The emotions that your brain creates can lead to disaster if you do not know how to recognize where your decisions and actions are coming from (analytical side of the brain or emotional instinct to avoid risk).
Remember when you are wondering if the financial markets are going up or down the answer is always, “YES”
For more information, visit the show notes at http://www.moneyguy.com/2007/12/money-and-your-brain-amt-update
If you are a Georgia listener then Christmas has come early this year. As of December 11th the GA 529 plan has been drastically improved (probably because of the pressure of competition between the different 529 plans). The big improvements included:
** Georgia state income tax deduction update – For tax years beginning on or after January 1, 2007, contributions to an account are deductible up to $2,000 on behalf of any Beneficiary for Georgia income tax purposes. A Georgia taxpayer is not required to itemize his or her deductions to make this adjustment to income. Furthermore, there are no longer annual income limitations to claim this deduction.
For more information, visit the show notes at http://www.moneyguy.com/2007/12/ga-education-update-financial-leftovers-and-sex-drugs-hedge-funds/
Current events are impacting the world of personal finance and the financial markets. Many of you have asked me to provide more input on current financial events, and if you are one of those listeners you will get more than your fill with this show.
For more information, visit the show notes at http://www.moneyguy.com/2007/12/mortgage-plan-review-e-commerce-booming-and-candidates-take-on-social-security
I did not want you to think that I was only pulling out the bad news… I did want to give you a little ray of hope with this article:
Q3 economic growth fastest in four years, revision shows (click here for more information)
** "Free" credit reports **
Many of you have probably figured this out. It appears that the credit reporting companies have figured out how to squeeze a ton of profit out of consumers for something that is suppose to be "Free".
For more information, visit the show notes at http://www.moneyguy.com/2007/12/the-economy-free-credit-reports-and-improving-your-401k
Capital Gains Looming Once Again by David Hoffman with Investment News… Investment News is an industry magazine that I get, but I think the information in the article is important because it ties to our discussion from last week about the level of distributions that many of us will recieve this year from our Mutual Funds.
What Kind of Loan Should You Get provided by SmartMoney.com… Many of you have asked me to share my insights on what type of loan you should get for your home.
For more information, visit the show notes at http://www.moneyguy.com/2007/11/capital-gains-mortgages-and-retire-early-but-beware
On today’s show we discuss:
1st Segment includes information on what you need to look at with your portfolio at year end.
** Harvesting Tax Losses
** Avoiding Year End Mutual Fund purchases until after you determine whether year end distributions have been made by the fund (could be as high as 10% in some popular funds this year).
** Charitable donation reminder
For more information, visit the show notes at http://www.moneyguy.com/2007/11/year-taxes-investments-auto-insurance-savings-variable-annuities/
Defending credit card companies is hard to do because they do have quite a few practices that are down right sleazy (shrinking grace periods, escalating interest rate, holiday due dates, etc.), but if used properly they can be a helpful financial tool.
In this episode we share articles from the following:
"8 Experts Recall Their Best Personal Finance Advice" by Dana Dratch from bankrate.com
"Are Credit Cards Evil, or Just Dangerous?" by Liz Pulliam Weston from MSN Money
"Where Do You Stand in the Wealth Spectrum?" by Lee Eisenberg from Bankrate.com
"Dealing With a Disaster and Your Insurance Company" by Jennie L. Phipps with Bankrate.com/Yahoo Finance.
For links and more resources, visit our show notes at http://www.moneyguy.com/2007/11/great-personal-finance-advice-are-credit-cards-evil-and-the-wealth-spectrum
"Should You Be Investing In the Roth 401(k)?" – I have received several emails from listeners asking questions about Roth 401k options at their workplace. I actually covered this topic in the first quarter issue of the "Wealth Report" newsletter. I am using that article in today’s show.
For more information, visit the show notes at http://www.moneyguy.com/2007/10/roth-401k-financial-records-to-keep-and-social-security
The Securities and Exchange Commission (SEC) called last week and let me know that they were stopping by our offices. As you can imagine, this is not my favorite kind of phone call. We had nothing to hide or worry about, but it’s still a stressful situation. In light of this visit I decided that this would be a great time for me to focus the show on a few "rainy day" articles I had put away to discuss.
For more information, visit the show notes at http://www.moneyguy.com/2007/10/financial-leftovers
Points of Consideration for Education Planning
Many of you have written to ask that I provide some guidance on education planning and I have stayed away from the subject because education planning is one of those subjects that has a limited audience. I always try to do the Money Guy show with the understanding that we have listeners that are new to investing and personal financial planning as well as tried and true weathered investors that I can still enlighten from time to time with my insight.
