AdviceIQ Articles

  • Social Security: Not Doomed

    Submitted by Michael Kitces on Tue, 05/01/2012 - 3:00pm

    Scary headlines to the contrary, Social Security won’t go bust in two decades. Pessimists point to the government’s recent report that the Social Security trust fund will be depleted by 2033, three years sooner than previous projections. In the worst-case scenario, retirees will still get almost all of their checks.
     

  • Taxes Don’t Favor the Rich

    Submitted by Rick Kahler on Tue, 05/01/2012 - 12:00pm

    Recent discussion of the "Buffett Rule" proposal, which would increase taxes on the wealthy, has focused attention on U. S. tax rates. It gives Americans a chance to better understand our tax policies. The plain truth: The more money you make, the more tax you pay.
     
    My intention in this column is not to make a political point. My intention is to dispel a myth that the tax code favors the rich; hence, why try to better yourself? One destructive conclusion stemming from such a belief is to equate the tax code with capitalism, which is comparing apples to lemons.
     

  • Market Correction Ahead

    Submitted by George Clausen on Tue, 05/01/2012 - 9:00am

    The U.S. stock market moved up again last week after two weeks of decline. That sounds like what’s called a trading range – stocks fluctuate a percentage point up or down, but basically build no trend. Don’t be fooled. We are heading into a correction, defined as a slump of at least 10%.
     
    Why is that, and what can investors do about it?
     

  • What to Invest In, and Not

    Submitted by Andrew B. Chou on Mon, 04/30/2012 - 3:00pm

    The classic investor questions are: Where is the market going, and what can I do about it? Get ready for lower U.S. corporate margins, a dropping dollar and opportunities in industrial materials and utilities.
     
    First, let’s examine where we have been.
     

  • 4% Retiree Withdrawal?

    Submitted by Raul Elizalde on Mon, 04/30/2012 - 12:00pm

    One of the best known strategies to avoid running out of money in retirement is the 4% rule: Every year you take 4% of the portfolio’s initial value, adjusted for inflation, and have a reasonable expectation that your assets will last. That plan has serious flaws, though.
     

  • Seeking Earnings Growth

    Submitted by Peter A. Delgado II on Mon, 04/30/2012 - 9:00am

    Earnings are the lifeblood of the stock market. Stocks move in response to real or perceived earnings changes. The trick is to find those whose earnings growth is strong, and should remain strong.
     
    This year’s first quarter has shown surprising vigor. With half the companies in the Standard & Poor’s 500 reporting, earnings increases should average 6.3% from a year earlier, according to S&P Capital IQ. When fast-growing Apple is removed from the calculations, the rise is 4.2%, still a pretty good number.
     

  • Affording Long-Term Care

    Submitted by Patrick Moyneur on Fri, 04/27/2012 - 3:00pm

    Long-term care insurance is vital for retirees, but the costs keep mounting. Last year, they rose between 6% and 17%, according to the American Association of Long-Term Care Insurance. But there are options you can choose to keep LTC coverage for less.
     
    Some of retirees’ greatest fears are running out of money, dying or ending up in a nursing home. The overwhelming fear is being a financial burden on their family.
     

  • Where Is the Inflation?

    Submitted by Joseph A. Clark on Fri, 04/27/2012 - 12:00pm

    Remembering the 1970s, some politicians warn that the government is printing billions upon billions of dollars, and that this will lead to hyperinflation. But it hasn’t shown up yet. Give it time. Inflation will hit us eventually.
     
    When it does, get ready to reshape your investments and your spending to ever-higher prices.
     
    Each month, when the Bureau of Labor Statistics (BLS) releases the Consumer Price Index—the government’s primarily tool to measure inflation—it has remained at manageable levels, most recently at 2.7%.
     

  • Planning Marital Finances

    Submitted by Lee Baker on Fri, 04/27/2012 - 9:00am

    Most people hear the word wedding and immediately think of flowers, rings and white dresses. They should spend more time thinking about finances. A marriage doesn’t just bond two people’s personal lives. It also links their financial futures.
     
    Earlier this year, two of my clients, Timmy and Lailah, announced their engagement. Knowing the financial challenges that matrimony can bring, I recently talked to Timmy over lunch, and I chatted with Lailah over the phone. The ceremony is now just three months away, and most of their attention is focused on wedding details.
     

  • How to Refinance Your Home

    Submitted by John Orlando on Thu, 04/26/2012 - 3:00pm

    The Federal Reserve is doing you a big favor, keeping interest rates low. That means you can refinance your old high-rate mortgage. But how do you go about this?
     
    Not everyone can qualify for a new mortgage. If some of your payments were delinquent or your home is underwater, for instance, you may have a problem. And not everyone should refi. You have to be sure it makes economic sense for you.
     
    Some factors to weigh:
     

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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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