Category Archives: Financial Planning

The Value of Diversification

 

It’s not always easy to grasp the value of diversification—why, in other words, it’s better to own many stocks inside a mutual fund than one or two stocks on their own.  But recent research conducted by Arizona State U. finance professor Hendrik Bessembinder offers some insight.

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Inflation Impact

We all know that inflation gradually erodes the value of our dollars, and you’re probably aware that this is one of the main reasons for investing in the stock market.  If you hide your money safely under your mattress, it becomes incrementally less valuable each year depending on the inflation rate.  To keep pace, you have to find ways to make it grow at least as fast as the value of a dollar is falling.

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What NOT To Skimp On

Save and invest.  Save and invest.  Isn’t that all you hear when it comes to planning your financial life?

An online article by an individual who refers to himself as “the Financial Samurai” makes a more balanced case regarding how you deploy your money.  Yes, you should be capable of deferring gratification and have a healthy savings rate during your accumulation years.  But there are a few items that are well worth investing in: your comfort, well-being and certain aspects of your lifestyle.  Some of these items might be considered luxuries by people who are perhaps overly frugal.

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Gender differences—In Retirement

 

You may have read that women are far more likely to face poverty in retirement than their male counterparts—but you may not realize just how big the disparity is.  In fact, women are 80% more likely to fall into poverty toward the end of their lives, compared to men, according to a 2016 study by the National Institute on Retirement Security.

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Common Estate Planning Mistakes

The most common way to transfer assets to your heirs is also the messiest: to have a will that is so out of date that it doesn’t relate to your property or estate, to have your records scattered all over the place, to have social media, banking and email accounts whose passwords only you can find—and basically to leave a big mess for others to clean up.

Is there a better way?

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The Economic Myth-Destroyer Gets His Due

Imagine a person who always, in every circumstance, makes rational decisions with his money.  He saves when he ought to and spends exactly as he should spend, in order to maximize the “utility” of whatever wealth he happens to possess.  He defers gratification with ease.  When he invests, he has instant and total access to all possible information related to every item in his, including the details of every company’s financials and any impactful world events, even if they haven’t reached the news media yet.  If he found a $100 bill on the sidewalk, he would immediately go out and invest it in a steel mill.

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If you expect to get Social Security, this is the one thing you need to do in the aftermath of the Equifax data breach

The financial exploitation of seniors is already a problem. And now with the massive data breach by Equifax, it’s just one more thing to concern the elderly. Many people are scrambling trying to put in place credit freezes to prevent identity thieves from opening up credit in their name.

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