3 Important Things To Do When Moving To A New City

October 18, 2017

My family and friends know that I am committed to checking experiences off of my Bucket List. And recently I completed another one – I moved to Florida. After living all my life in the cold and snowy Midwest, I wanted to wake up every morning to palm trees, warm breezes and water. I have the opportunity to work remotely and figured now was as good a time as any, especially now that I’m an empty-nester.

It wasn’t easy to move away from loved ones and established routines but my adventurous spirit won out. Now that I’ve unpacked most of my boxes (what to do with all my coats and turtleneck sweaters?), I can focus on getting settled. Here are the top three things I am focusing on now:

Expand my social network

I have moved to a new city eight times in my adult life! It was a lot easier to find new friends and get involved when our daughters were young because I enjoyed being active in their school and their various after school activities. Now that my daughters are living on their own in Columbus, Ohio, I find it’s harder to meet people in my stage of life.

I found Meetup.com and my neighborhood pool to be lifesavers but this article suggests other ways to break the ice in a new community. It can be a bit intimidating to show up and mingle with a group of strangers, however I’ve found most people to be very welcoming. The key is to push your comfort zone and be open to new opportunities. You will find that most people you meet have more in common with you than not.

Transfer my medical records to my new doctors

I have a chronic health condition that requires treatment by medical specialists. I had a wonderful medical team at Northwestern University Hospital and my surgeon provided a few referrals in my new hometown. The type of specialist I need is normally booked out months in advance so I am already on their calendar to establish a baseline.

I also have a copy of ALL my medical records (test results, patient visit summaries, surgical summaries) so that I can ensure my new medical team has them before my first appointment. I’ve been disappointed in the past when my medical records didn’t show up in a timely manner. This is also important if you are on any maintenance prescriptions – find a medical professional sooner vs later before your prescription runs out.

Update my will and health care directive

This is one I think a lot of people don’t realize. Each state sets their own estate laws and if you move, it’s vital to update your will, living will and health care directive. Most companies have resources to update your will and health care directive for free.

If your employer doesn’t have this benefit, you’re in luck because there are several free and/or low cost options available. MyDirectives.com, Do Your Own Will or your local hospital should have these for free. Or check out Legal Zoom or Nolo – you can create all those documents for one low price.

My point though is – do it soon. Then share your wishes with your loved ones, no matter where they live. My personal goal is to have my estate documents updated before Thanksgiving and give an updated copy to my executor and healthcare POA.

I’m super excited about spending my winter weekends on the beach with my new neighbors and the Midwestern friends already lined up to visit me. Maybe I’ll send those sweaters and coats back with them!

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3 Important Adulting Lessons I Taught My Daughters This Summer

September 22, 2017

A few years back I wrote about my daughters’ experience with having college roommates and the perils that can come along with that. Well, they did learn some valuable lessons about reading a contract before signing it and that it’s not always good to live with friends!

I’m super proud to say that one daughter graduated from The Ohio State University in May and accepted a nursing position at a local hospital. Her twin sister is in the home stretch and will finish in December so they decided to move to a smaller place and eliminate the roommate drama.

Letting them figure it out

I purposely took a step back during all this transition because it was time for them to handle the tasks I normally would do such as arrange the movers, help pack, and review the new lease – what my daughters call “adulting.” Their move was stressful – what move isn’t? – but fairly uneventful. And they learned a lot.

Teaching them to adult

But there are still some areas of adulting where they need my guidance before I’ll feel comfortable just letting them figure it out. Here are three that I focused on this summer:

1. Read and understand ALL your employee benefits. My daughter accepted her full time position in June and had thirty days to review and enroll in her benefits. Luckily she has a mom who works in financial wellness and can help her decide what makes sense for her.

For instance, she declined her medical insurance because I will continue to carry her on my company’s insurance (thank you Financial Finesse and the Affordable Care Act), and she would have stopped there if I hadn’t spoke up.

I suggested she read all the benefits and think about what else is important for her. She eventually enrolled in her 401(k) (10% at my insistence) and pet insurance for their 14 year old dog Cosby. Smart.

2. Think about the longer term. I really don’t like nagging, however it’s necessary sometimes when the outcome is important. My newly hired child learned that the hard way when she received her 1^st paycheck and realized that her 401(k) election hadn’t been processed. She emailed HR about the mix-up, got no response and gave up. That wasn’t going to work for me. I nagged her until she went to her HR department and had a representative correct the issue.

