AdviceIQ Articles

  • Don’t Overpay Bond Taxes

    Submitted by Russell Francis on Thu, 05/09/2013 - 3:00pm

    It’s easy to overpay or underpay taxes on your bond income and not even know it. Bond taxation is complex and there are several considerations that require different tax treatments. You need to be careful to avoid surrendering too much to the tax man, especially if you invest in zero-coupon or state bonds.

    If you purchased a bond at par, also known as face value – 100 cents on the dollar – and held it to maturity, it is fairly simple. If it’s a taxable bond, you pay income tax on the coupon (interest) income. If it’s a tax-free municipal bond, you don’t.

  • Our Bad Ideas About Money

    Submitted by Hilary Martin on Thu, 05/09/2013 - 12:00pm

    Language shapes people’s thoughts and actions around money, and sometimes leads to destructive behavior. Identifying and understanding your own language about money can help you make positive changes to your behavior and understand other people better.

  • Avoid Medicare Advantage

    Submitted by Matthew Illian on Thu, 05/09/2013 - 9:00am

    Medicare Advantage has disadvantages that make healthcare more expensive for seniors. Recent changes to the laws such as Obamacare are likely to raise costs. Most retirees are better off with regular Medicare.

    Medicare Advantage (MA) is an option that replaces Original Medicare parts A (hospital care) and B (doctor visits) and often includes part D (Rx coverage) as well; it goes through a private operator, while the government runs part A, B and D.

  • Turbulent Market? Try Options

    Submitted by Ara Oghoorian on Wed, 05/08/2013 - 3:00pm

    The stock market’s future is unknowable. But amid periodic market jolts due to Europe and the like, you can buffer your portfolio from downturns or take advantage of possible price spurts. You employ a time-honored method that too few individual investors understand – options.

    An option is a standardized contract to either buy or sell a stock at a pre-determined price on a specific date. Unlike simply buying and selling stocks, options present less risk because you don’t lose as much money if your intuition fails you.

  • Spring Cleaning for Finances

    Submitted by Roger Wohlner on Wed, 05/08/2013 - 12:00pm

    Spring is traditionally the time to clean the garage and to get the yard in shape. It’s also a great time to clean up your investment portfolio. Fresh off tax season, this is a perfect opportunity to get rid of clutter, review your asset allocations and make the necessary changes if your portfolio has strayed from your financial plan.

    Here are seven steps to making your portfolio cleaner and more efficient.

  • Avoiding Student Aid Blunders

    Submitted by Hilary Martin on Wed, 05/08/2013 - 9:00am

    Filing for student aid is filled with pitfalls. Key to the process is a form called the Free Application for Federal Student Aid (FAFSA), which is your family’s only ticket to federal, state and institutional aid, student loans and merit-based and athletic scholarships. Many make very expensive mistakes on the form, or even neglect to file it at all.  

  • The Art of Frugality

    Submitted by Rick Kahler on Tue, 05/07/2013 - 3:00pm

    People who successfully build wealth have one trait in common: They understand the art of frugality.

    These unassuming millionaires know how to live on much less than they make, and they know how to save money. But those behaviors alone aren't enough. Not spending money today does not always result in having more money tomorrow.

    Frugality for its own sake can result in doing without things that matter to you, failing to take care of basic needs like your health and living with a sense of deprivation. It can also lead to spending more money, not less, in the long run.

  • How to Handle an Inheritance

    Submitted by Hilary Martin on Tue, 05/07/2013 - 12:00pm

    An inheritance can improve your financial future, but too many people fail to plan adequately, reject the advice of professionals and make tragic mistakes.

    If you plan appropriately for your inheritance, you can ensure that you maximize its value and honor the intentions of the loved one who left it to you.

    Here are four things to think about if you expect or recently received a bequest from a loved one. The right planning can bring peace of mind and freedom from regret about your financial choices and make a lasting impact on future generations.

  • Social Security: Safe for Now

    Submitted by Kimberly J. Howard on Tue, 05/07/2013 - 9:00am

    Last month, President Barack Obama gave retirees a scare with a proposal that reduces pensioners’ income from Social Security. The good news is that his plan was dead on arrival due to Washington’s epic gridlock. We don’t need to fear for Social Security for now, but can’t be safe forever.

  • The Cost of Taking a Year Off

    Submitted by Blair Hodgson D... on Mon, 05/06/2013 - 3:00pm

    With a little planning and saving, you can create your own sabbatical, although it doesn’t come cheap. How much does it really cost to quit your job for a year?

    Before you start daydreaming, you need to calculate how much money to save before you leave the job. The answer is different for everyone, but this example should give you an idea of the expenses you need to cover.

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SMART ADVICE

 

A Tragic Mistake: ‘I Don’t Need Help Handling my Money’

 

By Larry Light, Editor-in-Chief

May 1, 2013

 

We all like to think we’re smart and self-sufficient. A lot of folks believe they can manage their financial lives by themselves. These do-it-yourselfers are woefully wrong.

 

AdviceIQ is about giving the world the wisdom of smart, honest (none can have any regulatory infractions) advisors. Are we blindly pro-advisor? No, we are clear-eyed about being pro-good advisor. Everyone, even the financial cognoscenti, should have such a helper to sort out life’s perplexities.

 

Lamentably, the financial crisis and the Bernard Madoff scandal convinced many to steer clear of advisors. According to a Deloitte consulting firm study, 57% of those polled say they’re more comfortable handling their retirement planning on their own. Plus, 38% contend they need no professional advice to plan.

 

Really? A story from Paul Sullivan shows how wrong-headed they are. Sullivan is enormously well-versed in personal finance, which he writes about for the New York Times. But it turns out that even he could use some help with his portfolio. One day he went before Tiger 21, an investment club of very wealthy (with at least $10 million in net worth) types who assessed his financial situation. To Sullivan’s surprise and dismay, the group found major holes: He and his wife didn’t have enough insurance, they carried an unneeded vacation home and spent too much.

 

The blasé DIY attitude vexes Edmond Walters, founder and chief executive of eMoney Advisor, which provides support services to advisors. He watches discount broker TV ads that promise you can direct your investments by yourself, without paying an advisor. “It’s dangerous,” he says. “The ads say you can come home after work and spend a couple of hours trading a month. But the professionals have a lot more information than you.” Result: You get slammed.

 

As the Times’ Sullivan attests, it’s good to have a more knowledgeable someone guiding you, an expert who keeps up with all the arcane changes in the financial arena. Do you know how much disability coverage you need? Are you saving adequately for your kids’ education? How much money are you wasting for no good reason? Will your investments support you through your retirement?

 

Walters spent almost two decades as an advisor before he started his current company. “But,” he says, “even I have an advisor.”

 

 

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