David John Marotta and Megan Russell co-author a syndicated financial column featured in several newspapers across the country.
Americans seem to be divided on the importance of raising the U.S. debt ceiling. Regardless of your personal politics, avoid investing in countries that cavalierly allow their debt and deficit to balloon.
Summer is almost here. It’s time to go fishing or take a trip or do wherever else you enjoy while on vacation. Unless your interests lie in investment management or you have a trusted fiduciary watching over your investments, consider having a portfolio designed to allow you more time to relax.
Understanding how Cost-of-Living Adjustment (COLA) works uncovers some of the complex cause and effect between Social Security adjustments and the real cost of living with higher gasoline prices.
The United States has three sectors of the economy suffering under regulatory red tape: financial services, energy and now health care. I’m certain the financial services regulations have caused more harm than good.
In 2010 I published a column entitled “Now’s Still the Time to Buy a House.” Investing is like chess in slow motion. It is important to review your moves to see how they turned out. Sometimes they don’t turn out well. Our prediction about real estate, however, was brilliant.
The old saying is true: Money can’t buy happiness. Families earning $25,000 a year overspend trying to keep up with those making $50,000, who in turn attempt to live like those making $100,000. For many families the lure of consumerism wins out over qualities like foresight and patience that saving requires.
Someone asked me what disclosures I would require for financial advisors. I’ve written these principles in a yes-or-no format and reworded the questions. “Yes” is the best answer and “no” means you should seek more information or not consider that advisor at all. Although answering affirmatively to all 10 questions would be my first screen in selecting a financial advisor, it still does not guarantee the person has the competence necessary to offer comprehensive wealth management.
Some first-time workers are not worth minimum wage. But without being hired, they can’t learn job-related skills.
Finding countries where you can plant your investments in fertile soil may be one of the most important asset allocation decisions you make for the next several years.
Surprisingly, studies show that onetime windfalls can actually impoverish you. They make you feel rich, which inevitably leads to overspending. But wealth is what you save, not what you spend.
To build real wealth, you need specific wealth management tools.Most families have less than half of the accounts they really need, and young newlyweds often only have a checking account.
Most Americans fail to plan adequately for retirement and consequently miss out on opportunities to enjoy the last third of life. The best and most rewarding financial planning is not just about the numbers but rather takes place in the context of personal goals.
The greatest engine to generate real wealth is saving and investing. And the best way to ensure that your default is saving and investing is to automate the process. Pay yourself first, and your savings will grow exponentially.
Couples who have worked together on a budget already agree on the big picture. Once they make the hard decisions about what will help further the family’s values, specific purchases in each category are much less critical.
Computing your net worth annually is like taking a sextant reading to chart your course toward financial security. Net worth gives you a snapshot of how much money would be left if you converted everything you owned into cash and paid off all your debts.
Financial resolutions usually don’t even last until the end of January. Making a permanent change in our behavior requires both time and a steely resolve. We can only develop financial character one action at a time. Here are seven practices to take you from pauper to prince or princess if you add one each year.
Most investors are not aware of a critical division of professionals in the world of financial services. This distinction lies between fee-only fiduciaries who are free to act in your best interests and commission-based agents and brokers who are required to act in the best interest of the companies that employ them.
If you have a personal umbrella insurance policy, congratulations. If you don’t, you must not have a lot to lose. This important insurance can extend your liability coverage beyond your home and auto insurance by millions of dollars.
Everything in wealth management begins with savings. All wealth comes from producing more than you consume. Unfortunately, most Americans are better at consuming than producing.
Many U.S. investors crowd their assets into a combination of large-cap U.S. stocks and U.S. bonds. This allocation represents only one and a half of the six asset classes described here.
Imagine that your doctor shocks you with the news that you only have 24 hours to live. Notice what feelings arise as you confront your very real mortality. Ask yourself: What did you miss? Who did you not get to be? What did you not get to do?
