October 16, 2012

Today we got assigned a new project. My group consists of Tamara, Charles, and I. We could choose from opening an investment account, the tulip bulb craze, the dot com bubble, the US housing bubble, and the south sea bubble. We chose to do the US Housing Bubble project. We have to find the causes, history, the psychological effect, and how we can prevent it in the future. So far we have found the causes which also kind of relate to the history. Some of the causes were that too many people with too little money were owning lots of homes, mortgage fraud, people were invested in high price real estate, there were bad money lending practices going on, and the interest rate was low. So basically, loans were being given out way too freely to people without enough money to buy homes, so people were in debt. People were also rushing out to buy lots of homes, especially high priced ones which weren't very good investments. The home ownership increased from 64% in 1994 to 69.2% in 2004. I think we still need to research more so that we can get more facts and go more in depth into the causes. We also need to get the psychological effect on people, and how to prevent it in the future.

We also discussed opening an investment account with Vanguard and Mr. Hallam mentioned that you could open one by investing $1000. I was curious to see if my parents would actually give me the money to start investing right now so I asked my father.  He said that he thought that it's better than spending it on other things. Then he told me to wait a minute while he did a bit of research and then he told me that it would be a good idea. He said that they had many different investment options available, and that if I wanted to open one I would have to do all the research on my own and he would only help me if it was absolutely necessary so that I could learn to do things myself. Also, he thinks it's a good idea because it will save money that I can use in the future after I graduate from college and it will help me learn more about investing and saving my money. I would also be able to use that money later on to pay for a house or at least a down payment.

I think this fall break I will probably spend more money than I usually do because I will be spending all of it here in Singapore, so I will be going out with my friends a lot. Also, I'm getting the new iPhone during the break, so that will be another expense. This week I spent quite a bit because I bought a Polaroid camera for $180 and a birthday present for my friend which was $52.