For more information, visit the show notes at http://www.moneyguy.com/2007/10/college-planning-savings
Terms needed to understand asset allocation:
Domestic Stocks = US Companies
Market Capitalization of US Stocks (According to Morningstar):
Large Cap = US Companies with a Market Cap greater than $11 Billion (these are the companies that are household names like Wal-Mart, GE, Home Depot, Coca-Cola, Pfizer, and so forth)
Mid Cap = US Companies with a Market Cap between $2-$11 Billion (these are companies that you might have heard of like HR Block, but are not the size of the previous listed group.
Small Cap = US Companies with a Market Cap below $2 Billion. Probably not going to recognize the small company unless you specifically use their product or they are in your town.
For more terms, visit the show notes at http://www.moneyguy.com/2007/10/asset-allocation-basics
Diversification: The idea of spreading out your money across many different types of investments. Choosing to diversify your investment holdings reduces your risk tremendously.
Risk Tolerance: An investor’s ability to withstand losses caused by one or more of the different types of risk. This ability can be limited by your temperament as well as your time frame and financial circumstances. For example, someone who is investing for a goal 10 to 20 years or more in the future generally has a higher risk tolerance and may feel more comfortable with riskier investments than a person whose investment goal is only 5 years away or less.
For more information, visit the show notes at http://www.moneyguy.com/2007/09/mastering-the-world-of-investing
The focus of the program is on the changing retirement landscape.
1974 Retirement Funding:
2006 Retirement Funding:
Defined Pensions: The Endangered Species
For more information, visit the show notes at http://www.moneyguy.com/2007/09/retirement-in-crisis-update
The most important concept that determines how financially successful an individual/family is going to be is:
* Deferred gratification
* The hardest part of financial independence is not the investing… it is the savings factor:
In today’s world it is getting harder to be a good disciplined financial household.Â There is so much outside influence and temptation that only the strongest make it (faking success).
** The desire to drive a new flashy car
** “Same as Cash” for everything including Furniture, Electronics, & Plastic Surgery
For more information, including How to Accumulate $1,000,000 by Age 65, visit the show notes at www.moneyguy.com/2007/09/simple-advice-for-your-finances
I personally make use of both credit cards and the large sum of equity that I have in my personal residence. I responsibly pay my credit cards off each month, but thoroughly enjoy the $1,200 to $1,500 of annual rewards and cash back that I receive. I also use my home equity as a tool that allows me not to keep huge sums of cash sitting on the sidelines just in case I need money for an emergency. I want as much of my money working for me at all times, so that eventually my army of working dollars earns more than I can make with my back, hands, and brain. Let’s face it: Investment income that is automatic and pays your monthly bills can open your life to many more opportunities as well as complete financial independence.
However, I am quickly realizing that many have gone too far in the use of debt. Just as Alan Greenspan spoke of the late 90s equity markets with the words, irrational exuberance, I think that we can use the exact the same logic and apply it to the average person’s use of debt. Many have taken the tool of debt to levels that are now causing them to sink into financial ruin.
For more information, visit the show notes at http://www.moneyguy.com/2007/08/financial-devastation-through-debt
the benefits of using Long/Short Funds.
A long/short fund takes advantage of a technique that many hedge funds use that allows them to make money in both a rising and falling market. Long/short fund managers divide their funds’ assets into two types of positions (long and short holdings).
Long positions – meaning they buy stocks expecting that they will rise in value and can be sold at some point in the future at a gain (this is the traditional form of investing that most investors are use to… buy value priced stocks with the anticipation of selling for a gain)
For more information, visit the show notes at http://www.moneyguy.com/2007/08/act-rich-and-protect-yourself-from-a-down-market
I have spent the last two weeks preparing for the IRS. Unfortunately, I still do a small number of business tax returns (old habits are hard to get away from). One of my small business tax clients was selected for a full examination (Audit). I have over over 10 years of experience in completing tax returns, and this is the first business return that has been selected for an audit. I guess it was my turn to sit on the hot seat. We had the IRS agents here in the office on Wed. and then we met at the client’s business on Thursday for a site evaluation and Q&A session. I am elated that we made it through the audit without any problems and the client did not have to pay any additional taxes, but as you can imagine it has been a stress that has caused a few nights of restless sleep. I knew that we had nothing to hide, but you never know where there might be a difference of opinion on deductions.
For more information, visit the show notes at http://www.moneyguy.com/2007/07/attn-small-business-owners-a-legal-way-to-hide-money-from-the-tax-man
I’m a straight talker, so please don’t hate me for a harsh, but true statement: when people are falling short of their financial goals, it’s almost always because of their own actions and decisions.
