, like eggs and cheese and meats are 30-70% more expensive.   * It has the highest patient costs for routine doctor visits compared to anywhere else in the country.   You're spreading uninformed propaganda.  If anything, it's worse than I mentioned above.  Since costs range between 30 and 300% of the national average, the higher % for the large chunks of a family's pay check.   &gt; It's only housing, which is not a big enough of a expense to come even close to your outlandish claim.  HAHAHA.  That's a good one.  It's almost like housing [isn't the largest expense for most of this country](http://money.cnn.com/2016/06/22/real_estate/rent-affordability-housing-harvard/index.html).  What? Are you sharing a one bedroom with 5 other people?   Rent alone will cost you 30-50% of a 120k salary, after taxes.   &gt; I'm tired of people who have no cold hard facts  I see 0 cold, hard facts in your parroting post. Maybe you should try taking your own advice, and redoing that math before you start bitching about other people not doing what you yourself haven't done.
"To answer the investment aspect takes a bit of math. First, solar insolation numbers: This represents the average sun-hours per day for a given area. You can see the range from 4 to 6, or 1460 hrs to about 2190 hrs of sun per year depending on location. I believe electricity also has a range of cost, but 15 cents per KWH is a good average. So, a 1KW panel will produce as much as $328 per year of electricity in a high sun-hrs area, but only $219 in a lower sun-hrs area. If we agree to ignore the government subsidies and look for the stable price unaffected by outside influence, an installed price of even $2500 would produce a return of 13% and a reasonable full payback over an 8 year period. I call this installed price a tipping point, the price where this purchase provides a decent return. Some would accept a lower return, and therefore a higher price. As duff points out, this should be treated as the post rebate/tax credit price. Those help to push the price below this point. At the price point where the energy cost per panel is below, the government intervention may be unnecessary. The power companies may find consumer owned panels are the cheapest way to clip the peak consumption which tends to be the most expensive power demand.) One can take the insolation numbers and cost of local power to produce a grid showing the return for a 1KW panel in $$/year. (At this point the cost of money kick in. The present value of $100/yr is far higher today than if short term rates were say, 8%) Once panels drop to where they are compelling for the higher return areas, I'd expect volume to drive continued improvements in cost and better economies of scale. Initially, the need for storage isn't there, as the infrastructure is in place to drive your meter backwards if you produce more than you use. The peek sun coincides with peek demand and the electric companies are happy to have your demand go negative during those times. Update - the conversation with Duff led me to research 'demand charge' a bit more.
Generally speaking.  1. Take the position size / average daily volume.  2. Multiply that number by 10 or whatever 1/whatever % of volume you think you can execute, ( you can at best acct for 10 percent of traded volume on a day).  3. You now have days until liquidation (x)  4. Take the days until liquidation sample the return over  time x. I.e. if days until liquidation is 10, you would sample 10 day returns.  5. Calculate the distribution characteristics of this window (mean, var, skew, kurt) and calculate VaR based on some confidence.  You can now have a liquidity risk expected loss and a VaR.  If position is on margin don't forget to add the interest cost.  Note: Instead of taking 10 day return, you can take the 10 day VWAP and calculate return between Open and 10 day vwap.
Agreed with the CEO that it is cases like this, encouraging people to live beyond their means, that popped the housing bubble.   But we can't mention that without also mentioning the, what? Maybe thirty-year drunkenly-stupid profits people were making off the underlying financial tool of packaging sub-prime mortgages together and selling them as securities, and the eventual concomitant derivatives of that foundational, and ultimately; bubble-causing tool.   I'd say it was a good model to all the hundreds of thousand of people that profited from it, and the thousands who each individually made hundreds of millions of dollars, and the many people that got out of the bubble on the way down.   That being said, and the obvious connotation that from their perspective long-running bubbles, like the specific one mentioned, are in aggregate good for the institutions that use them; then, simply using tools that cause bubbles to burst, isn't in itself bad, and is usually good, for the reasons I stated; on average.   The insidiousness that it's also a blog? Wow, very sophiaticated, almost machine-learning sophisticated. I really like this piece from that perspective. I mean, doctor OZ is a sophisticated infomercial, but this is possibly better (nah doctor OZ is a better con).   I'm going have to look up the criticism by those two newspaper heads you mentioned. And, yes good publicity, from multiple angles. This is a sophisticated weighted-algorithm... thing.   Finally, you know the negative connotations of this thing also work to it's benefit. It's a formula I've studied in mass-marketing, where you can rely on the law of large numbers; the things that are slightly grotesque increase efficacy. Once you see it you might well be horrified, like when you study Zombardo, Milgram, or Asch. The human in all it's magnificent grotesqueness.   The archetypal example; Walt Disneys Mickey Mouse. Seth McFarland ilucidated this fact when he literally pulled the gloves off a similar cartoon-mouse like character.   I saw it on a box of fruity pebbles too, it was in Barney Flinstones eyes.
