Today’s young professionals often begin their careers staring at a mountain of debt: student loans, car notes, credit card balances and not infrequently a mortgage. When constructing your personalized financial plan, a review of your debts and investment assets is the first step in answering the question: Should I use available income to pay down debt or should I invest it for the future?
Families who have determined that they’ve accumulated more wealth than they expect to spend in their lifetimes often approach legacy planning looking primarily for tactical help and technical expertise. They may come to the conversation simply seeking the specific tool or set of tools most appropriate for passing their wealth to heirs and charities with as little as possible lost to taxes or unwanted third parties.
The past few years have seen the U.S. Department of Education’s Public Service Loan Forgiveness (PSLF) program garner a whirlwind of criticism, from borrowers, watchdogs and lawmakers alike. Its complex and poorly communicated requirements have resulted in hundreds of headlines, several lawsuits, and thousands of heart-breaking personal accounts.
Here’s a quick tutorial for nongolfers; the rest of you skip to the next paragraph. The term “scratch” golfer refers to someone who shoots even par on average. A typical golf course has 18 holes. Each hole is either a par 3, par 4 or par 5. If a hole is a par 3, and you get the ball into the hole in three shots, you have made par and shot “even” on that hole. Most golf courses have a par of 72 for 18 holes. If you shoot 72, you have shot even par for the course.
We often let things go, even to our detriment, to avoid offending someone. This fear of offending can keep you in a bad relationship, keep you from making progress in your career or keep you from making sound financial and investment decisions.
Mark Twain once wrote, “The difference between the almost right word and the right word is really a large matter. ‘Tis the difference between the lightning bug and the lightning.”
Ever since December 3, 2018, when the yield curve inverted (with the yield of 2.83 percent on the five-year Treasury note one basis point lower than the yield of 2.84 percent on the three-year Treasury note), I have been receiving calls and emails from investors worried about the impact of an inverted yield curve. The reason they are anxious is the much-publicized relationship between inversions and recessions — inverted yield curves have predicted all nine U.S. recessions since 1955.
Marriage, it turns out, is even more than hefty emotional commitment, a blending of families, and the awesome chance to add another crazy aunt or uncle to your family tree. Specifically, when you are married, you become a single economic unit. Your partner’s successes are your successes; similarly, your partner’s debt or any fallout from a bad financial decision lands on your plate as well. Given what can be at stake financially, don’t let that all-important conversation about money get forgotten or postponed amid the excitement of your upcoming nuptials.
At the start of 2019, I compiled a list of predictions that so-called financial gurus had made for the upcoming year, along with some items I heard frequently from investors, for a consensus on the year’s “sure things.” The turn of the calendar means it is now time for our second quarter review. As is my practice, I will give a score of +1 for a forecast that came true, a score of -1 for one that was wrong, and a 0 for one that was basically a tie.
Been there, done that. You’ve visited the tropics, the mountains, the lake. You’ve sailed on a cruise and made the pilgrimage to Disney, perhaps each twice or more. Most were fun, restful—maybe even restorative or memorable.
I’ve been getting lots of questions about the benefits of international diversification. The questions are variations of “Why do I want to own these poorly performing investments that also create currency risk?”
When the subject of Social Security comes up during retirement planning conversations, both younger and older investors often greet it with a healthy dose of cynicism. Such discussions tend to include comments like, “Oh yeah, sure. If there’s even anything left for me” or “Isn’t Social Security going bankrupt?” Sometimes I hear a more draconian stance, like, “I just plan on it not being around when I’m retired.” This last viewpoint actually is quite common. According to a study by AARP, 65% of adults are not confident about Social Security’s future.