“Imagine that you visit your doctor, who tells you that you have only 5-10 years to live. You won’t ever feel sick, but you will have no notice of the moment of your death. What will you do in the time you have remaining? Will you change your life and how will you do it?”
Life planning takes a holistic look at what you truly value. And for most people, their life is more important than their money. Only after exploring your life goals can you structure your finances to help you realize your dreams.
Tax credits are much more valuable than tax deductions. Deductions only reduce the amount you are taxed on. One dollar of deduction might only be worth 35 cents. In contrast, tax credits are a dollar-for-dollar reduction in your tax bill. And a refundable tax credit could mean the government will owe you money you never paid in the first place.
A professional tax expert can help you get the correct deductions. But he or she likely won’t motivate you to keep the right records unless you understand the benefits for yourself.
Retirement planning consists of a wild scatter plot of potential projections. Navigating successfully through possible outcomes requires regular corrections and adjustments.
The most common request we get is for a back-of-the-napkin calculation of future yield, interest or income. But rather than being a conservative withdrawal rate, this strategy may actually lead people to spend too much.
A few months ago Bill Gross, co-founder of PIMCO and the country’s most prominent bond expert, singled out those countries heaping significant deficits on their mountain of debt and called them “The Ring of Fire.” We recommend that you reduce your investments in these countries.
Thousands of investment advisors recommended stop loss orders to their clients. Now it looks like this advice may have been the cause of the May 6, 2010 market plummet.
Your investments should be working for you, appreciating more than inflation to become an engine of growth that pays you money and provides some measure of financial freedom.
In 1977 economist Milton Friedman wrote an article “The Line We Dare Not Cross: The Fragility of Freedom at ‘60%.'” We are in danger of crossing that line.
All assets are not equal. Some investments appreciate better on average than others.
Sometimes we make the mistake of deliberately budgeting the impossible. If you purposefully set the required spending in one category too high, you won’t be able to trim other categories to bring your overall spending into harmony.
Many budgets are doomed to failure because of the challenge of planning for unplanned spending. Here are some of the items you either did not put in your budget or they shouldn’t be in your spending.
Get control of the spending that breaks the bank. Certain purchases that are typically both unnecessary and unplanned are budget busters. Avoiding these financial slips requires hedging some of our worst impulses and constraining our desire for instant gratification.
No matter how rich or poor you are, thrift is an integral part of your budget. Being thrifty is a godly and biblical virtue.
A thoughtful estate plan can make your heirs’ lives easier. But it is your parents’ estate planning that will make your life easier.
Your estate plan can make your heirs’ lives easier. But it is your parents’ estate planning that will make your life easier.
“There ain’t no such thing as a free lunch.” As early as 1938, this phrase was touted as “economics in nine words.”
My youngest is a first-year student at the University of Virginia. My coauthor Matthew’s youngest child was born only a month ago. There is no such thing as saving too early.
If you’re not an economist, you may vastly underestimate the negative impact of taxes on the U.S. economy.
No one approaches financial planning with the goal of paying more taxes. Tax management, like all financial planning, is based on the premise that small changes made over time can achieve big goals.
Both mindless eating and mindless spending rely on our subconscious need to follow scripts to pace our consumption. Community plays a huge role in regulating our financial destiny–either a path of savings that builds real wealth or a path of spending that leads to impoverishment.
We all think we can’t be fooled by something as obvious as the the difference between height and width. But our brains are wired that way, without exception.
Retirement planning is even more crucial for women than for men.
Volatility, therefore, is a matter of perspective. Like the crack of a whip.
Diversifying your asset allocation among investments with a low correlation can and should reduce your portfolio’s volatility and boost your returns. But critics are claiming this strategy is no longer valid. That’s because they don’t understand the nature of what happened in 2008.
We call the difference between the market return and typical investor returns the “termite gap.”
Identity theft is becoming distressingly common as personal information becomes easier to swipe.
There will always be swindlers masquerading as investment advisors. You can learn to recognize such people by their over-the-top lifestyle.