"Scenario 1: Assume that you plan to keep the parking space for the rest of your life and collect the income from the rental. You say these spaces rent for $250 per month and there are fees of $1400 per year. Are there any other costs? Like would you be responsible for the cost of repaving at some point? But assuming that's covered in the $1400, the net profit is 250 x 12 - 1400 = $1600 per year. So now the question becomes, what other things could you invest your money in, and what sort of returns do those give? If, say, you have investments in the stock market that are generating a 10% annual return and you expect that rate of return to continue indefinitely, than if you pay a price that gives you a return of less than 10%, i.e. if you pay more than $16,000, then you would be better off to put the money in the stock market. That is, you should calculate the fair price ""backwards"": What return on investment is acceptable, and then what price would I have to pay to get that ROI? Oh, you should also consider what the ""occupancy rate"" on such parking spaces is. Is there enough demand that you can realistically expect to have it rented out 100% of the time? When one renter leaves, how long does it take to find another? And do you have any information on how often renters fail to pay the rent? I own a house that I rent out and I had two tenants in a row who failed to pay the rent, and the legal process to get them evicted takes months. I don't know what it takes to ""evict"" someone from a parking space. Scenario 2: You expect to collect rent on this space for some period of time, and then someday sell it. In that case, there's an additional piece of information you need: How much can you expect to get for this property when you sell it? This is almost surely highly speculative. But you could certainly look at past pricing trends.
Some of these expenses are more or less fixed: rent, utility bills, etc. Write those down first. Some of the expenses you have more control over, such as food and entertainment. Give yourself some money to spend on each of these. You may also have some larger expenses that will happen in the future, such as a tuition or insurance payment. Allocate some money to those, so that by the time that payment comes around, you will have saved enough to pay for those expenses. If you find that you don't have enough income to cover all of your expenses in a month, you need to either reduce your expenses somewhere or increase your income until your budget is at a point where you have money left over at the end of each month. After you've gotten to this point, the next step is figuring out what to do with that extra money left over. This is where your goals come into play. If you have debt, I recommend that one of your first goals is to eliminate that debt as fast as possible. If you have no money saved, you should make one of your goals saving some money as an emergency fund. See the question Oversimplify it for me: the correct order of investing for some ideas on what order you should place your goals. Doing the budget and tracking all of your spending on paper is possible, but many people find that using the right software to help you do this is much easier. I have written before on choosing budgeting software. All of the budgeting software packages I mentioned in that post are from the U.S., but many of them can successfully be used in Europe. YNAB, the program I use, even has an unofficial German users community that you might find useful. One of the things that budgeting software will help you with is the process of reconciling your bank statements. This is where you go through the bank statement each month and compare it to your own record of spending transactions in your budget. If there are any transactions that appear in the statement that you don't have recorded, you need to figure out why. Either it is an expense that you forgot to record, or it is a charge that you did not make. Record it if it is legitimate, or dispute the expense if it is fraudulent.
