Articles
7 Reasons to Re-Think the Company 401k Plan
I have to admit - the allure of tax-qualified plans like 401ks, IRAs, SEPs, 403bs, Keoghs, and others - is compelling. · There’s the ability to contribute pre-tax dollars · There’s the tax-deferred buildup · And some such plans benefit from...
Remember the Little Red Hen?
The Little Red Hen wanted to bake some bread. So she asked her friends to “partner” with her by helping harvest the wheat, grind it into flour, and bake the bread. None agreed. But when she went looking for “partners” to help her eat the bread - well - you know...
Hope to Retire? Better Get Started Now!
As the father of 23 and 26 year olds - and supposed money & investing professional, the idea of when to start saving and how aggressively to save has taken center stage among my fatherly duties. Both of my kids (knock on wood) are out of college, gainfully...
The Wolf of Wall Street
The Wolf of Wall Street - starring Leonardo DiCaprio - glamorizes crooked Wall Streeters who figure out the latest way to scam an unsuspecting public. The film has drawn fire from both sides of Wall Street - including the Motley Fool - whose commentary I generally...
Einstein’s Ninth Wonder of the World
Einstein was a pretty smart guy. And while Einstein didn’t invent the “Rule of 72” (it was first advanced by Luca Pacioli in 1494), he is credited with declaring it the “ninth wonder of the world.” What is the Rule of 72 - and why is it so important? The rule of 72...
Good Debt – Bad Debt
Certain “financial advisors” - who are little more than media-made celebrities - declare that debt is bad and must be purged. They have names that rhyme with Rave Damsey, Floozie Orsman, and Spark Coward. There is partial truth in their words - but the whole truth is...
New Math: When is 5% Equal to 12.6%?
Here’s a funny little mathematical fact that turns out to be not-so-funny. If we lose 5% on a $1,000 investment, we’ve lost $50. Probably happens more often than we care to admit. After all - we have to break few eggs to make an omelet - right? And what’s the big...
Is Dave Ramsey Wrong?
Would You Pay Your Investment Advisor $1,000,000?
It sounds like a silly question – but the shocking truth is that hundreds of thousands of people will do just that over their lifetime. Could you be among them? Consider this – an investor who saves just $1,000/month from age 25 to 70 – stops - then draws income for...
Tiny… and not so Tiny… Bubbles
Law of physics: bubbles eventually burst. Law of economics - bubbles eventually burst. Especially those that are “helped along” by bad government policy. The bubble I’m referring to - is the stock market; and the bad government policy is the money-printing madness...
Are Fonzie and Fred Right?
Chances are, you’ve seen Henry Winkler (aka Fonzie) and Fred Thompson on TV lately. Are the reverse mortgages they’re hocking snake oil, or smart moves? First, let’s understand what a reverse mortgage is. A bank is making you a loan, and sending you the money. The...
Scratch your “Giving” itch – without Giving up Income or Net Worth
Most of us have a generous streak. We realize there’s more to life than “stuff.” But giving - by definition - means giving up income, assets, or net worth. That makes giving a tough decision. We don’t know what life has in store for us, and if those unknowns...
The Greatest Fear of Seniors
Next to outliving their income, seniors’ greatest fear is the cost of long-term care. Statistically, 50% will require some form of long-term-care, and the average cost in most parts of the country averages $60,000/year and is on the rise. They tend to deal with this...
Achieving Gains is One Thing-Capturing them is Another
Great news! The market has run up - and so is your account. But a gain is not a gain until it’s in cash - in your account. Selling a position that is up is the only way to capture that gain. And capturing gains presents several challenges: Timing: When do you...
What Money Wants
How did you select your financial advisor? Was he/she a friend - a relative - a referral? Did you find them from the phonebook or their advertising? When people select me - or any of my hundreds of affiliates across the country - they do so for a specific set of...
Would you pay $9,704 in fees to deposit $500? You might have done so already
Guy walks into a broker’s office, “I’d like to invest this $500.” Gets lost. Returns to 40 years later. Broker hands him his statement: Good news - his $500 is now worth $11,206. Bad news - The total of fees and commissions for those 40 years is $2,180. Worse news...
