Working or retired, the focus of most people is keeping their check book full of money for the monthly expenses they have. While working, the source of the money is obvious … it is from you working. While retired, the source of the money is less obvious … it is from your money working. So […]
People often get the calculation for their investment rate of returns wrong. Most people use the average rate of return which completely ignores the time value of money. The average rate of return may over, or under, state actual returns and are not suitable for comparisons with other investments. Most investments people have receive money at various […]
You are retired and need to replace your car. How do you do that? Buy it with cash? Or get a loan? The answer is not a simple as one might think – it depends on how old you are and how expensive the loan and/or car are. This question refers to those who are […]
Michael Kitces wrote an interesting article comparing “Decision Rules” vs. Rebalancing. He finds that rebalancing under a total return approach has essentially the same results using the “Safe Withdrawal Rate” (SWR) decision rules. I posted a blog a short time ago that compares the SWR approach to a Dynamic Updating approach. I have always maintained […]
Household and consumer debt are on the rise. Student loans are fueling a lot of that lately. Where else might people get a loan? From their retirement plans if the plan permits it. So is borrowing from your 401k a good, or bad, idea? I suggest that usually it’s a bad idea to borrow from […]
Short answer, it depends! I’ve written about reverse mortgages here before – mostly about how they can blow up the best laid plans by people not fully understanding what they’re doing – thus, unexpected consequences from misunderstanding. So this piece is about getting to understand them so you may be able to use the untapped […]
Is all of your portfolio at risk of loss during a down market? It shouldn’t be if it is properly diversifiedª. Let me explain using ocean waves to represent a portfolio. You see a properly diversified portfolio would mean that ALL of your stocks and ALL of your bonds have simultaneously gone to zero value! […]
Market cycles make predictions hard for those who like to make such predictions. I believe predictions are impossible, especially over the rest of your life when it comes to retirement. This doesn’t mean we all throw up our hands though. It means taking a measure of what is prudent based on facts as we know […]
Most people are familiar with the “4% Rule.” This post is not going to debate or debunk it. What the rule essentially does is start retirement out with conservative spending, and possibly end up with lots of money at the end. What I’ll do instead is demonstrate a method that closely monitors what you’re doing each […]
Will investors ever stop underperforming their own investments? The theme in both of these articles by Jason Zweig is what happens when investors (or their advisers) chase trends and lose sight of what they really ought to be doing. How Investors Leave Billions on the Table – MoneyBeat – WSJ. “So find a financial adviser […]
