On a recent episode of the Animal Spirits podcast, my colleagues, Michael and Ben, had an interesting conversation about homeowners insurance rates in Florida. The average homeowners insurance premium in the state is over $9,000/year. Ben asked Michael if there’s a certain level of premium where it makes sense to forgo insurance coverage. As I…
Financial Planning
7 Signs Your Advisor is Doing Real Financial Planning
Many financial advisors claim to be financial planners. But a closer look reveals most are giving financial planning lip service at best. Rough drafts of financial projections, constructed with incomplete information and estimates, are a far cry from comprehensive plans. Not to mention that financial planning is a constant and ongoing process, not a one-time…
Garbage In, Garbage Out
My Christmas gift this year was an Oura ring. Oura is a health-tracking device you wear all day and night. It measures your sleep patterns, heart rate, activity, heart rate variability, recovery, and a host of other data points. I’ve been curious about health data for about a year. At every physical exam, I am…
In Defense of the 401k Loan
I have always been opposed to 401k loans. There are many downsides. The money comes out of the market, potentially losing on growth and compounded returns. The borrower is unlikely to continue saving in the 401k while making loan repayments. And there’s a risk that the loan becomes taxable if the borrower leaves their job…
Do You Have an Overfunded 529 Plan?
Despite the astronomical cost of college these days, I meet investors with overfunded 529 plans all the time. By overfunded, I mean that when I run a financial projection with estimates for future tuition costs and market returns, there is money left over in the 529 account after the student finishes college. When this happens,…
Helping Your Girlfriend with Retirement Planning
Last week I joined Ben Carlson’s live Youtube show called Portfolio Rescue. Each week, Ben pulls the most relevant questions we receive from listeners, watchers, and readers of our finance content. I helped answer two listener questions that dealt with financial planning issues. The first was from a man who is helping his girlfriend save…
The Biggest Life Event That No One Talks About
Graduation, first job, marriage, having kids, divorce, death of a spouse, becoming a grandparent. These are all major life events that receive a lot of attention. We throw parties, showers, weddings, and funerals to mark these milestones. We formalize them with legal documents. We write articles, how-to’s, and self-help books about them. The rhythm of…
The Most Important Assumption
If I ask a group of 100 investors, “What is the most important assumption in a financial plan?”, I bet less than 10% would give the correct answer. Many believe it is the rate of return on investments. Others may say the withdrawal rate during retirement or the savings rate pre-retirement. All of these are…
The Worst Asset to Leave Behind
A family member recently told me she was disappointed she had to pay tax on an inheritance last year. Knowing that her state has no estate tax and that the federal estate tax doesn’t kick in until $11.58M, I quipped that she should not have paid any tax. As we continued the conversation, I learned…
Do You Ever Wonder What It’s All About?
Every now and then I read a book that rocks my world. This was the case last week when, while holding my newborn daughter in my arms, I read When Breath Becomes Air, a memoir written by a young man, a neurosurgical resident, who knows he is dying from cancer. Lucky for us readers, he…