Dealing with those Dreaded RMDs (Required Minimum Distributions)
When my Dad hit age 70-1/2, the government forced him to take money out of his IRA and pay tax on it. He didn’t need the money for lifestyle purposes, so the forced tax didn’t sit well. Required Minimum Distributions (RMD’s) - force roughly 4% of his IRA balance to...
Will you Pay My Investing Fees and Commissions too – Please?
Still drinking the qualified plan Kool-Aid? Qualified plans are better known by their everyday names; 401ks, 403bs, IRAs, Keoghs, and a few others. They seem like good deals. Contribute pre-tax dollars; defer taxes on gains; and heck, some employers give away free...
Be Careful What You Wish For
When we became parents, I ran out and bought life insurance. It was the only way I could ensure that the job of financially protecting my family would be completed if I wasn’t here to do it myself. Now that the kids are out of college and my financial fear has turned...
$17 Trillion National Debt – Chump Change
$17,000,000,000,000 - is a big number. Yet that’s our national debt - and it’s growing by nearly 1 trillion each year. Every sale in every Walmart store for an entire year adds up to $469 billion - making it the largest company in the world. Yet Walmart will have to...
The Financial Risk Nobody Ever Talks About
The older I get - the smarter my Dad seems. He always told me to save as much as I could in the company plan; and pay off my house as quickly as I can. The first seems like great wealth-building advice - the other great debt-elimination advice. But both ignore a...
Why Annuities Get a Bum Rap
Have you heard horror stories about annuities? Relax. They don’t have to be scary. In fact, they can be downright invaluable in the right situation. At their core, an annuity is an exchange of money for a guaranteed payout. The simplest form is called a SPIA - a...
According to the Wall Street Journal – The Best Investment Right Now May Simply Be Cash….Not!
http://online.wsj.com/article/SB10001424127887324328904578624031829252000.html This link - to a recent Wall Street Journal article, suggests that investors might want to consider parking their money in cash. Their rationale emphasizes that right now - stock prices...
$17 Trillion National Debt – Chump Change
$17,000,000,000,000 - is a big number. Yet that’s our national debt - and it’s growing by nearly 1 trillion each year. Every sale in every Walmart store for an entire year adds up to $469 billion - making it the largest company in the world. Yet Walmart will have to...
Throw Out the Old 4% Rule – It’s Yesterday’s News
“How much money do I need to retire comfortably?” That’s a question every adviser dreads hearing - because the answer is difficult. The easy route used to suggest that you could draw 4% of your nest egg in retirement, and never run out of money. So - just multiply...
What’s More Costly to Your Portfolio – Lifetime Taxes, or Lifetime Fees & Commissions?
When we build wealth the Wall Street way, we drag two boat anchors for our entire investing lifetime. Their names are taxes - and fees/commissions. Both take a toll on our account, but only one gets the attention. Accountants, CPAs, and law firms exist largely to...
Can We “Manage” Social Security Like We Do Other Assets?
Think you’re too young to be thinking about Social Security Benefits? Wrong - your Social Security benefit is one of your most valuable financial assets, and it must be managed. Get it wrong - and you can cost yourself well over $100,000 in lifetime benefits. Here...
Objects in the Rearview Mirror are Larger than They Appear
You know tax rates in the future are likely to be much higher than they are today. Yet even with that head knowledge, many of us are doing the exact opposite of what we should be doing to minimize their impact, by saving money in tax-qualified plans like IRAs, 401ks...
The Problem With Wall Street
When markets climb into record territory, Wall Street-types start talking up risk management strategies. Here are three - and why they’re suspect: Dollar-Cost-Averaging - buying a position bits at a time, to “average” the overall cost basis of the security. ...
So You Want to be a Millionaire?
Who doesn’t? Everybody dreams of fine things and a comfortable retirement. It just takes money. But building wealth today – and far into the foreseeable future, will require a different skill set, and different strategies than those that served our parents over the...
