Articles
When is $100 taxed as if it was $185?
The lesson for those still in the accumulation phase is to build your wealth and retirement nest egg in accounts and vehicles that are not taxable in retirement.
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Warning: Danger Ahead
As the dollar gains value, US goods and services become more expensive to world consumers – and sales decline. When sales decline, so do profits, and eventually, so do their stock prices.
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When the Best Becomes the Worst?
…if we implemented the absolute best asset allocation strategy starting in 1972 – and paid just 1% in management fees and 1.25% in mutual fund fees, the best asset allocation strategy would instantly turn into the worst.
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Twitchy
A remarkable thing happened in the week or two leading up to Christmas – and it’s worth noting for those of you with money exposed to the market.
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Everybody Has a Life Insurance Plan
I don’t blame you if you find the idea of combining a message about life insurance with a message about Christmas a bit – well – unseemly. But while our thoughts are focused on the blessings of family, I’m going to cross that line for a few minutes.
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Investing Truths to Live By
I recently ran across an article written by Morgan Housel – a columnist for the Motley Fool and the Wall Street Journal. These are some great nuggets – and worth passing on – edited only for brevity.
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Meet Ron Tussey – Fee Slayer
As I speak with groups, I’m continually amazed by 401k plan participants who will argue – often vociferously – that they pay nothing to participate in the company plan.
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Tax (In)Equality?
In a recent review of all things financial (my favorite pastime), I stumbled across this tidbit. More than one-half of all Americans pay no taxes on a net basis. In fact, the bottom three quintiles (the bottom 60%) have a net tax liability that is NEGATIVE.
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Good News – Bad News
Good news from the non-profit Society of Actuaries – you’re likely to live longer. Since “mortality” tables were last updated in 2000, the average 65-year old woman will now live 88.8 years (up from 86.4 in 2000); and men will live to 86.6 (up from 84.6 in 2000).
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Boglehead Wisdom
If Warren Buffet has a counterpart – it’s John Bogle, retired founder of the Vanguard family of mutual funds. Bogle has gathered a crowd of followers over the years who call themselves Bogleheads. The Bogleheads had their annual meeting a couple of weeks ago, and...
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Get Ready to Grab your Ankles
Over the past 5 years, I’ve informally polled audiences on their opinion of future tax rates. “Do you think tax rates when you retire will be higher or lower than they are today?” Everyone thinks future tax rates will be higher. We’re resolved to the reality that $17...
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The Dirty Harry Question
In one of the most famous scenes in movie history, Clint Eastwood’s legendary character - Dirty Harry - has caught up with his perp after a frenzied chase during which Harry Callahan had taken several shots and missed. Drawn down on his now cornered suspect, Dirty...
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Heads, I Win – Tails, You Lose
My last article talked about a research report showing that after deducting fees, expenses, and loads from mutual fund gains, the vast majority fail to outperform their benchmark index – meaning the unmanaged market often performs better than managed mutual funds. But...
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Flipping Coins
A recent S&P/Dow Jones Indices study came to the conclusion that those well-dressed, highly-compensated mutual fund managers (whom you and I are paying) – with all their research, glossy brochures, and inside access – aren’t all they’re cracked up to be. The study,...
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Pulp Fiction
“Pack the car mama – we’re gonna live on Easy Street.” That’s the refrain I hear as the stock market continues to defy gravity and set weekly records. Everyday folks are running to the mailbox to see how much richer they are this month than last. I hate to burst your...
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Do What the Wealthy Do
Many people ask my opinion about the Roth IRA. My short answer is that they’re the second best deal out there - so I’m a pretty big fan. But the Roth has its limitations. Many people don’t qualify because of income and other limitations. My experience (and probably...
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Beware the 529 College Savings Plan
It’s ‘back-to-school’ time – and even younger parents are thinking about how they’ll ever be able to pay for Junior’s college. Since many of our parents were able to pay for college – we naturally consider it a parental responsibility to do the same in return. The...
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There is NO Advantage to Tax Deferral
I’m struck by how many people are sucked into believing that tax-deferred accounts (401ks and the like) are better than after-tax accounts. News Flash: “there is no advantage to tax deferral.” Given a choice of investing $100 pre-tax, or its $70 after- tax equivalent...
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Back to School
Sending kids (back) to college can be a bit frightening for a whole bunch of Mom and Dad reasons. But one – often overlooked concern is financial literacy. Here are some conversation topics that could make for a real education. Credit Cards: Your kids will be...
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It’s All Relative
Those who follow me know that I’m not the biggest fan of Wall Street for the simple reason that the rules of their game are biased in their favor – and against the average investor. So when I ran across a recent article – authored by a Wall Street muckity-muck – I...
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Is it Time to Take Some Profits?
Stock market valuations are at all time highs. When the market will experience its next correction – or what the triggering event will be is anybody’s guess – but it is coming. Just look at the S&P 500 over the last 6 years: 2013 32.42% 2012 15.88% 2011 2.07%...
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A New Twist on Life Insurance
One of the most daunting risks faced by those over 60 is the cost of long-term-care. And hey - if you’re far from 60 – don’t skip this article – it includes you! Experts say 70% of us will need some form of long-term care – and not necessarily the “end-of-life” kind...
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Just What We Need – More Risk
Every decade or so – a new virus emerges that fear mongers hype as “the one” that will wipe out the human race. It never turns out to be quite as bad as projected of course – but it does make for sensational conversation. Well there is a virus of sorts that’s on the...
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The WMD’s of Investing
Participants in 401k plans often tell me they pay no fees in those plans. So – they conclude - all my rants about the impact of fees on wealth don’t apply to them. Oh, contraire! Most of those 401ks are chock full of mutual funds – and mutual funds may be the most...
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Meanwhile, as you speed toward retirement…
Our pre-retirement inattention to Medicare has left it a playground for politicians – and they’ve been having fun crafting surprises that lie in wait for you. There are four parts to Medicare (health insurance for retirees): We’ll skip...
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Advice to Throw Out the Window
Chances are – these are pieces of advice you’ve heard before – perhaps even from people who love you (i.e. parents). But you may want to re-think conventional wisdom – and here’s why. 1. It takes money to make money. This self-limiting belief crushes dreams, and...
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401k Guarantees?
As my colleagues and I inform people about a pathway to personal wealth and retirement income that blows the socks off of “Wall Street” plans – we find more people coming to the defense of their 401k (or it’s close cousins – the IRA, 403b, 457, SIMPLE, and SEP). It’s...
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House of Cards
There’s not a whole lot of disagreement that another bubble is going to burst soon. The only debate is what “soon” means. The catalyst that brings on the next round of financial calamity may turn out to be a close relative of the catalyst that brought on the last...
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What Your Kids think about Money and Investing
Millennials (those between 13 and 32) aren’t investing. It’s not because they don’t have the money. It’s not because they don’t have a strong saving instinct (on the frugality scale – they’re closer to the Greatest Generation). And it’s not that they’re not saving....
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The High Cost of Bank CDs
I recently built this chart for a series of speaking engagements I was asked to deliver. I used it to make a variety of different points – many of which I’ll share with you in the coming weeks. But for starters, I wanted to highlight some thoughts about investing fees...
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