AdviceIQ Articles

  • Illusions That Hinder Saving

    Submitted by Rick Adkins on Tue, 09/25/2012 - 12:00pm

     
    People’s illusions about money hurt them, whether believing they have plenty of time before worrying about saving, or that they can spend lots of money now on consumption because the future will take care of itself.
     

  • Pay Off My Mortgage Early?

    Submitted by Benjamin Hayes on Tue, 09/25/2012 - 9:00am

    Unlike credit cards and auto loans, which have high interest rates and little tax benefit, it isn’t always best to pay off your mortgage as soon as possible.
     
    You can retire the mortgage early and avoid paying years of interest to a lender by making extra payments, increasing your payment over the minimum or paying it off with one lump sum.
     
    Here are a few things to consider when deciding whether to pay off your mortgage ahead of schedule or to just make the minimum payments.
     
    Why Not to Do It: Opportunity Cost
     

  • Investment Fees: How Much?

    Submitted by Andrew B. Chou on Mon, 09/24/2012 - 3:00pm

    Minimizing investment cost is one of the basic tenets of sound investing, and critical to achieving long-term financial success. After all, every dollar paid in fees or trading commissions is a dollar less of potential return. So to avoid overpaying, it’s important to understand the fees involved.
     

  • Hedging Against Inflation

    Submitted by Todd Jones on Mon, 09/24/2012 - 12:00pm

     

    Inflation is the silent killer to portfolio returns over time. Investors have to work hard to make sure that the money they save doesn’t erode. Fortunately, there are tried and true methods for hedging against inflation through commodities and inflation-protected securities.

  • Adjustable or Fixed-Rate?

    Submitted by Gary R. Anderson on Mon, 09/24/2012 - 9:00am

     
    If you are buying a home, one of the biggest decisions is whether to go for an adjustable or fixed-rate mortgage. The first is usually cheaper at the outset but may get a lot more expensive in the future. The second gives you the assurance of an unchanging rate.
     
    Many factors go into deciding which is best for you. Here are some important things to know before you pick:
     
    Adjustable-Rate Mortgage
     

  • High-Yield Stocks: Too Late?

    Submitted by Raul Elizalde on Fri, 09/21/2012 - 3:00pm

     
    Dividend stocks are all the rage now. But many have downsides: They are more volatile than the broad market, and also underperform it.
     
    The steep decline in interest rates over the past few years leaves income-seeking investors with few options to generate a consistent cash flow. Institutional fixed-income investors seek returns by taking greater credit risk with high-yield bonds. Stocks that pay high dividends are increasingly popular, too.
     

  • Credit Score Up, Wealth Up

    Submitted by Kimberly J. Howard on Fri, 09/21/2012 - 12:00pm

     
    A better credit score can help you to increase your wealth and make your financial life secure in future. Here’s how you can improve your score – and why you should.
     
    People who are regarded as safe consumers get much better treatment from finance companies, auto lenders, credit card companies, banks, landlords and utility service providers. They evaluate you, and thus decide your creditworthiness and financial stability, entirely on your FICO score, the widely used risk metric.  
     

  • Investors and Central Banks

    Submitted by Adam D. Koos on Fri, 09/21/2012 - 9:00am

     
    What do the twin announcements of Federal Reserve and European Central Bank stimulus mean to investors? In the short run, stock rallies. In the long run, inflation, perhaps more than is comfortable.
     
    My advice is to ride the market for now, but keep an eye on the Consumer Price Index. Then get defensive.
     

  • Old Records: Keep or Toss?

    Submitted by Francis St. Onge on Thu, 09/20/2012 - 3:00pm

     
    It’s cathartic to get rid of old documents. Cutting down the clutter in your life is a good thing. But what records should you keep? And how do you get rid of the unneeded ones?
     
    An overriding concern: You want to ensure your information – such as name, Social Security number and address – stays out of the hands identity thieves. Any old record bearing your private information should be shredded. Use a cross-cut shredder. The old-style straight-cut devices leave too much opportunity to piece together your data.
     

  • 6 Simple Financial Tips

    Submitted by Grant Webster on Thu, 09/20/2012 - 12:00pm

     
    Fall is upon us, a good time to get your financial life back on track. Here are six easy fixes that can really help you save for a better financial future.
     
    Check your beneficiary designations: Sure, you might have a nice life insurance policy or retirement plan, but when was the last time you took a look at who will inherit those funds? Probably around when you opened the account several years ago, right?
     

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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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