Is the Stock Market Too High to Invest?

May 23, 2013

Usually when I talk about investment mistakes, I refer to what is known as the “greed, hope, and fear” cycle. This is the well-known tendency of investors to invest more aggressively when the stock market is doing well, hope it will come back when the market begins its inevitable downturn, and then eventually sell near the bottom out of sell fear. Investors are then typically reluctant to get back in until things “settle down,” which means when the market has gone up for an extended period of time and is possibly nearing another high point. This causes investors to buy high and sell low, the opposite of what you want to do.   Continue reading “Is the Stock Market Too High to Invest?”

10 Financial Lessons From the Celebrity Apprentice

May 16, 2013

While I don’t generally watch tv or even own one, I have to admit that I’m a huge fan of one particular show: The Apprentice, which is currently on the verge of the finale of its All-Star Celebrity Season. While the show has its share of mindless reality tv entertainment, there are lessons that can be derived from it, not just for the business world that the show is based on (albeit loosely) but for our own personal financial lives as well. Here are some financial lessons from this season’s celebrity firings: Continue reading “10 Financial Lessons From the Celebrity Apprentice”

Did Mom Miss Out on this Important Gift?

May 13, 2013

Yesterday, Americans spent nearly $20 billion saying thanks to mothers across the country for their priceless roles as domestic CEOs. Hopefully, you had an enjoyable Mother’s Day weekend and had the opportunity to celebrate with the moms in your life too. While my son and I were making our special recipe of blueberry explosion pancakes in the kitchen for my wife (well, I was primarily trying to minimize the mess he was making out of love for his mommy), I started thinking about my memorable Mother’s Day gifts of the past. As a child, I’m sure there were more than just a few kindhearted but lame attempts at breakfast in bed, homemade cards, flowers, and gift certificates. Even as an adult, I still struggle to find the best gift for my mom and I am sure that I’m not alone when I say that it’s tough to find a substantive gift that adequately says thank you enough. (However, I did come across this open letter to moms everywhere from Kid President and it’s sure to make some moms smile in realizing how awesome they are!) Continue reading “Did Mom Miss Out on this Important Gift?”

When to Retire? How About 40?

April 25, 2013

I recently saw this clip of the Today Show that discussed one man’s goal of retiring before 40, a topic I’ve written about before. He’s 30 years old, earns $50k a year, and has accumulated $100k of savings over the last 3 years. His goal is to save 60-70% of his net income to retire at age 35 with a $400k nest egg to cover his $15k of annual expenses. To do that, he’s moved to Florida to avoid state income taxes and be able to live without a car (he points out that waiting for the bus is much easier in warmer weather) and has decided not to have children. Is his plan feasible? Continue reading “When to Retire? How About 40?”

Is Your Investment Portfolio Missing a Key Ingredient?

April 22, 2013

Do you have a written plan in place to guide your investment decisions? If not, how will you know if your investment plan is on track to meet your financial life planning goals? An excellent way to make sure that you follow an investment plan and have a measurement stick in place to track your progress is to setup an investment policy statement. Continue reading “Is Your Investment Portfolio Missing a Key Ingredient?”

The Stock Market’s Going to Go Down…Unless it Goes Up

April 19, 2013

A question I get asked a lot lately is what I think the stock market is going to do. We are near (or at, depending on when you read this) all time highs in the stock market. 401k balances are rising. Stock prices have risen pretty quickly. A client company of ours has seen its stock rise from $40 to $56 per share in the last several months. Things look great and when I turn on the financial networks, many of the “experts” are predicting a strong market for the next several years. And, that scares people…. Continue reading “The Stock Market’s Going to Go Down…Unless it Goes Up”

Should You Jump on the Bitcoin Bandwagon?

April 18, 2013

Last week, I was asked what I thought about investing in the new digital currency  “bitcoin.” This got me thinking about what successful investors do in general when deciding what to invest in and how to make a rational decision as opposed to being caught up in a herd mentality. Here’s a great process to go through before investing your hard earned dollars in the latest investment trend (or fad): Continue reading “Should You Jump on the Bitcoin Bandwagon?”

Is Your Financial Plan on Track?

April 15, 2013

Are you making progress in your financial life or are you simply trying to keep the train on the tracks when it comes to managing your personal finances? We track the financial well-being of employees in the workplace on a quarterly basis and it is obvious that not everyone out there feels that their financial life is on track. In our 2012 Year in Review research report, retirement preparedness remains a significant concern with only 17% of employees knowing their on target to reach their retirement income goals. Financial stress also remains a potential problem with 82% of the employees participating in the workplace Financial Wellness Assessment reporting some degree of financial stress.  Continue reading “Is Your Financial Plan on Track?”

Can Your 401(k) Be Part of Your Emergency Fund?

April 11, 2013

One of the results from our recent research report that has gotten a lot of attention is that we saw an increase in the number of employees’ accessing their 401(k) balances through loans and hardship withdrawals from about a quarter in 2011 to about a third in 2012. The conventional wisdom is that this means employees need to do a better job with money management and in particular, building an emergency fund of at least 3-6 months of necessary expenses and maybe even more. For someone just starting out, I think this is absolutely true.  Continue reading “Can Your 401(k) Be Part of Your Emergency Fund?”