Why did I stay on her about this? Most new hires have 30 days to make benefit elections then must wait until open enrollment later in the year if they want to make changes. My daughter could have missed out on six months of 401k contributions plus the employer match – that’s $3,250. But over 40 years at a 7% return, that could grow to over $48,000! Now she understands why I pushed so hard for her to follow up.

3. Use your phone for more than texting and social media. Mind you, I appreciate the convenience of texting and using apps to stay connected, but when did talking on a cell phone become taboo? Maybe in 15 years when the Millenials and Gen Z’s are running the world this won’t be quite as important but for now, it’s sometimes necessary to call a person.

After their move, my daughters needed to update and pay their home and auto insurance. Somehow wires got crossed and the insurance was cancelled. My daughter emailed their insurance agent once she realized they had no auto insurance but didn’t get a reply.

She happened to mention this to me and I asked, “Did you call them?’ Her reply, “No.” My not-so-calm response was, “What?? This is urgent for you, so call the agent, leave a message if they don’t answer and get some insurance!” That did the trick.

What it means to adult

Adulting means taking responsibility for your actions and more importantly, the outcome of your decisions. Experience is teaching my daughters the importance of these lessons and thankfully they didn’t suffer any negative consequences.

Now if only my daughter would realize how much she spends on lattes, but that’s a lesson for another day. Perhaps Doug can help me when I’m ready to tackle that one…

How I Coped With My Husband’s Unexpected Death

July 31, 2015

It seems like yesterday but I know that’s just my mind playing tricks on me. I’m approaching the ten year anniversary of my husband’s death but at times it still seems like it happened yesterday. I’ve learned so much about myself, other people and life these past ten years. My hope is that this has not been in vain and my story can help someone else.

My husband was only 40 years old and seemingly in great health when he suddenly collapsed and died on a hot summer afternoon. In the blink of an eye, I was a young widow with two little kids. I was working part-time since we had recently moved for his new job, which required him to travel for long stretches of time.

Not only did I lose my best friend and father of my children, but also our source of income and health insurance. The following years were dark and extremely difficult. I felt lost and alone even though many good people were around me. Now however I can look back and see some of the lessons that I’ve learned.

Hope for the best but plan for the worst

We knew several families where one spouse died unexpectedly and left the family financially devastated so we were determined not to make that mistake. Soon after our twin daughters were born, we met with an insurance agent and bought term life insurance for both of us. As my husband’s career and income grew, he increased the amount of coverage through his employer.

This strategy was a cost-effective way to protect our family against the unlikely odds that he would die young. Thankfully, we had the discipline to do this. Now our family has the financial resources to maintain our lifestyle and meet our goals of paying for our daughters’ college education.

Lesson: It’s never fun to talk about death but it’s something we all need to prepare for. If you have someone dependent upon your ability to work, buy enough life insurance to replace your income. This calculator can help you determine how much is needed then check with your employer to determine how much supplemental insurance you can purchase there. Most times, it is more cost-effective to buy a standalone policy and then supplement the rest with your employer’s group coverage.

Get help

I have an engineering degree and had been in the financial services industry for 4 years, but I struggled to help my daughters complete their 5^th grade math homework after Larry died. I was unusually forgetful and felt like I was in a dense fog. It was clear that I needed professional help, emotionally and financially, so I found doctors to help me and my daughters deal with our tragedy. Fortunately, I worked for some amazing financial planners and they helped me set up my finances for the long term.

Lesson: Don’t let pride stand in your way of recovery. We were never meant to do life alone. Sometimes we get hit with a curve ball and the smartest thing we can do is get assistance. Check with your HR department to learn about your employee assistance program. Most offer free initial counseling sessions and referrals to local professionals for longer term assistance.

Ask the local Salvation Army, Red Cross or large local churches for assistance with immediate financial needs. If you are overwhelmed with debt, contact a non-profit credit counseling service affiliated with the NFCC to help you develop a strategy for unloading that burden. And if you need financial advice, look for a fee-based CERTIFIED FINANCIAL PLANNER(TM) professional who has the credentials, training and experience to guide you towards your goals.

The journey begins with the first step

I didn’t want life to continue after my husband died. I couldn’t imagine how I’d make it through the week let alone Christmas, the kids’ birthdays and our anniversary. Those days were excruciating but I learned that it was better to face the situation than hide from it.

