financial planning

401(K) 2012 / Flickr.com https://tinyurl.com/y2osszzj

When you do a financial plan, where do you start?

Do you fund your retirement first or get out of debt? Is trying to save on taxes part of it? One marriage partner thinks you spend too much money on insurance, while the other worries that they are not sufficiently protected.

It can feel like you’re all over the map!

So back to the original question - where should we start?

My answer is to start with the most important thing – to you.

It is my contention that (1) you already have a financial plan, and (2) your plan is built around priorities.

GotCredit / Flickr.com https://bit.ly/2W0iyVQ

Did you get a tax refund this year?

 

Maybe you look forward to getting a tax refund every year. Maybe you pay off some credit cards with it, other times you take a little vacation, do a small home renovation project or make another large purchase.

It’s almost like a savings account, right? Or better, an annual bonus payment!

But then you have this know-it-alI friend at work that says you’re giving the government a free loan. Are they right?

Well, back when savings accounts were paying 5%, your friends had a point.

Youchao Wang / Flickr.com https://bit.ly/2Z3S3xJ

I am sometimes approached by young people, often recent college graduates, who want to know if I have any financial tips for someone their age.

If you’re a young college graduate and you’re already thinking about how to be financially responsible, congratulations on separating yourself from the crowd by doing two things most people your age often don’t: seek advice and think ahead.

QuoteInspector.com / FLICKR.COM https://tinyurl.com/ybdfzjb4

“I’m insurance poor!”

Whenever someone raises the twin topics of insurance and affordability, a little red flag goes up in my little brain.

In 99% of the cases I see, the problem is not affordability, but effectiveness. Will the coverage you have actually DO what you want it to DO when the car wrecks, or the house burns? The question you should be asking is, “What coverage can our family afford NOT to have?”

Predictions

Sep 12, 2018
Thomas Hawk / Flickr.com https://tinyurl.com/y8xhg4xu

Stop trying to aim at (and hit) a target you can’t see. Doing so usually results in harm to yourself or others.

Here’s a news flash: the future is really, really difficult to predict. For every economist pessimistic about the remainder of 2018, I can find you an optimist. But to be honest with you, I have no idea which one is going to be right about 2018. Or 2019.

 

In April 2000, the International Monetary Fund released a statement affirming that “the picture for global growth is a strong and quite positive one for the year 2000 and we believe beyond.”

Aim For the Sweet Spot

Sep 5, 2018
William Murphy / FLICRK.COM https://tinyurl.com/ycp3vcyn

“What really makes for a good financial plan?”

“What all I should try to plan for?”

“What do most people do?”

I get these sorts of questions from individual who come to see me for the first time.

What do most people do? Nothing.

Or they wait, saying they’ll do “something” later. Waiting allows you to do nothing, but with dignity.

ShinyPhotoScotland / Flickr.com https://tinyurl.com/y7m4j3vl

Are you an optimist or a pessimist?

 

You remember what Garrison Keillor used to say about the children of Lake Wobegon, who are “all above average.” Sociologists have tagged this “illusory superiority,” or the tendency we all have to overestimate our positive qualities. CBS News reported on a classic 1977 study in which 94 percent of professors rated themselves above average relative to their peers.

So, most people view themselves as positive, optimistic, capable people. If this is how you see yourself, you are…average (sorry).

Getting back to normal

Jul 25, 2018
Ren Kuo / Flickr.com https://tinyurl.com/yb9a5cqa

When are things going to get back to normal?

Funny, isn’t it - things are always getting back to normal. But they are rarely normal. What’s that all about?

In math, they call this reversion to the mean. A simpler way to express this might be “the more things change, the more things stay the same.”

Investment Zen / Flickr.com https://tinyurl.com/y7lb7lmq

Is it a good idea to pay off your home mortgage loan early?

I find there is an economic answer to that question and an emotional answer to that question.

 

Which is right? That depends on who YOU are…

Well, I’m glad I could clear that up…

Maria M / Flcikr.com https://tinyurl.com/y9tfdkfu

For all these years you have been faithfully putting money into your retirement accounts. At first it was hard, but then it became a habit. Then it just became a part of who you are…you’re a saver. And you feel good about that.

But then comes the day you’ve been working for – retirement – and they say you’re supposed to do the very thing that was anathema to you as a saver – take..money…out!

If you are a true, died in the wool saver, it just feels weird. Kind of…risky.

Pages