Financial Planning Insights
It’s definitely hitting the fan out there. The virus has hit almost every asset class and nothing is safe other than cash. Even bonds are selling out.
This is the proverbial “Black Swan Event” that, no doubt, creates a sense of panic every time we look at the markets.
But you should look at this as a temporary downturn in financial assets.
Since Monday the Dow Jones has tumbled further than any week since October 2008. The equity markets are officially in correction territory and most experts are attributing the selloff to the effects of the coronavirus.
In light of the market mania, it can be difficult to stick to fundamentals and very easy to abandon your prior planning and hard work.
Gambling, gaming, speculating.....it's not investing.
This may sound absurd to some people, especially those of an older generation, but I almost never advise clients to make an early or lump sum payment on their home mortgage.
It's not the 1980s anymore. Mortgages are no longer a double digit interest rate monster that wreak havoc on your personal finances.
Estate plans aren’t usually at the top of mind for young, busy families. But leaving your affairs to the state in the event of an untimely death can cause stress for your spouse and children. Also, you might reduce taxes.
By all accounts, this was a banner year for many asset classes. Bonds are up over 8%. But somehow, I suspect many people did not participate in this growth because of the market volatility that occurred in 2018.
Much media hype has been made around discount online brokerages like Schwab and Fidelity cutting their fees from $10, to $7, to $5, and finally $0. For long term investors, this is a trivial cost that massive companies want you to think is important so you invest in their funds.
Insurance for insurance, investment for investment. Don't mix the two.
Sometimes, making good financial decisions is simply about understanding your options, choosing a course of action, and following through with persistence.
My client had worked for the same employer since the mid 1970’s. He was on track to retire around age 67. In early 2019, however, he had a health event that caused him to be hospitalized for several weeks, with months of recovery thereafter.
This was an unplanned retirement.
I’m often surprised by the level of skepticism I hear regarding 529 college savings plans.
The 529 plan allows for easy investment choices, tax free growth and tax-free distributions to pay for college. With an early start to funding, this can create tens of thousands in savings for a family over the many years leading up to college.
So many of my clients express a huge desire to save for their kids’ college educations at the expense of their own retirement. I’ve also seen parents mortgage their home and liquidate portfolios to make tuition payments. As soon as an acceptance letter arrives from a target school (or any school, sometimes)—the examination of cost is almost absent from further action. It becomes “pay the bill by any means necessary.”
Retirement projections are too long range to provide meaningful action steps. Consider a five year cash flow schedule to use as your personal "business plan" for meeting your goals.
In a prior article I explained how advisors add value to investment accounts, but the value of financial advice extends well beyond investments. Worthwhile financial advice professionals should seek to grow and protect a client’s total net worth—rather than simply maximize investment return on liquid assets.
A few studies have examined the value of financial advisors, from an investment standpoint. They all seem to conclude the same thing—that the value of a financial advisor is not in finding the best investments but, rather, designing a basic, workable plan, and more importantly, serving as an accountability partner and barrier from making a big emotional mistake.
We showed that the 4% rule is an insufficient guide for retirement withdrawals. Here are some strategies that can help retirees make their money last.
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