“Today, if you make enough money for [Goldman Sachs] (and are not currently an ax murderer) you will be promoted into a position of influence.”
Q: Do you recommend dividend-paying stocks? If not, what investment strategy do you recommend for retirees like me who are seeking income from our portfolios?
Diversifying your portfolio means finding assets that have value on their own merits but do not move exactly alike. Here are the principles on building and rebalancing asset classes and subcategories.
Crafting portfolio asset allocations is a combination of art and engineering. Just as a blending of colors can produce cerulean, so a blending of indexes produces a unique shade of risk and return.
David John Marotta presents a list of the best Exchange Traded Funds (ETFs) of 2012 and how you can take advantage of these funds in your investment portfolio.
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David John Marotta presents ten important wealth management ideas for those in and approaching retirement.
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David John Marotta presents how to use Roth conversions, segregations and recharacterizations to put the most money where it will never be taxed again in the most tax efficient manner.
Some say don’t make extra payments, take the tax deduction. Others say you need to be debt free.
Dividend investors are too easily lulled into the temporary comforts of portfolio income.
Starting in 2013, pending further legislation, the capital gains tax will go up to 20%.
The 85-year-old Palo Alto patriarch has turned helping his 10 grandchildren into a hobby that has paid off for multiple generations.
The efficient frontier measures all investments on a scale of risk and return. Risk is commonly placed on the x-axis, and return is placed on the y-axis.
Should it be invested aggressively, like 100% equities, or use the same split as my taxable investments, such as 50-50 stocks vs bonds?
Buffett estimates that he has a 60% chance of winning. This is in line with statistics suggesting that low cost funds beat high cost funds more than half the time.
Even if the overall inflation rate is only 2.25% in the next 10 years, an investor who holds a 10-year Treasury until maturity will realize a zero real return after inflation.
The qualified dividend tax rate is currently at a maximum of 15%, as are capital gains. Starting January 1, 2013, dividend tax rates will go up to the investor’s ordinary income rate.
A stock’s valuation is measured on a continuum from “value” to “growth” In broad strokes, value stocks are cheap and growth stocks are expensive.
There is a distinction between existing high capital gains exposure in a mutual fund verses future capital gains you expose yourself to.
My wife and I have six of our eight grandparents who are living well into their 80s and 90s.
Given all the greed and deceit in the world of financial services you shouldn’t have to trust your financial advisor. Here is a list of eight safeguards that should be in place to help safeguard your money.
Many people turn to religion when defining these shared values.
The second factor of investing is size as measured by a stock’s total capitalization. Over time small cap will outperform large cap even after factoring out measurements of volatility.
Couples that fail to prepare for a shared money maturity will likely experience longer and sharper growing pains. Here are several things to talk about before tying the knot.
Many couples have significant issues about money. Many people’s beliefs are holding them back from enjoying life to its fullest potential. Make sure someone asks you the right questions.
I highly recommend that you plan to live on one salary for the first several years. This is a challenge that too few couples accept.
“Deciding when to take Social Security benefits is critically important to maximizing long-term benefits. Benefits may be claimed as early as age 62, or as late as 70.”
Begin by reflecting on this question: “Imagine you are financially secure, that you have enough money to take care of your needs, now and in the future.
Modeling investment returns seeks to find an equation to predict your expected returns as much as possible. The simplest equation for the markets would be “Return equals 11.71%.” This has been the average return from 1927 through 2010, the zero factor model.
“Economics in One Lesson” by Henry Hazlitt is one of the classics which should be required reading before voting. It is interesting to see that he knew more in 1946 than the politicians of our age.
Financial troubles and marital troubles go together. Does financial largess therefore also go with marital harmony? Do something romantic together: Engage a fee-only financial planner.
David John Marotta and Matthew Illian discuss how to get more from Social Security by filing at the right time and taking benefits at the right time.
Couples that fail to prepare for a shared money maturity will likely experience longer and sharper growing pains.
“Unlike the government economic advisor, these entrepreneurial castaways are not making, i.e. printing, money. Instead, they’re creating new wealth by producing things that others find valuable.”
Social Security benefits can represent a big stack of cash. A typical monthly benefit of $2,200 has a present value well over $500,000. Consider all your Social Security options carefully to avoid making a costly mistake.
If you had the services of a financial advisor working for you, what would you want them to work on?
Q: I recently landed a job that will allow me to begin saving. My company offers a 401(k) and a 3% match, but I also have college debts of $15,000 and a credit card balance of $650. How do you recommend I proceed?
“How can you respond if these new taxes are enacted? One option is to do a Roth conversion so that you can pay taxes now for those retirement funds.”
Nearly everyone is an excellent candidate for a Roth conversion this year. You can always undo part or all of a Roth conversion with what’s called a recharacterization, so you can’t convert too much.
Who would have thought that someone earning $10,700 might want to purposefully push their taxable income up to $217,450 this year in order to pay $47,595 more in taxes at these lower 2012 tax rates?
Who would have thought that someone in the 33% tax bracket now who will be in a lower 28% tax bracket in the future might want to do a Roth conversion at his higher rates now?
Who would have thought that someone earning $400,000 might want to purposefully push their taxable income up to $1.2M this year in order to pay $280,000 more in taxes at these lower 2012 tax rates?
Who would have thought that someone earning $75,000 might want to purposefully push their taxable income up to $275,000 this year in order to pay as much as possible at these lower 2012 tax rates!
Nearly everyone is an excellent candidate for executing a Roth conversion this year. But it is helpful to have a target amount in mind before you begin.
Women are more afraid of becoming “bag ladies” than men, and it makes them approach investing and saving for retirement differently, assuming they have managed to tackle either of those chores.
A Roth provides more flexibility than its Roth 401(k) counterpart because you can access the principal at any time without penalty.
It is better that you stop saving and use that money to do some of the things you’ve been longing to do, than it is to quit your job and retire early because you think that is the only way you can achieve your goals.
You may be a good candidate for a Roth conversion in 2012 if you can answer “yes” to any of these statements.
Do you think of being financially organized as a way to love your spouse? David and Krisan Marotta explain why you should.