Objective information about financial planning, investments, and retirement plans

Friday Finance Links October 12, 2012

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Early season “do or die” game for the Packers on Sunday.  We will be heading up to visit our son at Northern Illinois

Northern Illinois UniversityUniversity tomorrow for their Homecoming game.

Here are some articles and blog posts that I suggest for your weekend personal finance reading:  

Personal Finance Blogs

Glen writes Credit Card Fees: Eroding Your Wealth at Credit Card Smarts.

Carrie outlines 5 Crucial Financial Steps To Take When Getting A Divorce at Careful Cents.

Miranda Marquit tells us What is an ETF and How Does it Work? at Excess Return.

Ken Faulkenberry provides some great explanations in Investment Vehicles: Individual Stocks and Bonds, Mutual Funds, or ETFs at AAAMP Blog.

Posts from Fellow NAPFA members

Jim Blankenship explains The Value Of Social Security Benefits at figuide.com.

Eve Kaplan wrote Retirement Spoiler: When Things Don’t Go As Planned at Forbes.com.

Other articles from around the web

Ian Salisbury tells us about Class warfare in your 401(k) at marketwatch.com

Philip Moeller takes A Closer Look at America’s Aging Workforce at usnews.com

Robert Russell discusses An Escape Plan for Your Variable Annuity? at usnews.com

In case you missed it here is my latest contribution to the US News Smarter Investor blog Are You Making the Most of Your 401(k)? 

Thank You To: 

Josh Brown for including my post on the extra cost of actively managed mutual funds in his The Good Leads post on Tuesday in the Wall Street Journal.

Colin at Humble Savers for including my guest post 5 Steps On The Road To Financial Freedom.

Veronica Dagher for quoting me in Five Big Mistakes Mutual-Fund Investors Make in this past Sunday’s Wall Street Journal.

Here’s wishing everyone a great weekend.  

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Why Financial Planning is Important-An Illustration

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Over the years I’ve written several posts on this blog about the importance of personal financial planning.  Now courtesy of NAPFA (National Association of Personal Financial Advisors, the largest organization of fee-only financial advisors in the country) I can show you.  The infographic below does a great job of diagramming the need for financial planning and how the financial planning process works.  The statistics are sobering and illustrate the need for many Americans to seek the help of a qualified financial planner.


 

Please contact me with any thoughts or suggestions about anything you’ve read here at The Chicago Financial Planner

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Friday Finance Links September 28, 2012

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Thankfully the NFL settled their labor dispute with the replacement refs so I don’t have to find a way to weasel out of my threat to boycott Sunday’s Packers-Saints game.  Biggest story of the week as even the two presidential candidates weighed in.

Here are some articles and blog posts that I suggest for your weekend personal finance reading: 

Personal Finance Blogs

Michael tells us that The NFL is Teaching the World a Valuable Business Lesson at PT Money.

Joe shares A Letter to the 47%ers at JoeTaxpayer Blog.

Jeremy outlines The Real Costs of Running a Blog Business at Modest Money.

Scott Wallace asks Do risk free investments really exist? At Retire Happy Blog.

Ken Faulkenberry explains What is Exponential Growth, Double Time, and the Rule of 72? at AAAMP Blog.

Posts from Fellow NAPFA members

Blair H. duQuesnay posted You Don’t Have to Earn a Ton of Money to Retire Comfortably.  Blair is a fee-only planner who is not yet in NAPFA, hopefully that will change in the near future as I think she would be a great addition to our organization.

Rick Rogers tells about Donating Appreciated Property? 

Other articles from around the web

Christine Benz offers some tips in Looking Ahead: Your Fourth-Quarter Financial To Do List at Morningstar.com

Daniel Bortz lists some Important Things to Consider When Preparing Your Will at US News.com.

Chris Carosa describes Mom-The Practically Perfect Picture of a Fiduciary at Fiduciary News.

In case you missed it here is my latest contribution to the US News Smarter Investor blog Are ETF Price Wars a Good Thing? 

Thanks to Josh Brown for including my post on the replacement refs in his The Good Leads post yesterday in the Wall Street Journal.

I also want to thank Joe at JoeTaxpayer Blog for contributing the first guest post ever on this blog earlier this week.

Here’s wishing everyone a great weekend.  

Photo credit:  USA Today

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Is Your Financial Advisor Like a Replacement Ref?

