There’s a 100% chance you will die. Permanent life insurance is priced accordingly.
FOR MANY YEARS, I didn’t own bonds or anything similar, except some bank certificates of deposit. Frankly, I was clueless.
My first dilemma: Should I invest in bonds if I have a mortgage? It didn’t make sense to me to borrow from the bank and, at the same time, lend out my money at a lower interest rate to a bond issuer. I felt I should pay off my mortgage first. A few friends and even a financial advisor recommended otherwise.
I’M GUESSING our credit cards are excited. It’s the holidays, so they’ll get to see the light of day more often. December is a time for spending, for throwing caution to the wind, for rationalizing what we and our children need or deserve. It doesn’t help that we’re barraged with advertising tugging at our heart strings.
Perhaps it’s time to counterattack, to apply logic and to think not about the joys of Christmas morning presents or the next Chanukah gift,
TRADITIONAL or Roth retirement accounts? Below are eight key questions to ask. Your decision should be based on your answers to these eight questions—including the importance you put on each.
Do you want a tax break now? Assuming you qualify, a traditional IRA allows you to deduct your contributions, resulting in a lower taxable income for the year. Ditto for tax-deductible contributions to an employer’s 401(k) or 403(b) plan. But with Roth accounts, you don’t get this tax benefit.
BEEN DISTRACTED by Thanksgiving? Maybe it’s time to catch up on your reading—by checking out last month’s seven most popular articles:
Are you on Medicare and own a Medigap policy? James McGlynn argues that Plan G is the way to go—assuming you can qualify.
“There’s no need to think about my money because, according to Carl, I’m not going to run out,” writes Dennis Friedman. “For the first time in my life, I realize I’m financially secure.”
IF THE NAME Harry Browne doesn’t ring any bells, I’m not entirely surprised. Though he was twice a presidential candidate, he never captured more than 1% of the vote. Still, to my knowledge, Browne is the only financial advisor ever to run for the White House.
As a Libertarian, some of Browne’s economic proposals were extreme—including, for instance, abolishing income taxes. But one of his ideas has stood the test of time: In his 1981 book,
WE ALL DO things that make us feel good right now, but which aren’t so good for us over the long haul. Yes, even me. Yes, even you.
Some of this behavior stems from hardwired instincts passed down to us from our hunter-gatherer ancestors, like our tendency to consume whenever we can and to focus too much on today, while giving short shrift to tomorrow. Other damaging behavior is the result of habits we’ve developed,
HOW DID the top-performing quartile of U.S. stock funds for the five years through September 2014 fare over the subsequent five years? Depending on the category, just 26% to 30% managed to stay in the top quartile, says S&P Dow Jones.
NO. 13: FACED with an unknown future, we should diversify our investments, buy insurance, keep some cash—and accept that, in retrospect, these precautions will often seem unnecessary.
NO. 99: A REAL ESTATE agent’s greatest financial incentive isn’t to get us the best price, but to get us to act quickly. If we spend an extra month hunting for the right house to buy—or holding out for a higher price if we’re looking to sell—the agent might make little or no additional commission, but he or she will have to put in substantially more work.
DON’T BUY a distribution. Toward year-end, stock mutual funds—especially active funds—can make large distributions, on which you’ll owe taxes if you hold the fund in a taxable account. This shouldn’t stop you from making a regular monthly investment. But if you’re looking to add a big sum to a fund, find out the distribution’s size—and, if it’s large, consider delaying.
MORAL HAZARD. When we know someone else will pick up much or all of the financial tab, it’ll often change our behavior. For instance, those with health insurance are quicker to seek medical help, while those with long-term-care insurance are more inclined to enter nursing homes. The downside of this moral hazard: It means insurance costs more.
FOR MANY YEARS, I didn’t own bonds or anything similar, except some bank certificates of deposit. Frankly, I was clueless.
My first dilemma: Should I invest in bonds if I have a mortgage? It didn’t make sense to me to borrow from the bank and, at the same time, lend out my money at a lower interest rate to a bond issuer. I felt I should pay off my mortgage first. A few friends and even a financial advisor recommended otherwise.
I’M GUESSING our credit cards are excited. It’s the holidays, so they’ll get to see the light of day more often. December is a time for spending, for throwing caution to the wind, for rationalizing what we and our children need or deserve. It doesn’t help that we’re barraged with advertising tugging at our heart strings.
Perhaps it’s time to counterattack, to apply logic and to think not about the joys of Christmas morning presents or the next Chanukah gift,
TRADITIONAL or Roth retirement accounts? Below are eight key questions to ask. Your decision should be based on your answers to these eight questions—including the importance you put on each.
Do you want a tax break now? Assuming you qualify, a traditional IRA allows you to deduct your contributions, resulting in a lower taxable income for the year. Ditto for tax-deductible contributions to an employer’s 401(k) or 403(b) plan. But with Roth accounts, you don’t get this tax benefit.
BEEN DISTRACTED by Thanksgiving? Maybe it’s time to catch up on your reading—by checking out last month’s seven most popular articles:
Are you on Medicare and own a Medigap policy? James McGlynn argues that Plan G is the way to go—assuming you can qualify.
“There’s no need to think about my money because, according to Carl, I’m not going to run out,” writes Dennis Friedman. “For the first time in my life, I realize I’m financially secure.”
IF THE NAME Harry Browne doesn’t ring any bells, I’m not entirely surprised. Though he was twice a presidential candidate, he never captured more than 1% of the vote. Still, to my knowledge, Browne is the only financial advisor ever to run for the White House.
As a Libertarian, some of Browne’s economic proposals were extreme—including, for instance, abolishing income taxes. But one of his ideas has stood the test of time: In his 1981 book,
WE ALL DO things that make us feel good right now, but which aren’t so good for us over the long haul. Yes, even me. Yes, even you.
Some of this behavior stems from hardwired instincts passed down to us from our hunter-gatherer ancestors, like our tendency to consume whenever we can and to focus too much on today, while giving short shrift to tomorrow. Other damaging behavior is the result of habits we’ve developed,
HOW DID the top-performing quartile of U.S. stock funds for the five years through September 2014 fare over the subsequent five years? Depending on the category, just 26% to 30% managed to stay in the top quartile, says S&P Dow Jones.
NO. 13: FACED with an unknown future, we should diversify our investments, buy insurance, keep some cash—and accept that, in retrospect, these precautions will often seem unnecessary.
DON’T BUY a distribution. Toward year-end, stock mutual funds—especially active funds—can make large distributions, on which you’ll owe taxes if you hold the fund in a taxable account. This shouldn’t stop you from making a regular monthly investment. But if you’re looking to add a big sum to a fund, find out the distribution’s size—and, if it’s large, consider delaying.
NO. 99: A REAL ESTATE agent’s greatest financial incentive isn’t to get us the best price, but to get us to act quickly. If we spend an extra month hunting for the right house to buy—or holding out for a higher price if we’re looking to sell—the agent might make little or no additional commission, but he or she will have to put in substantially more work.
MORAL HAZARD. When we know someone else will pick up much or all of the financial tab, it’ll often change our behavior. For instance, those with health insurance are quicker to seek medical help, while those with long-term-care insurance are more inclined to enter nursing homes. The downside of this moral hazard: It means insurance costs more.