THE SECRET TO SUCCESS IS THROUGH DEFERRED GRATIFICATION AND TAKING THE ROAD LESS TRAVELED
For more information, visit the show notes at http://www.moneyguy.com/2007/07/are-you-on-the-road-to-wealth-and-independence
A quick review of your financial health is today’s topic.Â I am taking a brief break from talking about investments.Â Instead I am going to load you up with planning ideas and even tools that I use to keep my financial house in order.
Estate Planning & Risk Management (I know that it is dark to talk about death or other bad events that could occur in your life, but it is important to discuss).
Wills – If you have children you must have a Will.Â Otherwise, you are leaving their future in the hands of the state.Â I find it hard to believe that the state would be better at determining your families future instead of you.Â DON’T PLAY WITH FIRE….. GET A WILL!!!
For more information, visit the show notes at http://www.moneyguy.com/2007/06/the-30-minute-financial-plan
First you guys need to know my thoughts on what is known as Efficient Market Theory
Efficient Market – Since everyone has the same information about a stock, the price of a stock should reflect the knowledge and expectations of all investors. The bottom line is that an investor should not be able to beat the market since there is no way for him/her to know something about a stock that isn’t already reflected in the stock’s price.
I feel that this Theory holds true for Large Cap. US Companies. There are really only 1,000 Large Cap Companies (Cap Value > $10 Billion). Meanwhile there are pundits, analyst, and advisors like myself on every street corner to evaluate these 1,000 stocks. With the vast amounts of information and the speed that information now reaches us through the Internet, Cable Business Channels, AM Business Talk Radio how could you know anymore than anyone else?
For more information, visit the show notes at http://www.moneyguy.com/2007/06/how-to-choose-mutual-funds
For more information, visit http://www.moneyguy.com/2007/06/how-to-choose-mutual-funds
There are tons of podcasts out there that explain how to spend less than you make, and how credit card debt can drain financial freedom. How many actually have the training and know how to help you with the crucial portion of your extra cash flow and retirement funds? I would dare to say not many because most either do not know what to tell you or they are trying to sell you a product so they will never tell you (unless you invest $2k into their proprietary system). I am here to help by focusing the next few shows on investing.
Today is the first part of our investment series and we are getting back to the basics, but before I get into the details I wanted to mention an article I read this weekend:
For more information, visit the show notes at http://www.moneyguy.com/2007/05/when-where-and-how-to-invest-investing-101
Tax Refund Challenge:
Now that you have filed your taxes it is time to evaluate where you are financially. Say what you will about filing tax returns they at least allow you to take inventory on how much you earned in 2006. I am always talking about saving for the future and making sure that you are locking away 15%-20% of your gross wages for the future. That is easy to say when you earn a good living, but I know from emails that I receive that many out there are struggling financially. The average refund was estimated to total $2,480 for 2006 up from $2,371 for 2005. I would challenge you to look at your return and if you are not happy with your income level do something about it. Success is easier than you think… You just have to believe and figure out where your passion is. Use the refund money as your initial savings for starting a business, or for going back to school. It is very fulfilling and can be financially rewarding to make a big change and have success that leads you to a better life.
For more information, visit the show notes at http://www.moneyguy.com/2007/04/lazy-investing-can-be-good-investing
The financial markets have been very choppy this quarter. We started off 2007 with day after day of the stock markets hitting new highs. Then one crazy Tuesday in February (27th to be exact) the bottom fell out of the market (I blame it on my producer Heidi; she was off that day spending time with her dentist and a root canal). Ever since it has been up and down to the point that many of you are wondering what in the world is going on.
On today’s show I am going to share with you the resources that help me determine what is going on in the financial world.
For more information, visit the show notes at http://www.moneyguy.com/2007/03/free-professional-advice-and-research-my-little-blackbook
There is a storm of concern that has been building for quite some time, and it is finally getting the attention that it deserves…. 401K FEES:
For more information, visit the show notes at http://www.moneyguy.com/2007/03/are-401k-fees-robbing-you-of-your-retirement
Term Life Insurance is appropriate for people who want life insurance only for a limited term, such as until your children are grown or you reach retirement age.
Term life insurance has become much more affordable in recent years due in part to the fact that people are living longer. A $500,000 term-life policy can now cost as little as $350 a year for 20 years, which is considerably cheaper in comparison to the more than $1,000 a year that it would have cost you in the early 1990s.
For more on Shopping for Insurance, visit the show notes at http://www.moneyguy.com/2007/02/objective-life-insurance-adviceno-really