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By now you’ve all seen the replay of the horrible call at the end of Monday night’s football game that gave the Seattle Seahawks a “victory” over my beloved Green Bay Packers.   In the interest of full disclosure I am a lifelong Packer fan.  This love affair with the Pack began towards the end of the 1966 season (I was nine) a season in which they won the first Super Bowl; Vince Lombardi was the coach; and Bart Starr and eight other players from this team would end up in the Pro Football Hall of Fame.  I’ve seen some great wins and some disappointing losses over the past 45 years.   Beyond the botched call on Monday, the whole tone of the games with these unqualified replacement refs is just hard to watch.

Update as of late September 26, 2012 the NFL announced that a tentative deal with the real refs had been reached and hopefully we will never see anything as shameful as this episode again.

Unqualified and incompetent referees in the NFL are discouraging, but an unqualified financial advisor can cause some real harm to you.

Is your advisor qualified?  The ref who signaled touchdown on that last play clearly was not.  He had never officiated a game above the junior college level before this NFL season.  Typically an NFL official must have at least five years experience at the college level.  As far as your financial advisor, ask yourself if she is qualified to advise you on your situation.  Does she take a holistic view of your financial situation or does she simply try to sell you more financial products?  Moreover does your advisor have the proper credentials such as the Certified Financial Planner (CFP®) designation?

Does your financial advisor collaborate with other professionals on your behalf?   One of the comments made by several of the experts on ESPN and other networks is that the head referee never called over the two officials who made the conflicting calls in the end zone to hear their explanations.  One of these experts is a former league referee and he indicated this should have occurred as a matter of course.  As a financial advisor I often tap the expertise of financial advisor colleagues and other professionals in areas like estate planning and insurance on behalf of my clients.  I consider myself a financial planning generalist, but I also know what I don’t know.  The key is doing the best job that I can for my clients.  Does your advisor take this approach?  If not why not?

Does your advisor place your interests first?  Clearly the NFL doesn’t really care about its fans or for that matter its players.  Why else would they put out such a cheapened product for the first three weeks of the season and put their players potentially at greater risk of injury?  It’s all about the money and the NFL is raking it in.  Likewise many financial advisors are all about the sale of financial and insurance products.  They are strictly out for the money; their client’s interests come second.  For many commissioned and fee-based advisors this is both the norm and perfectly legal as they are not held to a Fiduciary standard.  I’m biased, look for a fee-only advisor who holds him or herself out as a Fiduciary and who puts their client’s interests first.

Let’s hope the NFL settles their labor differences soon.  But more importantly, make sure that you have a first stringer as your financial advisor.

Please feel free to contact me with your investing and financial planning questions. 

Please check out our Resources page for links to some tools and services that might be beneficial to you.

Photo credit:  Reuters

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Friday Finance Links September 14, 2012

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Rather quiet week around here.  Thankfully the Packers recovered from their week one fiasco and beat the hated Bears

stock market

on National TV last night.

Here are some articles and blog posts that I suggest for your weekend personal finance reading: 

Personal Finance Blogs

Barbara Friedberg offers Wealth Building Advice From Selling LA at Barbara Friedberg Personal Finance.

Ken Faulkenberry asks Can I Consistently Outperform the Market? at AAAMP Blog.

Donna McCaw discusses Retirement as a single person at Retire Happy Blog. Just as applicable to us here in the U.S. as well as to the Canadian audience for whom it was written.

Alexis discusses Stock Broker Fraud & When to Fire & When to Fire Your Broker for Bad Advice at The Digerati Life.

Ryan Guiana asks How Big Should Your Emergency Fund Be? at the Military Wallet. 

Posts from Fellow NAPFA members

Alan Moore offers 5 Tips To Save At The Grocery Store at Figuide.com.

Cathy Curtis reveals a Simple Truth About Money: The Longer You Live The More Money You Will Need at FiGuide.com. 

Other articles from around the web

Steve Vernon asks Are your 401(k) investments money losers? at CBS Money Watch.

Amy Hoak tells us that It’s now cheaper to buy than rent at Market Watch.com.

Daniel Solin wrote Variable Annuities: Greed  at Work at US News.com.

In case you missed it here is my latest contribution to the US News Smarter Investor blog What to Do With a Big Chunk of Stock. 

Here’s wishing everyone a great weekend.  

Photo credit:  Flickr

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Friday Finance Links – September 7, 2012

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Labor Day is behind us and the NFL gets into full swing this weekend.  You can assume I’ll be planted on my favorite spot on the couch as I watch my Packers hopefully stomp the 49ers.  

Here are some articles and blog posts that I suggest for your weekend personal finance reading:

Personal Finance Blogs

Ryan Guiana shows us How to File a Complaint with the Do Not Call Registry at Cash Money Life.

Ken Faulkenberry discusses Investing in Alternative Investment-Is it Right for You? at AAAMP Blog.