A friend suggested that I plan constructive activities on the tough days and create new, happy memories and so that’s what I did. My daughters and I choose to celebrate Larry’s birthday (and not his death) by baking a German Chocolate cake from scratch – his favorite. We then share the cake with friends and family and laugh the time away telling funny stories.

Lesson: Life can knock you flat on your back. Spend time there for a moment to gather your wits, then get up and take a step forward. If you are struggling with debt and cash flow, set up a budget using Mint or YNAB. Then choose a debt repayment strategy such as the “debt snowball” method or paying the highest interest rate debt first. Even applying an extra $25 a month is a big step forward!

Be open to new adventures

Three years later, I was presented with an opportunity to go back to school. I was intrigued but didn’t think it was the right time. A good friend told me, “In five years you will be five years older but what will you be able to say you accomplished? Might as well say that you did this!”

Well, I took her challenge, completed my studies and earned my CFP® designation. Along the way, I have met so many new people and find myself doing what I absolutely love here at Financial Finesse. I found my professional calling and wouldn’t have been here if it hadn’t been for my friend’s prompting and my willingness to go in a new direction.

Lesson: Try something new today. Join a book club. Go to that belly dancing class. Determine if your employer has a tuition assistance program and take a college course. Prioritize your savings so you can nurture your passions and do the things you’ve always wanted to do.

I would never volunteer for the pain my family experienced with Larry’s passing. However, I know we are stronger and more compassionate because of our journey. We’ll open a bottle of fine wine, toast the man we knew and loved, shed a few tears and then laugh the evening away with old stories and talk of new adventures. Happy anniversary!

Is Smaller Better???

July 24, 2015

Have you watched HGTV recently? They have a show called Tiny House Hunters (spoiler alert – it’s not about termites looking for a new place to destroy) where people are on the hunt for ultra small houses. Most of the houses showcased are less than 200 square feet. That is smaller than the average US standard hotel room. I watched each episode with wonder, trying to imagine living in such a miniscule space.

A few buyers wanted to be free to move around. These tiny houses allowed their owners to move anywhere a truck could haul it. Others wanted to live more eco-friendly and have a small carbon footprint.

But the episode that really grabbed my attention was about a single woman who wanted to simplify her life and retire early. She figured out that she could afford to live in her dream location as long as she kept her housing costs under $60,000. So she quit her job, sold her lovely house in Colorado and set her sights on a tiny house on Hawaii’s Big Island.

So is this just a fad? While it is extreme, there is a definite movement towards smaller houses. Per this article, the National Association of Home Builders states that the average house size has shrunk from over 2,500 sq ft in 2007 to 2,152 in 2015. After decades of expanding house sizes, it looks like the days of the McMansion are waning.

What’s driving this trend? More Americans have decided that working 12 hour days plus an hour commute just to afford their big house isn’t worth the trade offs. Then there are the Baby Boomers – a large population of empty-nesters who don’t want the expensive and time-consuming maintenance required for their big houses and big yards. Lastly, millennials are demanding smaller, more eco-friendly homes in the urban areas. Home builders are listening and are building new single family houses that are smaller.

While I doubt I could live in a house smaller than the average dorm room, I am in the process of downsizing my life. My children are in college at Ohio State University so I sold the big suburban family home and bought a smaller single family house in the city. It’s large enough to comfortably accommodate them when they visit for the holidays but too big for just me.

A short term goal is to downsize even more in four years to a place with two bedrooms and water views and use the proceeds plus my savings to help fund my retirement. Every year, I check my plan with this retirement calculator to make sure I’m on track. Of course, life can throw curve balls but hopefully my plan to cut expenses now and even more in the future can help me dodge most problems.

I don’t know what drove the lady in Tiny House Hunters to retire in her mid-50s and pursue her dream of living in Hawaii. She bucked society’s norm by giving up her big house and fancy job to do something as radical as living in a tiny house. Extreme? Yes, but I admire her courage and dedication.

5 Lessons I Learned When I Downsized My Home

April 17, 2015

I am especially thankful this past Easter because I moved into my new house. The kids are away at college so I decided to downsize and move to the city. After almost a year of living in temporary housing, my newly renovated, 19^th century row house was ready. Yeah! I was like a kid on Christmas morning as I watched the moving truck arrive and the movers bring in my belongings that were in storage for the past year.

