Submitted by Robert Schmansky on Tue, 03/19/2013 - 12:00pm
The Web has loads of free retirement calculators, and you can buy software that purports to chart how things may work out. Even some professional advisors swear by them. Don’t put your trust in these tools.
With all of the independent variables that go into a financial plan, they aren’t likely to play out as we hope.
I recently revisited the subject of modeling software while teaching an economics course. Someone in my class criticized advisors that do not use supposedly advanced software to project hypothetical outcomes for clients.
Submitted by Michael J. Searcy on Thu, 03/07/2013 - 3:00pm
Our culture glorifies consumer spending. Part of my job as a financial advisor is to rein in my clients’ enthusiasms that lead to hasty purchases harmful to their long-term financial goals. But that doesn’t mean I am simply a wet blanket.
There are ways to buy stuff that folks want without thwarting their futures. The key is to make plans that accommodate both near-term desires and future security. These are not mutually exclusive.
Submitted by Manisha Thakor on Wed, 03/06/2013 - 3:00pm
If you and your significant other aren’t financially compatible, it can put a major strain on your relationship and even lead to a breakup. How do you deal with that?
It’s very difficult for two people to run a household when their attitudes toward money clash. To avoid heartbreaking conflicts, you need to communicate with your partner about money and understand your partner’s behavior.
Submitted by Ken Weingarten on Thu, 02/28/2013 - 3:00pm
One of a financial advisor’s toughest jobs is to rescue people nearing retirement who can’t afford to retire. Flexibility and sacrifice are the solution, although neither is easy.
Consider a pair of clients that I began working with eight years ago. Larry was 60 years old, and Lois was 59. (These are not the clients’ real names.) They had a modest income, a very small investment portfolio and like many folks, a fair amount of liabilities including a mortgage, two auto loans and a small credit card balance.
Submitted by Robert Schmansky on Tue, 02/26/2013 - 12:00pm
You can save for retirement and chip away at debt. But you neglect to build a cash emergency fund at your peril. While cash doesn’t yield returns, it provides you with a crucial safety net.
Many investors, even very savvy ones, are asset rich and cash poor. To them, compared with paying down a mortgage at 4% or earning 10% in a mutual fund, having cash sit in the bank just isn’t an attractive idea.
Submitted by Sterling Raskie on Thu, 02/21/2013 - 9:00am
As an advisor, I sometimes need to play marriage counselor. Money differences are one of the biggest sources of marital discord. Recently, I resolved a key disagreement that divided a couple. The answer: Let each spouse have his and her own bank account.
The couple – let’s call them John and Jane Bickerson – is nearing retirement, and sat down with me to look at their cash flow needs, possible dates to quit working and the ever-present question, “Do we have enough?”