Blog - Your Total Wealth

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

HSF PublishingDecember 3, 2023

Mortgage

THE PSYCHOLOGY OF, “I PAID OFF MY MORTGAGE”

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,…

HSF PublishingNovember 17, 2023

Uncategorized

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…

HSF PublishingOctober 18, 2023

Financial Risk

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…)

HSF PublishingSeptember 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