Miranda Marquit offers 5 Ways to Sabotage Your Retirement in a guest post at Canadian Finance Blog.

Len Penzo tells us about Risk vs. Reward:  3 Important Investment Strategies to Consider at Len Penzo.com.

Jeremy offers 5 Frugal Tips To Get You Through Hardship at Modest Money.

Posts from Fellow NAPFA members

Fern Alix Larocca shares her review of a client’s retirement account in Massive 401(k) Losses?  Not Really. at Figuide.com.

Curt Sheldon discusses a Military Tax Benefit: Rollover Of Life Insurance Proceeds To Roth IRA at FiGuide.com.

Other articles from around the web

Robert Powell tells us that AARP revamps Social Security tools (at their website) at MarketWatch.com.

Kiplinger.com published its annual Retiree Tax Map an interactive guide.

Linda Stern offers Stern Advice:  What to do with that windfall at Reuters.com.

In case you missed it here is my latest contribution to the US News Smarter Investor blog The S&P 500 is Hitting Some New Highs.  Now What? 

Here’s wishing everyone a great weekend.  Go Pack Go!

 

Photo credit:  Daylife

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Friday Finance Links August 17, 2012 – Anniversary Edition

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The big event this week is our 28th wedding anniversary tomorrow.  My still lovely wife, Kyung, and I will be heading to the city for dinner and perhaps other activities.  (photo of Kyung with two of Chicago’s finest during NATO weekend here in Chicago earlier this Summer during our unsuccessful quest to find some protesters)

Here are some articles and blog posts that I suggest for your weekend personal finance reading: 

Personal Finance Blogs 

Tom at Stupid Cents asks Are You Making Spending Decisions Based on Fear? highlighting some ways advertisers others use fear to get us to spend our money.

Ryan at Cash Money Life discusses Investing for Cash Flow – Building a More Diversified Investment Portfolio.  Hard to believe a guy who looks this young is so smart.

Ken Faulkenberry at AAAMP Blog looks at a strategy for the income portion of your portfolio in This is How to Optimize Your Income Asset Allocation Plan.

Fellow financial planner and blogger Jeff Rose says It’s Time for Another Movement – Life Insurance Style.  I couldn’t agree more. 

Posts from Fellow NAPFA members 

Eve Kaplan asks Could You Be Forced To Pay Your Parent’s Long Term Care Bill?

Richard Feight discusses the question Rent Or Buy?

Kimberly Howard provides some sound advice on Preparing Finances For A Potential Layoff. 

Other articles from around the web

Kimberly Palmer of U.S. News warns us to Beware of These Common Holes in Homeowners Insurance Coverage.

Chuck Jaffe discusses 6 money lessons for your college student at Marketwatch.com.

Robert Powell offers 11 reasons to leave your 401(k) behind when you leave a job at Marketwatch.com.  Some good ideas, however as Bob says everyone’s situation is unique.

For the third week in a row I’m including an article from Christine Benz on Long-Term Care 4 Best Practices When Self-Insuring for Long-Term Care.  I’m a big fan of Christine’s; her articles on Morningstar.com are always worthwhile reading.

In case you missed it here is a link to my latest post for the US News Smarter Investor Blog Your Takeaway for New 401(k) Fee Disclosures.    

Thank You

For the second week in a row to Josh Brown for featuring one of my posts in his  The Good Leads  post in the Wall Street Journal this past Tuesday.  Josh also blogs at The Reformed Broker which is a must read financial blog.

Here’s wishing everyone a great weekend.

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How much is Financial Advice Worth?

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A fellow NAPFA advisor  and I were pondering this question this morning.

Retirement

Our meeting was centered upon marketing our 401(k) participant advice services to employers, individuals, and related service providers.  In our minds people should be beating our doors down given the general state of retirement readiness in this country.

The interesting obstacle that we’ve encountered is a resistance among many plan participants to pay for advice, with fees starting as low as $400 per year.  Both of us run our own separate practices that focus on moderate to high net individuals, and in my case also to retirement plan sponsors, foundations, and endowments.  These folks are used to paying fees and the level of the fees we ask are usually not a surprise to these clients.

We came up with two great questions in terms of the 401(k) participant advice market.  How much is financial advice worth?  Is your financial future worth $400?

I recently needed a new water heater, and we paid upwards of $1,500 for the water heater and the labor to install it.  Given that this is not an area of expertise for me, and the fact that working with our gas connection made me very uncomfortable this seemed like money well-spent.

Depending upon their specialty and your location, an attorney might charge $250 -$500 per hour.  If you find yourself in a situation requiring their legal expertise, most of us wouldn’t bat an eye at these fees.

