A new proposal by the White House could force colleges and universities to share in the risk of their students' defaults on federally funded student loans. Michelle Hackman reports on the plan in The Wall Street Journal, writing: The White House is weighing a measure that would require colleges and universities to take a financial stake in their students’ ability to repay government loans, an effort that could squeeze loan availability to students and reduce defaults. For several months, Trump administration officials have been discussing enacting such a mechanism or making a push for one … [Read more...]
Does Your Investment Advisor Take Legal Kickbacks behind Your Back?
When you seek investment council be sure you work with an investment boutique that’s required by law to act as your fiduciary. Ask the question: “Are you required by law to act as my fiduciary.” Do not accept any answer other than Y-E-S. Because too many professionals in this industry put themselves out there as “Investment Advisors” or “Financial Advisor” when in reality they are neither. In order to legally call yourself an investment advisor you are required to act as a fiduciary. So called “advisors” working for big Wall Street firms are not required by law to be your … [Read more...]
Your Questions, My Answers: Custodial Accounts and Gifts to Minors
Considering a monetary gift for your grand-kids for Christmas? They will certainly be happy, but you should read through this piece I wrote back on November 16, 2018 first. Your Question: My mother is planning on gifting my children some money this year. Since there is enough in their 529 accounts, I thought I would open custodial accounts for them to take care of this money, and start them on the road to retirement saving and learning about investing. In your opinion, is a custodial account the best option in this situation and if so, is Fidelity a good place to do it? My Answer: Yes. I … [Read more...]
Separate Your Insurance from Your Investments
The WSJ does a deep dive on the problems some are now facing with Universal Life Insurance. Universal Life became popular in the 1980s as a way for insurance brokers to offer a competing product to customers who started buying term insurance and investing the balance of their monies in stocks and bonds instead of buying whole-life insurance policies. The insurance policy type emerged in an era nearly four decades ago when the Federal Reserve was fighting inflation with high interest rates. Some financial advisers suggested people forgo traditional “whole life” insurance and buy less-expensive … [Read more...]
Common Social Security Myths Debunked
For a government program, Social Security is complex. There are many rules and just as many misconceptions. Fidelity debunks five common social security myths. We list the myths below. You can read why they are incorrect by following the link below. Myth #1: You must claim your Social Security benefit at age 62 Myth #2: You can claim early, then get a "bump up" once you reach full retirement age Myth #3: Your monthly Social Security benefit could be reduced or denied if your ex-spouse claims Social Security in a certain way Myth #4: Your benefits are only based on wages that you've earned … [Read more...]
These 7 States have the Highest Concentrations of Millionaires
A million bucks doesn’t go as far as it used to, but it is still a lot of money. Nationally, only 5.8% of households have $1 million or more in investable assets. But the wealth isn’t evenly distributed across the states. According to Kiplinger the states with the highest concentration of millionaires are as follow: Maryland (7.87%) New Jersey (7.86%) Connecticut (7.75%) Hawaii (7.57%) Alaska (7.50%) Massachusetts (7.41%) New Hampshire (7.36%) You can check out Kiplinger’s entire ranking of Millionaires by state here. … [Read more...]
How do Millennials’ Finances Stack up Against Gen-X?
Researchers at the St. Louis Federal Reserve were tired of trying to decipher contradictory evidence on Millennial finances, so they decided to run their own study. The researchers compared Millennials' 2016 finances to (same age) Gen-Xer finances in 2001 to get an idea of their relative financial well-being. Here are the key takeaways from the study: Millennials and Generation X were the youngest working generations in 2016 and 2001, respectively. How do their balance sheets compare? Because of fewer assets and more debt, millennial households had an average net worth of about $90,000 … [Read more...]
If You do this, Will You Improve Your Happiness?
“Americans are devoted to the pursuit of happiness. Unfortunately, research shows that many of us don’t actually know what makes us happy, so we end up pursuing the wrong things,” writes Dr. Shlomo Benartzi, professor and co-head of the behavioral decision-making group at UCLA Anderson School of Management. One way to help your happiness is to do a test. It’s called A/B testing. I’m familiar with A/B testing with our websites. Change a couple of words in the title of a piece and it’s shocking what a difference it can make in reader interest. As Dr. Benartzi points out: In research … [Read more...]
Does Your Portfolio Pass My Three Step Test for Balance?
Back in 1993 I explained my three-step test for balancing your investment portfolio between bonds and stocks. At the time I was recommending Treasuries, but you can use this advice no matter what kind of bonds you’re buying. Use your age and my three-step test as a starting point for how you plan to allocate your portfolio. I wrote: I want you to keep your investment portfolio well balanced. But just how much of your portfolio should be invested in equities and how much should be in Treasuries? Here’s a basic strategy that is based on your age. The percentage of your portfolio that is in … [Read more...]
Are the Good Times over for Card Lenders?
For years credit card lenders have been reaping profits, but rising losses and consumers who demand more rewards for their business have lenders on their heels. AnnaMaria Andriotis writes: “The easy money has been made in card lending,” said Don Fandetti, consumer finance analyst at Wells Fargo & Co. While cards remain highly lucrative for banks, the benefits of a rising interest-rate environment have been muted lately. The added revenue of cardholders paying more in interest payments each month has also been offset by growing competition from lenders trying to poach card customers by … [Read more...]