What Eating Halloween Candy Can Teach Us About Financial Success

October 31, 2013

When I was a little kid, I used to look forward to being able to gorge on all my Halloween candy. It didn’t take long for me to realize what economists call “diminishing marginal utility.” Each additional piece of candy would bring me less pleasure than the last. It would eventually get to the point where eating more candy would only make me feel sick. Continue reading “What Eating Halloween Candy Can Teach Us About Financial Success”

The 5 Most Rewarding Cash Back Credit Cards

October 17, 2013

I recently received an email from a friend asking for a suggestion for a new cash back rewards card. Credit card debt can be a dangerous thing but as long as you pay off the balance in full each month, getting cash back is a great perk to using credit cards. I especially like cash back as a reward because of the simplicity and flexibility it offers versus miles and other types of rewards. Without further ado, here are the best ones I’ve found: Continue reading “The 5 Most Rewarding Cash Back Credit Cards”

How I Became a Financial Educator

October 10, 2013

For the past week, each of us has been writing about our careers as financial educators and how we got here. My interest in personal finance started at a really young age when my father, who was a stockbroker at the time, gave me the “Dean Witter Guide to Personal Investing” in the 4th grade and I actually read it. (Linda, you’re not the only finance geek.) I can’t say that I understood all of it but I got the importance of saving as much of my measly allowance as I could and starting the magic of compound interest as early as possible. Continue reading “How I Became a Financial Educator”

5 Myths About Real Estate Investing

October 03, 2013

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”

Are Annuities a Good Deal or a Rip-Off?

September 26, 2013

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?”

How to Invest for Income When Rates Are Rising

September 19, 2013

One of the biggest challenges facing current and future retirees is shifting from investing for growth to investing for income. This is especially difficult in today’s environment of low and possibly rising interest rates. Let’s start by taking a look at some options for getting investment income in retirement: Continue reading “How to Invest for Income When Rates Are Rising”

The 3 Most Important Words in Financial Planning

September 05, 2013

According to this article, the three most important words when it comes to investing are the “margin of safety.” The article discusses how inaccurate people tend to be at making predictions about things like the economy, industry trends, and business growth. Since this unpredictability can wreak havoc on investment plans, many of the top investment experts recommend investing with a margin of safety, which is “simply the distance between your predictions coming true and needing those predictions to come true. You can still try to predict the future, but a margin of safety gives you room for error to be wrong.” In other words, rather than pick the investment that needs to grow at 10% per year to payoff, pick the one that could grow at 10% but would still be a good investment if it only grew at 5% with anything else being gravy on top. Continue reading “The 3 Most Important Words in Financial Planning”

How to Say “No” to Your Boss

August 29, 2013

Unless you’ve been living on a deserted island, you’ve probably heard about the exploits of my now former mayor, Bob Filner. The most notorious were the allegations by numerous women  of various forms of inappropriate flirting, sexual harassment and possibly even assault. Less provocative, but also quite disturbing, were reports of improper demands for financial concessions from developers and the misuse of a city credit card for personal expenses. Continue reading “How to Say “No” to Your Boss”

4 Financial “Myths” Than Can Actually Help You

August 22, 2013

I recently read this blog post on Forbes called “4 Financial Myths Than Can Hurt You.” Sounds interesting doesn’t it? Who doesn’t want to bust some myths that could be hurting you financially? The problem is that in trying to dispel these myths, the author perpetuates some of his own. Let’s take a look at each “myth.” Continue reading “4 Financial “Myths” Than Can Actually Help You”

10 Common Financial Mistakes to Avoid

August 15, 2013

A friend of mine recently sent me this article about how in many competitive areas of life, it makes more sense to focus on preventing bad decisions rather than trying to make good ones. That’s because the advantages of making the good decisions can be largely cancelled out by other people making good decisions. In other words, it’s really hard to beat everyone else by making good decisions and relatively easy to avoid making the bad ones. This is what’s called a  “loser’s game.” Continue reading “10 Common Financial Mistakes to Avoid”

What is Risk?

August 08, 2013

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?”

The Case Against “Moderation”

August 01, 2013

In this blog post, Michael makes the argument for a moderate middle ground between a couple he knows that are living well beyond their means and another couple he read about in this article that managed to pay off their mortgage in less than 5  years. While paying off your mortgage early may seem like a great thing, Michael worries that the couple may look back on this time of their lives with regret at all the things they didn’t do with that money. I don’t and here’s why. Continue reading “The Case Against “Moderation””

How to Get Around Roth IRA Income Limits

July 25, 2013

Updated February, 2018

A while ago, I wrote about some reasons to consider contributing to a Roth IRA. But if you earn too much to contribute to one, these arguments may seem like a moot point. However, there are a few things to keep in mind before completely writing off the Roth IRA. Continue reading “How to Get Around Roth IRA Income Limits”

To Buy or Not to Buy

July 18, 2013

I was reflecting on my “best investment decision” from my post last week and realized that the same caution that led me to not buy a home at the top of the real estate bubble also made me miss buying  a home near the bottom of the real estate market last year. I looked at several properties that I liked and they were priced low enough that I could have easily more than covered the monthly costs by renting them out if I had to. However, there were so many good options that I suffered from “analysis paralysis” and ended up not buying any of them. Continue reading “To Buy or Not to Buy”

Bubbles Come in All Shapes and Sizes

July 11, 2013

After reading my colleagues’ blog posts this week about their best and worst investment decisions ever, I’m glad that I was in college until 2000 and missed the dot com bubble of the late 90’s. As a college student, I didn’t have money to invest in the likes of pets.com even if I wanted to. Instead, I got to watch the rise and fall of the “New Economy” stocks from a distance. The only thing better than learning from your mistakes is learning from other people’s mistakes. Continue reading “Bubbles Come in All Shapes and Sizes”

Financial Lessons From My Father

June 20, 2013

With my colleague Greg Ward’s post yesterday about teaching his children the value of a dollar and Father’s Day still in my recent memory, I reflected on what financial lessons my own father passed on to me. After all, he was a former stockbroker and is now a successful investor. Here are some that have stuck with me: Continue reading “Financial Lessons From My Father”

5 Ways to Save for Retirement With Some Surprising Benefits

June 13, 2013

When it comes to saving for retirement, most people know to contribute to their employer’s retirement plan (at least enough to max out their employer’s match) but there are also other ways of saving for retirement with some unique benefits that are not quite as well known. Here are 5 that you want to take advantage of if possible: Continue reading “5 Ways to Save for Retirement With Some Surprising Benefits”