People routinely spend $1,000; $2,000; or more on a vacation.  This is money well-spent; I know that our adult children still talk about some of the family vacations we took when they were younger.

So how much is competent, unbiased financial advice worth?  Part of the answer lies in the benefit that you expect to receive from spending the money.  I ask the question rhetorically because we really want input.  Please leave a comment with your thoughts; we’d really love to know what you think.

As always please feel free to contact me with your financial planning questions and concerns.

 

Photo credit: 401(K) 2012

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Friday Finance Links August 10, 2012

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We continue to enjoy all the great Olympic action on TV this week.  Tomorrow we are heading down to one of ourfavorite Chicago neighborhood festivals, Retro on Roscoe.

Here are some articles and blog posts that I suggest for your weekend personal finance reading:

Personal Finance Blogs 

Peter at Bible Money Matters provides some excellent insights in Attributes of An Olympic Athlete That Can Help in Your Financial Life.

How Much Life Insurance Do I Need? – Typical Coverage Amounts offers a solid framework from which to start this critical calculation via Money Crashers.

Ornella Grosz offers 7 Key Ways to Parlay Your Money Toward Your Success on her Moneylicious Blog.

Jim Wang at Bargaineering discusses the rebate checks that some of us may be receiving under the Affordable Care Act in Health Care Insurance Rebate Checks: 80-20 Rule. 

Posts from Fellow NAPFA members 

Jim Blankenship shares his expertise on the timing of Social Security Benefits in Wealth Defense:  When Should You Start Social Security Benefits? 

Micah Porter discusses Healthcare Costs in Retirement: Medicare Part D.  The cost of healthcare during retirement will continue to be a major expense item via Forbes.com. 

Other articles from around the web

Amy Hoak reveals 7 ways to prevent theft on campus at Marketwatch.com, this really hits home for us as the parents of two college students.

JP discusses 5 Insurance Policies that Your Family Doesn’t Need on the US News My Money Blog.

Baby Boomer Poll by AARP Finds Half Don’t Expect to Retire was of particular interest to me both as a financial planner and as a Baby Boomer, via Huffington Post.

Christine Benz of Morningstar followed up her great Long-Term Care article from last week with 40 Must-Know Statistics About Long-Term Care.

In case you missed it here is a link to my latest post for the US News Smarter Investor Blog Should I Care If My Mutual Fund Owns Facebook? 

Thank You

To Josh Brown for featuring one of my posts in his The Good Leads post in the Wall Street Journal yesterday.  Josh also blogs at The Reformed Broker which is a must read financial blog.

Here’s wishing everyone a great weekend.

 

Photo credit: hops_76

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Friday Finance Links August 3, 2012

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LONDON, ENGLAND - JULY 28: Sue Bird #6 of Unit...

A week of getting some work done in the office and following the Olympics on TV, to say we are Olympic junkies is an understatement.  Our daughter will be coming home for the weekend to relax and watch the Olympics on a real TV vs. her computer.

Here are some articles and blog posts that I suggest for your weekend personal finance reading:

Personal Finance Blogs

Len Penzo offers an interesting take on the Olympics and life in The Olympics: More Proof Those Given Everything Appreciate Nothing at Len Penzo dot com. 

Josh Brown at the reformed Broker calls out the head of an alternative investment firm for his sales tactics in The World Series of Bullshit, Game 3.

The Canadian Finance Blog posted Is Pet Insurance Worth It?  As the owner of three dogs I can relate to this one.

The Novel Investor wrote All Index Funds Are Not Created Equal and I couldn’t agree more. 

Posts from Fellow NAPFA members

Jean Keener shared some New Updates on Social Security.

Michael Garry explains that Financial Planning Is All About Trade-Offs. 

Other articles from around the web

CNNMoney featured this excellent piece The truth behind target-date funds.

Morningstar’s Christine Benz asks Do You Have a Viable Plan for Long-Term Care? 

Jon Chevreau wrote The rose colored retirement dreams of the young.  While geared to his Canadian audience, Jon’s article is equally relevant to us here in the U.S.

In case you missed it here is a link to my latest post for the US News Smarter Investor Blog A Financial Planner’s Reflections on the Past Four Years.

Thank you to Tom Drake for including my blog in his ongoing blog round-up Money Index (on the investing tab).  Money Index can also be accessed from his Canadian Finance Blog by clicking on Personal Finance Links.

 

Bobofest (our annual mini high school reunion) this past Saturday was a lot of fun, always great to see the guys.  One new attendee who I literally have not seen since high school made an appearance.

Here’s wishing everyone a great weekend.

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