Voices The art of asking: How the right questions, worded precisely, can help older clients

Financial Advisor with Elderly Clients

By Lyle Sussman, David Dubofsky November 30, 2023, 6:00 a.m. EST 3 Min Read Loss aversion, one of the major behavioral finance biases, is often defined as the pain of losing an amount of money exceeding the pleasure of gaining that same amount of money. It also refers to the reluctance of investors, and individuals in general, to realize losses,…

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THE PSYCHOLOGY OF, “I PAID OFF MY MORTGAGE”

Sweat Equity

Anyone who made a final mortgage payment for their house now owns an asset that is probably worth more than it was when the first mortgage check was written. But that homeowner owns much more than a physical asset. They not only built equity they also built self-esteem. Our latest #yourtotalwealth BLOG discusses the psychology of paying off a mortgage,…

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THE PSYCHOLOGY OF HEDGING

THE PSYCHOLOGY OF HEDGING

We recently posted a short primer on HEDGING and the possible financial implications created by trying to mitigate risks.  We now add to our BLOG on HEDGING with a different perspective focused not on finances per se, but on the perceptions and emotions while confronting the uncertainty.   Is the situation a problem or merely an inconvenience? Carefully consider your unique…

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Smart People Doing Stupid Things

Smart People Doing Stupid Things

DECISION MAKING BIASES IN PERSONAL FINANCE   OBJECTIVES • Reality check. Financial professionals and their clients are both constrained by their decision-making biases. • 3 Behavioral Finance biases affecting counselors and their clients: Confirmation Bias, Overconfidence, and Loss Aversion. • Strategies for mitigating the effects of these specific biases, and cognitive biases in general. Q and A. References for further…

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IRAs: Tax-deferred Investing

The following example illustrates the long-term benefits of tax deferred investing: Assume that you invest $4000/year in a typical taxable mutual fund or ETF that generates an 8% annual rate of return in taxable income. You will get $320/year before tax. If you are in the 25% tax bracket, you will get to keep $240/year after taxes. If you reinvest…

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GOLDEN HANDCUFFS: THE YIN YANG OF VESTING

Man in a suit with Golden Handcuffs

You don’t like your job or the company, but you need the money.  Should you go or should you stay? This question is the essence of the “Golden Handcuffs” metaphor and describes many  in these chaotic times.  The metaphor has special significance if the decision is contingent on vested benefits, and a vesting period. It’s also a significant issue for…

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Forbearance

If you (or someone you know) are having difficulty repaying a loan, consider asking for forbearance.

If you (or someone you know) are having difficulty repaying a loan, consider asking for forbearance.  It will likely prove to be the best gift you receive this holiday season.  This is a concept that is rarely, if ever taught, in business school.  Many (most) college educated individuals in finance may not be familiar with it. Enjoy, and share our discussion of…

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Understanding Our Regrets Today Can Improve Our Financial Tomorrow

Understanding Our Regrets Today Can Improve Our Financial Tomorrow

Understanding Our Regrets Today Can Improve Our Financial Tomorrow Feelings of regret, especially about financial decisions or inaction, are universal, but it’s possible to turn them into life’s best positives. BY H. DENNIS BEAVER, ESQ. PUBLISHED 7 HOURS AGO “‘Jerry,’ my 65-year-old father, is beating himself up over failing to get out of the stock market months ago when it was so…

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Five Cs of Credit

Whether you agree or disagree with President Biden’s Student Loan Forgiveness Plan, it is useful to think of it in relation to the usual ways that credit is granted, and the expected payback of loans. That is why we posted the “5 Cs of Credit,” one of the 74 essential concepts in Your Total Wealth. Because financial advisors and bankers…

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