The risk-reward relation depends on what you are changing. In the most cases people ask about, it is not linear but I will give examples of both. Nonlinear case 1:  As you diversify your portfolio, the firm-specific risks of various stocks cancel each other out without necessarily affecting the expected return of the portfolio.  Reduction in risk without any loss in returns--very nonlinear.  Nonlinear case 2: If you are changing the weights in your portfolio to move along the efficient frontier, then you the risk-reward relation is a hyperbola, which is nonlinear. Nonlinear case 3: If you are changing the weights in your portfolio to move away from the efficient frontier, then you increase risk without adding a fully compensatory amount of return.  There could be many paths along the risk-reward plane, but generally it will not be linear in the sense that it will not be on the same line as your initial, efficient, portfolio and your savings account. Linear case 1: The most common sense in which we think of the risk-reward relation being linear is when the thing you are changing is the size of your investment.  If you take money out of savings to put in your fully diversified portfolio without changing the relative weights, your expected returns will increase linearly. Linear case 2: If you believe the CAPM, then the expected return of an asset stock is linearly proportional to the market risk of the firm.  If you could change the market risk of a single asset without changing anything else, then you would linearly change its expected return. The general rule about the risk/reward relation is this: If you are changing the size of your investment, the relation is linear.  If you are changing its composition, the relation is nonlinear
On the face of it, it doesn't look like a very good deal - neither pension not annuity company are in it for the fun of it, so they'll take their cut from your money, and then invest it anyway. The rest depends on what they promise you - if they just promise you market returns then I don't see much sense to do it, you can do it yourself. If they promise you some pre-defined average return not depending on market conditions (and hope to get ahead by actually getting better return and pocket the difference) then it might make sense, if you are not a very proficient investor. This will get you a known benefit you can count on (at least if you get a company with good rating/insurance/etc.) without worrying about markets volatility and having to keep the discipline and calm when markets jump around. It may be hard, especially for somebody of advanced age.  Also, there's the part of government adding money - it depends on how much of it is added, is it enough to cover the extra fees?
"I've been taking all the cheap fixed-rate debt banks would like to give me lately. What Rate? In practice I find the only way I get a low-enough rate on a longish-term fixed-rate loan is to use collateral. That is, auto loans and home loans. I haven't seen any personal loans with a low enough fixed rate. (Student loans may be cheap enough if they're subsidized, I guess.) Here's how I think of the rate: If you look at https://personal.vanguard.com/us/insights/saving-investing/model-portfolio-allocations , the average annual return on 80% bonds / 20% stocks is 6.7%, with worst year -10.3%. That's a nominal return not a real return. If you subtract taxes, say your marginal rate (the rate you pay on your last dollar of income) is 28% federal plus 5% state, then if you have no tax deferral the 6.7% becomes about a 4.5% average, with reasonably wide variation year-by-year. (You can mess with this, e.g. using tax-exempt bonds and tax-efficient stock funds, etc. which would be wise, but for deciding whether to take out debt, getting too detailed is false precision. The 6.7% number is only an average to begin with, not a guarantee.) Say you pay 4.5% on a loan, and you keep your money in very conservative investments, that's probably at least going to break even if you give it some years. It certainly can and sometimes will fail to break even over some time periods, but the risk of outright catastrophe is low. If your annual loss is 10%, that sucks, but it should not ruin your life. In practice, I got a home loan for close to 4.5% which is tax-deductible so a lower effective rate, and got an auto loan subsidized by the manufacturer for under 3%. Both are long-term fixed-rate loans with collateral. So I was happy to borrow this money paying about a 3% effective rate in both cases, well below my rough threshold of 4.5%.
What is the average daily volume traded? It looks like this stock may have a liquidity problem. If that is the case I would not buy this stock at all as you may have the same problem when you try to sell it. Generally try to stay away from illiquid stocks, if your order size is more than 10% of the average daily volume traded, then don't buy it.  I usually stay away from stocks with an average daily volume of less than 100,000.
The site you link to suggests the majority save on this plan. AC is tough, but most other power hogs are in your control, washer/drier, dish washer, etc. This is part of a bigger picture of power transmission, and management. The utility cost is the highest for peak demand, i.e. they need to have capacity for the peak use, but only selling average use, on average. This billing plan matches what you pay with the true cost, and you save by avoiding the peak times.