Ways to Avoid Financial Foolishness on April 1st (and Beyond)

April 01, 2013

Happy April Fool’s Day! Today marks my very first day as a regular contributor to the Monday blog spot for Financial Finesse. When I was first informed of this new role, I thought it may have been some kind of April Fool’s Day prank. Now I know that it wasn’t a practical joke (and hopefully you don’t find my financial tips and guidance comical either) and I look forward to the opportunity to share some of my thoughts and experiences as a financial planner and educator. Continue reading “Ways to Avoid Financial Foolishness on April 1st (and Beyond)”

7 Retirement Planning Blog Posts That Can Help You Retire on Time

March 25, 2013

Almost three years ago, we launched this financial wellness blog and I was pleased to be one of the financial planners chosen to share bits of wisdom and personal finance tips with you. Since then, I’ve written on everything from saving money by couponing to more advanced topics such as taxes and estate planning.  My goal was to share tips on anything and everything that could help you with your personal finances, reduce financial stress and improve your financial wellness and hopefully keep you entertained a bit along the way. Continue reading “7 Retirement Planning Blog Posts That Can Help You Retire on Time”

The College Fund You Don’t Know You Have

March 14, 2013

I talk to many parents of students approaching college age who fret about having little or nothing saved for college. They know how important a college education is and want their children to be able to go to the school of their choice while graduating with as little debt as possible but at best, they only have a few thousand dollars set aside for college expenses, barely enough for one semester’s worth of meals. The rest of their money is tied up in emergency savings, retirement accounts, and a home with little or no equity. Yet, there is one potential bright spot… Continue reading “The College Fund You Don’t Know You Have”

Why It’s No Shocker When Athletes Go Broke

March 08, 2013

As a sports fan, I see a lot of sports–related items in the news, on Facebook, on my Twitter feed…all over the place.  Not too long ago, ESPN aired a special called “Broke” about athletes that earned tens of millions of dollars during their careers who are now completely broke.  A lot of people have expressed a bit of shock and disbelief that someone who earns $10,000,000 or more in a short career can have nothing left just a few short years after their playing days are over. Continue reading “Why It’s No Shocker When Athletes Go Broke”

The Risks of the Self-Directed 401(k) Brokerage Window

February 19, 2013

Does more choice offered through a self-directed brokerage window lead to better asset allocation for 401(k) participants? Based on what I’ve seen over the past few weeks, I’d have to say no.  Having almost unlimited investment options can sound appealing to some employees, but unfortunately in many cases the employees are not putting in the time and effort they need to manage their accounts. Continue reading “The Risks of the Self-Directed 401(k) Brokerage Window”

Retirement Education: Sharing the 7 Habits of Confident Retirees With Your Workforce

February 05, 2013

From  the thousands and thousands of pre-retirees I’ve talked to over the past decade, two consistant comments I hear over and over again are “I wish I’d started saving earlier” and “I wish I’d saved more along the way.”  Since I’ve yet to have an employee tell me they’ve saved too much for retirement, every employee could benefit from knowing the 7 essential habits of highly confident retirees that were concluded from the BlackRock 2012 Retirement Survey, which was conducted by Boston Research Group. Continue reading “Retirement Education: Sharing the 7 Habits of Confident Retirees With Your Workforce”

5 Reasons NOT to Pay Down Debt

January 31, 2013

One of the most common things we help people with is paying off debt. This makes sense because in the case of high-interest debt like payday loans and most credit cards, you can save considerably more in interest by making extra payments towards that debt than you’re likely to earn by investing that same money instead. Paying off debt can also improve your credit score and cash flow. But are there times when it may make sense NOT to pay off debt? Here are a few: Continue reading “5 Reasons NOT to Pay Down Debt”

When It Comes to Investing, Don’t Just Follow the Money

January 16, 2013

This week, USA Today came out with an article on how more money poured into stock mutual funds in the last week than any other week in the last eleven years.  Now at first glance that may come as good news as investor confidence seems to be returning in the wake of a resolution to the fiscal cliff dilemma, but before you jump on the stock market bandwagon, remember the words of renowned investor Warren Buffett.  When asked about his philosophy on investing, he is known to have said he is greedy when others are fearful, and fearful when others are greedy.  In other words, Warren Buffett, one of the greatest investors of all time, has a tendency to go against the flow when it comes to investment decisions. Continue reading “When It Comes to Investing, Don’t Just Follow the Money”

How Much Retirement Income Can You Really Get From Your Portfolio?

January 10, 2013

As a rule of thumb, financial planners generally say that you can safely withdraw about 4% of the value of your nest egg as income in retirement and increase it by inflation each year. That number was based on the “Trinity study” that looked at the outcomes of various withdrawal rates from 1926-2009 as well as additional research by financial planner and author William Bengen. However, I recently came across this interesting blog post that points out a few shortcomings of the study: Continue reading “How Much Retirement Income Can You Really Get From Your Portfolio?”