Last week, I wrote about how I was able to buy a new set of clothes without breaking the bank. In the process, I realized something else too. It turns out that putting together a wardrobe is a very similar to putting together an investment portfolio. Here are some lessons I learned and how they apply to investing: Continue reading “How Buying Clothing is Like Investing”
Over the last couple of weeks, I’ve written about the advantages of investing in individual stocks and some tools to make the process simpler and easier. However, most people don’t invest directly in individual stocks. After all, it’s more time consuming and is generally not available in the employer-sponsored plans like 401(k)s that people generally do the bulk of their investing in. Continue reading “How to Invest in Mutual Funds”
Back in college in the late 90’s, I learned a valuable lesson about managing risk when I got caught up investing in the dot com bubble. It was so easy to put up two thousand dollars and see it double or triple overnight. But the bubble burst a few years later and I was left with less money in my account than when I started. I cashed out of day trading, fortunately realizing before I had lost too much that this was not a viable long term strategy. Continue reading “The Risk of Not Taking Risk”
I have four children, two of which have custodial accounts. By definition, those custodial accounts belong to my children, and when they reach the age of majority—18 in most states—they technically can take that money and use it for whatever their hearts desire. Until then, I’m the custodian of the account, and as the custodian, it is my responsibility to make sure the money is managed properly. Not only does that mean making sure the assets are invested wisely, but also making sure that any taxes associated with the account are reported accurately. Continue reading “Junior’s Investment Income May Be Taxable”
Yes, I’ll admit it. It’s embarrassing and I’m not proud of it but I will confess that I have spent hours playing Candy Crush Saga on my phone. Mostly at airports or on rental car shuttle busses, but I have played the game for more hours than I am proud to admit. Continue reading “My Embarassing Confession”
Every time I’ve talked with someone about their investment portfolio recently, the subject of owning bonds or bond funds has inevitably come up. Most of the time, the conversations about the fixed income (bond) portion of their accounts has been less than hopeful. And the cynicism/pessimism hasn’t been coming from me… Continue reading “What’s All the Fuss About Bonds Being a Lousy Investment?”
Over the last few weeks, I’ve been writing about investing in rental real estate. I’m going to conclude this series with a final argument in favor of real estate investing and that’s how it’s likely to be affected by four different economic environments relative to other investments and the opportunities each situation presents to real estate investors. Here are the four different scenarios: Continue reading “How Real Estate Investors Can Take Advantage Of Any Economic Scenario”
Last week, I discussed some of the advantages of investing in direct real estate for retirement. Of course, there are downsides to it too. Here are some of the challenges would-be real estate investors will face:
Continue reading “The Challenges of Real Estate Investing”
I recently got a question in one of my retirement workshops about investing in rental properties for retirement. This can be a great idea for some investors. In fact, I just closed on my own first investment property. Here are some of the unique benefits to supplementing your other retirement investments with direct real estate: Continue reading “Why I’m Investing in Real Estate”
One of the most common questions I get asked is how to divide your money between different types of investments. You’ve probably heard that 90% of investment returns can be explained by your asset allocation or how you divide your money between stocks, bonds, and cash. The problem is that asset allocation guidelines can vary dramatically based on where you look. So how do you decide? Continue reading “The 5 Things That Really Matter When It Comes to Investing”
During a recent series of retirement workshops geared toward early and mid-career employees, I received numerous questions regarding the role of target date funds in their 401(k). This brought up an interesting discussion about hands-on vs. hands-off investing options. Target-date funds are supposed to provide simple solutions for people seeking an all-in-one fund that is diversified. Yet, a tremendous amount of confusion surrounds these seemingly basic asset allocation tools. Furthermore, not all target date funds are created equal so it’s essential to first look under the hood if target date funds are a part of your investment plan for retirement. Continue reading “Understand the Facts About Target-Date Funds”
In one of the cooler things I’ve read lately, law enforcement authorities conducted a sting operation to nab a world infamous pirate. They had to draw him to them since they had very little chance of getting past his protectors. So, they created a fake premise of asking him to be an adviser to a movie about Somali pirates. He took the bait, went to them and was arrested. I’m guessing he is regretting that choice! Continue reading “Don’t Believe Everything You’re Told…”
Back in October, I took a fun little road trip with my dad and my son to Atlanta to see some postseason baseball action. I love baseball and have been a Braves fan since childhood, enduring many peaks and valleys. Although I try to see at least a couple of games in person each year, this game was special since it was the first playoff game my father and my 4-year old son had ever seen. (My father had also overcome some serious health issues over the past year so it was a blast doing the tomahawk chop together and trying to catch batting practice home runs.) Continue reading “Millennials’ Retirement: Create a Sense of Urgency Today”
Emergency funds are the Rodney Dangerfield of financial planning: they get no respect. While financial experts typically recommend keeping at least 3-6 and sometimes even as much as 9-12 months’ worth of necessary expenses in cash reserves for emergencies, no one really likes seeing all that money sitting somewhere earning less than 1%. Here are some ways to make that emergency money work harder for you: Continue reading “How to Make Your Emergency Fund Work Harder for You”
As financial educators, it is important for us to solicit feedback from end users so that we know if our education is making a positive difference in the lives of those that receive it. It is also important to report this information back to our clients, so that they can make adjustments to their programs based on the feedback we receive. Since our education is sometimes delivered through live workshops, we often have stacks of evaluations that must be mailed back to our home office in El Segundo, CA. Continue reading “SPEND MORE now to SAVE MORE later”
With interest rates and home prices still low but rising and economic recovery and/or higher inflation possibly on the horizon, the prospects for real estate are looking pretty good. But it’s not an area that I’m as familiar with as other types of investments so I’ve been talking to a lot of people and doing my own research to better understand real estate investing. Here are some common misconceptions I’ve found that could be inhibiting people’s success in this area: Continue reading “5 Myths About Real Estate Investing”
A couple of weeks ago, my colleague Linda Robertson wrote a blog post about annuities, in which she described how happy her father was about a variable annuity that she sold him when she was a financial advisor. That may sound a bit puzzling since variable annuities have gotten a lot of bad press due to their high fees. But for those fees, you’re basically buying some form of insurance, which is why they’re sold by insurance companies. Here are some situations in which an annuity might actually make sense for you depending on what you’re looking to insure: Continue reading “Are Annuities a Good Deal or a Rip-Off?”
Although I haven’t sold insurance or investments for almost a decade in my role as a financial educator, my happiest client from those days is my dad, who purchased a deferred variable annuity from me. There is quite a bit of negative press about the high fees and long surrender charges with some annuities, but what makes my dad a satisfied investor are the safety nets provided from the benefits riders that can amount to an alphabet soup of abbreviations. So what is an annuity, and how does it help my dad sleep at night without worrying about his money? Continue reading “ABCs of Annuities”
For many people, reducing their risk is their top investment priority. Yet, in I’ve noticed that the word “risk” means very different things to different people. The standard definition in the financial world is the variance of returns. In other words, a risky investment is one in which the returns fluctuate a lot from year to year. But when most people use the word “risk,” I think they’re referring to the probability of their investment losing value. Continue reading “What is Risk?”
Many financial planners (this writer included) have resorted to the cup of coffee example at least once during their careers. It usually starts with a simple question such as “how much does a cup of coffee cost these days?” The answers depend on individual tastes and how many fancy iterations of a coffee or latte people can come up with (typically $3 to $5). Continue reading “Small Changes Can Have Big Consequences”
