The “three-legged stool” approach to retirement – a traditional pension, social security, and individual savings plans – is not necessarily stable anymore. Instead of depending on an increasingly cash-strapped government or pension plans with portfolio managers whose actual investment results may fall short of your anticipated benefits, perhaps it’s time to look inward…. Read more
Personal Finance
Does Your Financial Plan Include a Visit to the Mechanic?
Financial planning, and its emphasis on long-term cash flow and preparing for the unknown, extends beyond the realm of your bank account and investment portfolio. It’s a mindset, a way of looking at the world.
For instance, the backseat locks of my car haven’t been working properly. … Read more
Why You Should Keep Your Receipts
Recently one of our guests was on her way to toss her used bus ticket into the garbage can when Yosef, my pre-teen son, politely suggested that she keep her receipts. “Why?” she asked. “So this way you’ll know how much you spend on the important things and you’ll know how much you have left to spend on the fun things,” he answered. … Read more
Marrying Off Your Children
Congratulations on the big news: your child has announced his or her engagement. Perhaps you’d like to use the following letter to express some thoughts on money and financial security to the blissful young couple:
Dear ______ and fiancé/e,
We are thrilled that you have found someone to live with happily ever after…. Read more
It’s Never Too Early
As the medical adage goes, “an ounce of prevention is better than a pound of cure.” This expression rings true when it comes to personal finances, too. As any financial professional might tell you, people who are deep in debt due to bad spending habits find their bad fiscal habits extremely difficult to change…. Read more
Don’t Gamble Unless You Can Afford to Lose
How much risk can you comfortably afford to take with your investment portfolio?
The answer depends on three things:
The size of your safety zone.
Zvi Bodie, a finance professor at Boston University, says the assets that cover your needs (as opposed to your wants) should be a “safety zone” and invested more conservatively than the rest of your portfolio…. Read more
Living Too Long is a Financial Disaster
I frequently joke with financial planning clients that dying young increases the success of a plan, since it means life-savings need to last for fewer years. However, since there isn’t a way to accurately predict lifespans, it’s prudent to take a longer lifespan into consideration when planning. Better be safe than to run out of money!… Read more
The #1 Wrong Reason to Make Investment Decisions
Have you ever stopped to think what motivates your investment decisions? For example, do you hold onto a particular stock because you received it as an inheritance and don’t want to sell it? When the market drops, do you find yourself automatically selling all your stocks to protect you from a potential market crash?… Read more
Is There a Better Way to Monitor Financial Success than Measuring Your Net Worth?
Hopefully, as time goes on, your net worth will increase. However, monitoring your liquid net worth may not be the best way to track your financial progress. This is because savings for a real-estate purchase or other large ticket items can skew the picture. Is it really fair to include savings in your net worth when it may already be “spoken for?” If you buy a $30,000 car,… Read more
Don’t Let Retirement Creep Up on You
Sometimes we are so busy living our lives that we don’t notice the years going by. Suddenly, the “baby” starts high school and the soldiers look younger every day. Before you know it, it will be time to consider retirement.
The main problem with not noticing the years going by is that retirement can creep up on you and catch you off guard. … Read more