Seven hours and a gazillion boxes later, I was feeling overwhelmed and exhausted. Was this all mine? Gosh, I didn’t remember having so much STUFF. I’ve spent the past three days unpacking and working very hard to turn what looks like a hoarder’s paradise into my home. Here are some lessons that I’ve learned as the boxes get unpacked:

Stuff multiplies in the dark. I decluttered my previous house before listing it for sale. Then before the moving truck arrived, I donated countless bags of clothes, sold furniture on Craigslist, and then filled a dumpster with all the other things that I knew I couldn’t or wouldn’t use anymore. Still, I am overwhelmed with all the stuff that arrived this weekend and am convinced that it multiplied while in storage! How else can I explain the four identical cookie sheets, six baking dishes, and five black sweaters?

This house just can’t hold as much stuff so I’m re-packing boxes of gently used cookware, clothes and furniture for Goodwill. It’s a shame that I paid the moving company to pack, store for a year, haul 600 miles to my new house, then unpack a lot of things…all to give it away. That’s a lot of money spent on things that I didn’t need.

Protect the priceless. I spent 24 years collecting things to provide a warm and inviting home for my family. We had countless sleepovers, family gatherings, and home cooked meals throughout the years and I loved those times. However, looking back, I know that I could have provided the same great times without all the household stuff that I acquired.

As I unpack, the things that moved my heart the most were the pictures. They triggered the memories that are truly priceless. However, they were just placed in regular boxes and the elements destroyed some of them. I will go through the stacks of pictures, throw away those that were bad shots, and make digital copies of the keepers. I will store the digital copies on free online sites like Google Drive or Dropbox or store them on an external hard drive.

When moving, pay for full value protection. I chose a national moving company because my move was across a few states and I wanted the convenience of having one contact during the entire process. This company came highly recommended by people that I trusted but I had a fair amount of damaged items. In particular, my buffet server and my grandmother’s cedar chest were badly broken.

I don’t have receipts for either. However, because I purchased full value protection insurance, I should be able to replace the buffet with something comparable. My grandmother’s cedar chest was nothing fancy, but it was priceless to me, and my claims agent has already reached out to see how it can possibly be repaired. Only time will tell, but this was insurance that I’m glad I bought.

Think very hard before buying anything else. Before the move, I’d been pretty good about staying out of the stores. I struggle with being inside Target or Bed, Bath & Beyond and making impulse purchases, but I need bath rugs, window coverings, and other miscellaneous (but expensive) things for the new house.

I will be very deliberate on what I buy this time around. I have a list and a budget in hand before I go. I also do my best to speed through the aisles and not linger. This way, I don’t happen to see some new, fancy thing-a-mo-bob and convince myself that I need it.

Keep the ibuprofen handy. I absolutely love my row house except for the stairs. I have easily climbed 100 flights over the past few days and my legs are in serious pain.

Add the fact that I’ve carried boxes up and down those said flights, and it’s easy to understand why my back, shoulders and arms all feel like I’ve been hit by a truck. I think I’ll cancel my gym membership. Thankfully, I remembered to pull out the pain meds as well as other important items like my passport, prescription medications, bank account statements, jewelry, will and living will documents. Now if I can only find the box with the wine glasses….

Why I’m Still Sticking With Cash

February 20, 2015

I recently read an article in the Delta Sky magazine that talked about the future of how we pay for things. The author summarized that cash and credit cards will soon be as obsolete as encyclopedia sets, 8-track players and typewriters. His opinion is that new mobile technology such as Apple Pay or Google Wallet will be the preferred way to buy our groceries, gasoline and everything else because it will be more convenient and safer. In fact, an article in Business Insider points out that U.S. consumers are using cash less than debit and credit cards for the first time. So, will cash go the way of the typewriter?

While new technology is exciting and can help make our lives more efficient, it can also create new problems. For example, smartphones can keep us connected, but we now live in a world that feels impersonal and forever noisy. I appreciate convenience as much as the next person, but I’m not convinced that giving up cash will make life that much easier. Here’s why:

Cash is tangible. Many people prefer cash because they can touch it, hold it, and see it. It is the easiest way to understand how money works and still helps many live within their means. The envelop method of budgeting is based on the principle of putting cash into physical envelopes for different categories. It may be old school, but it works because when the cash is gone – it’s gone.
Cash doesn’t need electricity. I remember when a nasty storm blew through town a few years back and brought the area to its knees. The wind and ice took out the power and/or telephone lines in most of the city for almost a week. As power and phone service were brought back on, it was clear that cash was king. Many businesses had generators to power the basics but only accepted cash. Most banks were closed so no ATM. My father taught me to always have cash on me but over time, I grew lazy and reliant on using my debit card. After living through that storm and lack of electricity, I now keep cash on me at all times!
Cash can earn you discounts. Credit card companies like Visa, American Express and Discover charge merchants up to 3% on all transactions. Apple Pay and Google Wallet are simply fancy ways to pay for your purchases using your existing credit cards. That’s why some business owners offer an incentive for their customers to pay with cash instead of credit.
Cash is secure. Millions of Americans’ private credit data was stolen last holiday season when hackers compromised retailers like Target and Home Depot. These retailers do an incredible job of trying to keep their customers’ information secure, however there are inherent risks with using credit cards. While the new mobile payment companies use new technology to make those transactions more secure, it’s only a matter of time before the bad guys figure out how to hack this too. Cash doesn’t have that problem. If you are concerned about keeping your private data secure, consider paying in cash more often.

These new technologies may indeed be the norm years from now. But until the technology becomes more mainstream and proves to be more secure, I think I’ll stick with good old cash as much as possible.

The Importance Of Reading The Fine Print Of A Lease

February 06, 2015

My twin daughters are sophomores at Ohio State University and decided to move off campus for their junior year. This is a rite of passage for college students and my girls are very excited to live with four of their friends in a restored, old house about three blocks from campus. After a fast and furious search, all the kids fell in love with this house, verbally agreed to rent it, and some even signed the rental agreement on the spot.

My daughters called me in a panic and wanted me to sign the parental section “RIGHT NOW!” Hold up! We aren’t Congress –we are going to read the contract before signing it. Based on this experience, here are a few lessons that my daughters learned:

Read the fine print.
Get it in writing.
If you don’t understand it, find help.
Be prepared to walk away.

Read the fine print. Once I received a copy of the lease, I read a section buried in the middle that said,“The property must be show ready at all times. If not, there will be a $50 fine. This means beds made, no clothes on the floor, no dishes in the sink and the grass cut.”

Wait, what? I can’t speak for the other four kids but I know my daughters can be complete slobs (in spite of their upbringing). I asked my daughters about this clause and neither one knew it was in there! What are the odds that six 20-year old college students are going to keep their place “show ready?” Which leads to the next point…

Get it in writing. I insisted that my daughters understand what that clause means. Does the landlord expect the place to be this way all the time or just when he’s trying to rent it out? Will he give notice before showing up? Will the fine be assessed per occasion or infraction?

For example, if someone left dishes in the sink and another person’s room looked like a tornado hit, does that cost $50 or $100? This wasn’t clear in the lease so they asked the landlord to clarify it in an addendum. I also insisted that all the roommates understand this clause and how it will affect them. As unrealistic as I think this is, all the roommates agreed to this clause and signed an agreement among themselves that they will hold up their end of the bargain.

If you don’t understand it, find help. After my daughters saw that clause, they went back and truly read the lease. For the most part, it was self-explanatory, however they had several questions. Luckily, I’ve read my fair share of leases and other legal documents so I could explain the terms and walk my daughters’ through the meaning behind the legalese.

But what if I didn’t understand something? One resource is my company’s EAP which has a free legal service. I have the option of a free 30-minute consultation and if I need more specific help, I can be referred to a local attorney at a reduced rate.

Lastly, after reading the lease, I thought the kids should walk away and find another house to rent. They all felt differently and really believe this will be a great experience. Time will tell, but I see this as an important life lesson. My girls now realize that they must read and understand a document before they sign it. Soon they will learn that friends don’t always make good roommates, but that’s another story!

Noise Cancelling Headphones Needed

January 30, 2015

I recently had a flight to remember. After a mad scramble to the airport and through the security line, all I wanted to do was relax in my airline seat after a long day. I plopped down into my seat next to a guy with ear buds that I think allowed me to hear his music better than he could.

The volume on his phone was probably not that high but I could clearly hear his music and I was annoyed because I was tired, felt a cold/flu coming on, and just wanted to relax. He promptly fell asleep but I couldn’t because his music was keeping me awake. As I was sitting there trying to focus on something other than his heavy metal playlist, I longed for noise cancelling headphones!

