Blog - Your Total Wealth

THE RISK OF MANAGING RISK

Financial advisors may have clients who have “done their homework” and are considering HEDGING their risks. When that happens both the client and advisor should discuss the potential risk inherent in any hedging strategy; hedging is a double edged sword. Our latest contribution to the #Yourtotalwealth BLOG provides a primer for this discussion on hedging. Enjoy, learn and share. (more…)

John DrakeSeptember 15, 2023

Financial Literacy

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…

HSF PublishingJuly 21, 2023

tax deferred investing

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…

HSF PublishingJune 27, 2023

Index Funds

Index Funds and Expense Ratios

We wrote that perhaps the primary advantage of investing in index funds and index ETFs is their low expenses. But there are some index funds that charge outrageously (in our opinion) high expense ratios. We don’t understand why any investor would ever invest in them. If it is because their financial advisor put them there, they need a different financial…

David A. DubofskyJune 5, 2023

Retirement

Expert Insight on Retirement Savings

Why do you think it's so hard for some people to save for retirement? There are many reasons. Some individuals are barely able to live on their after-tax income. They spend every dollar on food, shelter, transportation and other necessities. Given a choice, these individuals will almost by necessity delay saving for retirement, which may be 20, 30 or 40…

David A. DubofskyMay 15, 2023

Vesting

GOLDEN HANDCUFFS: THE YIN YANG OF VESTING

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…

HSF PublishingApril 27, 2023

Finances Financial Literacy Liquidity

LIQUIDITY

Financial liquidity describes the ability to buy or sell something quickly at a fair price. An illiquid asset cannot be so easily sold. For example, real estate is typically an illiquid asset. You may have to wait months to get the price you want. There are three components to the liquidity of securities in general, and stocks specifically: The first is the…

David A. DubofskyMarch 21, 2023

Annuity

ANNUITY: FOREVER MONEY, FOREVER FEELINGS

Our book is a unique merging of financial literacy with life literacy. Here’s an example of that Yin-Yang merging, Annuity/Emotional Annuity. It reminds us that, like an ANNUITY, our emotional commitment towards others can be …forever. (more…)

HSF PublishingFebruary 13, 2023

Asset Allocation - Planning for long term success

Financial Literacy Financial Planning stocks

ASSET ALLOCATION 101

Asset allocation, at its most basic level, is deciding how to spread (allocate) the risk across your investment portfolio: stocks vs. less-risky instruments such as bonds and certificates of deposit (CDs). These decisions will be the primary determinant of your investment performance; i.e., your portfolio’s rate of return. Beyond this seemingly simple decision, you must consider how much to invest in domestic stocks, international…

David A. DubofskyJanuary 13, 2023

Financial Literacy Understanding Debt

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…

HSF PublishingDecember 12, 2022