Read Doug’s articles originally printed in The Jerusalem Post.
One of the most common side effects of receiving an inheritance is anxiety. This can be caused by the desire to honor the memory or wishes of the deceased or fear of making a financial mistake. It should be comforting to have more money, but sometimes the cash infusion only increases financial worries.
Too much choice can be scary
Sometimes, beneficiaries feel overwhelmed by choice. They wonder if they should:
- Invest the money or spend it.
If I asked you, “How much money do you want to lose in a risky investment?” you would probably think this was a strange question. However, you must consider the risks before you invest.
When you put money in the stock market you give up the certainty in return for the potential reward of growth. By choosing a risky investment, you bet that the potential for high profits is greater than the possibility of losing your money…. Read more
What happens to your finances if you suffer from memory loss?
Memory loss can have negative financial repercussions beyond not knowing where you misplaced your checkbook.
Time to hand over the reins
If someone you love finds it hard to remember things, financial tasks may slip through the cracks. Not paying bills in a timely manner could incur late penalties, and not watching your investments could mean lost opportunities to realize gains or prevent losses.
One of the worst problems with memory loss is that it causes vulnerability and exposes you to a greater possibility of being a victim of financial fraud or elder abuse…. Read more
My clients, “Mr. and Mrs. Generous” and “Mr. and Mrs. Enablers,” both wanted to help their children. As their financial advisor, I told one couple that it was fine to help their daughter on a regular basis. But I advised the other couple to stop helping their son as they were enabling him to continue with bad financial habits. Here’s why:
Helping vs. Enabling
While most parents want to help their children, there’s a difference between training them to become independent adults versus giving them a monthly allowance even when they are married with children…. Read more
Dividend-paying stocks can provide steady income in the form of regular quarterly cash payments. Two ways investors earn a return on a stock investment are capital appreciation and dividend payments. Ideally, you want your stock to appreciate in value, but if it doesn’t, an income-paying stock still provides you with regular income, like a paycheck. (Don’t forget that the initial investment carries the risk of the principal amount declining in value.)
Do dividend-paying companies perform better?… Read more
Simple investments can help increase your returns.
When Confucius said, “Life is really simple, but we insist on making it complicated,” he could have been alluding to the fact that using complicated investing strategies can reduce your overall performance. Simple investment strategies (like diversification and dollar-cost averaging) may have the best chance to lead to long-term success.
While it can be tempting to try timing the market, it’s impossible to predict the market’s movements. In fact,… Read more
If you have elderly parents or other loved ones, there are concrete steps you can take to make sure they stay financially safe. While we may think of a stranger as the “bad guy,” sadly, some caregivers (even relatives) exploit an older person’s health situation for their own benefit.
Be alert for possible signs of financial abuse
- Changing a will or power of attorney with no explanation. Usually, the change takes place quickly and is kept secret.
If you are an American oleh, people may encourage you to open an investment account through an Israeli bank. But if you try to do so, as an American citizen, you will need to sign some very specific documentation.
Is the alphabet soup a deterrent: FATCA, FBAR, PFIC?
As a result of FATCA (Foreign Account Tax Compliance Act), foreign financial institutions (including Israeli banks) are required to report to the IRS on assets held by their U.S…. Read more
“If you spend that amount of money from the inheritance you just received,” I told a client a few years ago, “it’s going to vanish over time.” Guess what? It did. This client spent hundreds of thousands of dollars and had nothing to show for it, other than feelings of regret. Even if you’re lucky enough to receive millions of dollars, if you spend it rashly, you’ll run out of money. But, if you invest (even a small sum) wisely,… Read more
High volatility is a headline grabber. The media seldom writes about a ho-hum day in the markets. Skewed headlines create fear in investors who have an exaggerated view of market instability.
Volatility is a measure of how much a stock price fluctuates.
High volatility stocks have wider fluctuations in prices, providing higher potential returns but also higher possibilities of losses. Low volatility stock prices tend to be steadier and more predictable, providing lower potential risk and also lower returns…. Read more