Then I thought it would be nice to have something to drown out the noise in the advertising world the way noise cancelling headphones block out the audio distractions. Thankfully, the holiday season is over along with the 24/7 messages to buy, buy, buy. Of course, these media messages don’t talk about how to pay for all the things we buy…

Now, a month later, the bills are coming due. I heard a commercial the other day suggesting that I don’t have to worry about those bills because I can make them all go away by filing for bankruptcy. Incredible!

That’s an awesome message. Shop till you drop…then file bankruptcy. That’s not exactly the way I’d recommend people handle the holiday season! Then I remembered how nice it would be to have those noise cancelling “financial headphones” to drown out all the fiscally irresponsible messages we all hear so that we can focus on what’s important to be as healthy financially as possible.

I will use my “financial headphones” to drown out the urge to only pay the minimum on my credit card. I will also fight the temptation to buy anything that I will not pay cash for. Next, I’d use my headphones to drown out the financial talking heads who shout their predictions of the economy and the markets. If I had listened to some of the 2014 predictions,

We would be experiencing 50% unemployment, a 90% drop in the stock market and 100% annual inflation, as predicted by economist Robert Weidemer.
Silver will have a 50% return (it had a -13.84% annual return in 2014)
A barrel of oil will be close to $150 (Brent Crude Oil spot price on Dec 31^st was $55.27 per barrel)
The Fed will be viewed as acting too timidly and Democrats will win control of Congress. (Tell that to all the Democrats that lost their seats.)

My point is that these “experts” don’t truly know more than you or I do so don’t spend precious time listening to them. Put those headphones on! Instead choose your investments based on your goal timeline and risk tolerance.

For example, my friend has a plan to buy a house this year so her down payment is in a bank savings account. Her tolerance for losing money is zero since she needs it soon. Her short term investment goals are far different than her long term investment goals so she has a different approach to long term investing. Her Roth IRA is invested 70% in stocks and 30% in more conservative investments because she can tolerate short term market dips in order to potentially gain longer term. Blocking out the “expert predictions” can be a valuable thing in your financial life.

Lastly, if I had those magical financial headphones, I’d use them to block the constant message that I need new stuff. When my cell phone contract expires this year, I won’t buy a new cell phone just because I can. My current one works just fine. When I move into my next house, I will only purchase what I truly need – which is very little.

I also plan to turn off the TV and the computer to minimize the amount of advertising that I’m exposed to. I’m starting to think that advertising just might be a little bit too effective today! I have a business trip planned next week and I’ll make sure to pack my noise cancelling headphones. I have learned my lesson and am better prepared for my next plane ride as well as for my future goals.

Should You Go For The Gold?

February 27, 2014

With the 2014 Winter Olympics in Sochi now over, the United States ended up winning 9 gold medals, 6 silver and 11 bronze medals. It’s truly amazing to watch the athletes ski, slide, glide and flip their way to Olympic history. There was a previous post about how athletes are taxed on the prize money awarded with their medals and as I watched the games, I thought about how gold and other precious metals can help an investor reach their financial goals.

Two extremes

There are two extremes on the precious metals spectrum. There are some who believe that investing in gold is a money losing proposition because it doesn’t pay dividends and it costs money to store. In fact, Warren Buffet said, “Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.”

On the other end are those who believe that the US dollar is quickly losing purchasing power and gold is the true currency. There’s a growing concern that rampant inflation and debt will make the dollar worthless. While I know people who believe that inflation will soon jump to double digits and we’ll burn dollars for fuel, I question their reason for gathering gold or silver. If we suffer such devastating economic collapse, I don’t believe the main currency will be gold or silver but gasoline, food, clean water, and antibiotics.

The place for gold in our portfolios

The place for gold in our financial portfolios is somewhere in the middle of the spectrum. Gold is part of a larger asset class called commodities. Its price tends to be uncorrelated to the stock market, so having some gold can lower the overall risk of a portfolio. A recent study by economists reported that from 1836 to 2011, gold earned an average annual inflation-adjusted return of 1.1 percent. By contrast, they estimated long-term returns to be 1.0 percent for Treasury bills, 2.9 percent for long-term bonds and 7.4 percent for stocks.

So how much gold should you have in your portfolio? It depends on your risk tolerance and overall goals but many economists suggest that gold or silver comprise no more than 2% of your overall investment portfolio. Of course, the recent Olympic medalists aren’t thinking about what the economists are saying. Their medals ARE the dividends of all their hard work and dedication. Congratulations to all the athletes!