Buying a vehicle? Check the TCO

If you are in the market for a new or used vehicle, then it is important to do some homework before you settle on make and model. Here are a few things to consider before you pull the trigger on buying that new or used vehicle:  Continue reading “Buying a vehicle? Check the TCO”

Don’t be passive when managing investment costs

As you know, gains in your stock investments are not guaranteed, even though it may feel like it if you’ve been invested in the market for the last decade.  Looking at the last five years, the S&P 500 index has increased an average of nearly 17% annually, with only minor corrections along the way.  In fact the S&P 500 returns have been so consistent that most large cap equity funds haven’t been able to beat this performance. Over a five year period only 17.6% of large cap equity funds beat the S&P Index (see exhibit 1 below).  In other words, if you had simply invested in the S&P 500 index then you would have done better than the majority of professional stock investment managers. But that’s not the end of the story. Even if you had invested in a fund that tracks the S&P 500 index, you still could have under-performed depending on the fees you paid to the investment company that managed your money.  Continue reading “Don’t be passive when managing investment costs”

Don’t pay to manage your credit score

I was asked earlier this week what’s the best way to check a credit score? There are a few ways to get your credit score, but check to see what your credit card company offers first. Many credit card issuers now provide cardholders with their credit score as a free benefit.  The card issuer I use provides my FICO® score, score history, key factors affecting my score, and suggestions on how to improve my score.  Continue reading “Don’t pay to manage your credit score”

Investing in picks and shovels

I don’t profess to know much about digital currencies or marijuana, but I do know something about speculative investing.  If there’s one thing I know, it’s that you’ll see history repeat itself if you’re around long enough and paying attention.  As it relates to the current digital currency mania, seen in the astronomical price increase of bitcoin, we’ve been here a few times before.  I’m certain you’re not old enough to remember the 17th century tulip bubble crash in the Netherlands or the “gold rush” in the 1800’s, but the “digital currency rush” is similar.  The rapidly rising prices and a fear-of-missing-out creates a frenzy that drives investors to bet it all (or too much) in hopes of getting rich quickly.  Continue reading “Investing in picks and shovels”

How to prioritize your list of colleges

My son will be going to college next year and we are working with him to narrow down his choices. After a first cut, we arrived at a list of 6 schools that he would be interested in attending based on location, programs, admissions requirements, and taking a campus tour. He applied to all 6, and we expect that he will get into at least 4 of them, but he could get into all 6. We now need to figure out how to help him further prioritize that list.

To help us make informed decisions, we are going to weigh both qualitative and quantitative criteria to prioritize the list.   Continue reading “How to prioritize your list of colleges”

What financial return have you received from getting a college diploma?

Ever wonder if going to college was worth it? I’m not talking about the great time you had, or will have, socializing or “finding yourself”. I’m talking about the financial benefit received from going to college.  For most students college is worth the investment as indicated by the growing earnings gap between college-educated and less-educated Millennials, based on a report from the Pew Research Center.  The research also shows that college-educated Millennials:  Continue reading “What financial return have you received from getting a college diploma?”

Great sites for staying up-to-date on money matters

If you read my prior post on developing financial know-how, then you’ll know that keeping up to date on personal finance news and information is one of the steps in the advancement cycle.  The great thing is that in this age of online subscription services you can select topics that matter to you and have the information delivered directly to you.  I have a few different information services that feed updates on personal finance to my email and Twitter accounts.  These feeds provide information on a range of topics and are particularly useful if you are nearing a significant life goal like starting or changing careers, or deciding when and where to retire.  I receive feeds from a number of different sources, including those specific to industries or technologies I’m following for investing purposes.  It’s easy to get overloaded and overwhelmed with all of the different sources, so I recommend getting started with a few that allow you to better understand how to financially plan for life events, stay on top of your money, and comparison shop products and services.

Continue reading “Great sites for staying up-to-date on money matters”

Developing financial know-how by learning to speak money management

You may have heard the term “financial literacy” which by definition is the education and understanding of various financial areas, such as saving, spending, investing, insurance, budgeting, retirement and tax planning.

Financial literacy fundamentals are often taught in schools starting in middle or high school, with mixed results at best.  A study completed by George Washington University and PwC proves this point.  Based on a survey of over 5,500 Millennials, it was determined that only 24% of Millennials exhibited basic financial literacy, and only 8% demonstrated high financial knowledge.  Part of the problem is that school-taught financial literacy focuses on concepts with limited application to the school-age audience.  To help this young audience succeed over time, we must be prepared to offer timely support to foster “financial know-how”.  Continue reading “Developing financial know-how by learning to speak money management”