The Sun Doesn’t Always Shine We now have a solar roof and it takes care of our electrical needs on sunny days but the sun doesn’t always shine. At night, our panels rest. During storms and very cloudy days, the panels aren’t at peak efficiency. Yet when it comes to personal finances, I generally come across people whose planning assumes that the sun will always shine. Many of these people are do it your selfers where one partner in a … Continue reading
During the tumultuous political climate of the last five years, nothing has been more contentious than the U.S. budget deficit and government spending. While Congress and the Administration have been fighting tooth and nail over this, shutting the government on several occasions and forfeiting the country’s AAA bond rating, something surprising has happened. Both sides are bracing for a possible government shutdown again this fall and no one seems to notice that the deficit is fast disappearing. Today, The New … Continue reading
Index Funds have attained a near untouchable status among the financial press and investors. And for good reason. The funds — at least the highly diversified ones — are regularly among the top long-term investments. Recently, a Bloomberg article took an opposite tack, bashing index funds for being mindless machines that let nimble investors exploit their announced intentions. The article is harsh but accurate. Index funds are predictable and not perfect investments but they do serve many investors well. There … Continue reading
An Important Move My friend Bob has an important rule that comes out of the school of hard knocks. He says that if you can do a transaction that is life-changing, you must do it. It’s not optional; it’s mandatory. Most of us never have a chance to grasp the brass ring. How tragic is it for someone to have the opportunity and let it slip away. With the economy in lousy shape for the last five years, most of … Continue reading
Recently, a man accused of stealing from his corporate employer was arrested during an Appalachian Trail festival in rural southwestern Virginia. While I was attending the festival, I was unaware of the fugitive or the arrest until a week later. Like most long-distance A.T. hikers, the man was using a trail name. I was interview about trail names and the A.T. by a reporter for the BBC website. Here is the link: Appalachian Trail and trail names … Continue reading
If there were a bond bubble, this is what it would look like: trillions of dollars of Eurobonds going for negative interest rates, the 10 year German bund yielding pennies and Mexico promising to pay back bonds in 100 years with an interest rate of 4 percent. More than half of the world’s government bonds are yielding less than one percent. We don’t have any experience with this kind of a world. We know it won’t last forever but we … Continue reading
Diminished Ability to Handle Personal Finances As people age, they gradually lose their ability to handle their own finances. Often, this process is so gradual that the person himself and those around him are unaware of what’s happening until something serious happens. The elderly control the most assets and are the most susceptible to financial scams and poor choices. As people get older, their financial affairs often get more complex. They must deal with complex choices on healthcare, long-term … Continue reading
Protecting Against Financial Scams Financial scams are getting much more sophisticated and are a growing problem. It’s easy for anyone to momentarily let down their guard and get nailed. It’s especially easy for the elderly. So much has changed in recent years and the elderly often have a tough time sorting out the legitimate advances from the smooth talking con artists. A recent study showed that the elderly who have been working with a financial advisor or some other trusted … Continue reading
Craving Certainty Recently The New York Times published an article about financial planning and how much people crave certainty. The result is that many financial plans have page after page of numbers and graphs and charts. The more numbers, the more confident people feel about the future. But these plans can be so overwhelming that many go unused. In the Times article, author and planner Carl Richards deplores this kind of false precision. He argues that for most people, the … Continue reading
Social Security Website Social Security retirement benefits is a more complex and important subject than most people realize. In retirement, Social Security typically accounts for one-quarter to one-half of retirement income. The size of those benefits is dependent on your 35-year work and earnings record as well as at what age you begin taking your benefit check, whether you have a spouse (and their age and record), other dependents, your work plans, and other factors. A good place to start … Continue reading