My wife and I play in a fantasy football league comprised of a handful of other couples in and around our neighborhood. This season something interesting happened. As the start of our season drew near, one of the couples in the league had to back out. With literally a couple of weeks left before the start of the season we were in a pinch as nine couples had to decide on one other couple to join the league. Dicey, at best.
How To Get 100% Of Your 401(k) Match
Earlier this year we talked about investment options if you're already making the maximum contribution(s) to your 401(k) and still want to save money elsewhere. We also covered the importance of contributing to your employer's 401(k) plan in order to get the full matching contribution…aka compensation.
Today we're talking 401(k) again and I want to show you why it's important to understand how your employer matches your contributions.
Is A Market Downturn Coming?
Recently Jill & I attended a friend's birthday party. It was a Casino Night theme and of course fun was had by all. After all, we weren't playing with real money!
They had two table games that evening: blackjack and roulette. Seeing the roulette wheel reminded me of a visit I took to Atlantic City many years ago.
GAMBLER’S FALLACY
A friend and I were sitting in a lounge…
The Power of Compounding Interest and Inertia
I think we're all prone to inertia in some shape or fashion, be it financially or otherwise. Guilty as charged.
You wouldn't know it by looking at me but I've put on some weight this year. I don't watch my weight. I've always been thin and eat fairly well most of the time. And I've always been pretty active. Like most people, I go through phases of working out. Generally it's pretty regular and I'll take some time off here and there. This year has been a challenge for me…
What's All This Free Trade Talk?
Yesterday two very large financial institutions announced they would no longer charge "commissions" on any online exchange-listed stock, ETF (domestic and Canadian), and options trades for any investor on their platforms.
The cost associated with investing has been plummeting for years. First it was the robo-advisor firms pushing down costs for asset management. And lately, another financial…
What Is A 401(k) Match?
Most of you reading this likely contribute to your employer's 401(k) plan. And a good percentage of you also receive matching contributions from your employer. Or if you own your own business, you might contribute to and also be responsible for the matching contributions. I imagine you've heard these employer matching contributions referred to as "free money". Sure, we can call it that and if it feels good, do it. If you aren't taking advantage of your company's match…
Wits & Wagers
Last week we were on vacation at my in laws house. Close family friends joined us for the trip and a couple of nights were spent around the table competing in the board game called Wits & Wagers. We paired up into teams of two with each team consisting of an adult and a kid. If you know anything about our family, we trend toward the "more competitive" side of the ledger. It was an intense couple of nights. Well, about as intense as a game of Wits & Wagers can get!
The Great Chase
Last week I showed you the financial planning formula. Here it is again
wealth = $$$ x years x % (aka rate of return)
Pop quiz: of the four factors in our formula, how many of them are variable?
If you answered all of them, go ahead and give yourself a round of applause. One of the issues with our formula is…
Better Than Average
In one of my peer groups, a fun poll was posed to us and essentially it asked if our profession (financial advisors) would be more fun if we could reliably beat the market. I got a good chuckle out of it, because, obviously, who doesn't want to beat the market?!? You do. I do. And yes, it would certainly make client conversations a little easier. Maybe a lot. Lol.
But this question also got me thinking. Why are we so wrapped up with trying to beat the market?
How Much Risk Should I Take?
Ahhhhhh, risk and reward. Always the teeter totter of investment conversations. When it comes to investing, we all want to have our cake and eat it too. Meaning we want the maximum return - all the upside in the market. And we want nothing to do with the risk - when the markets go down. Who wouldn't want that?!
Unfortunately that's not how the markets work. In order for our money to grow…
Kaizen
Our youngest son, Sutton, is playing baseball again this season. The team is comprised mostly of 7 year olds. So far, we've had a few practices and two games. And let me tell you…they stink.
Seriously. They're not good. After our last game Jill said to me, "It's like watching The Bad News Bears."
And she's not wrong.
Before you start thinking "Wow that's horrible,” or “How can they say/think such things," hear me out.
Pop Quiz!
Remember way back when you were in school? Maybe middle school or high school? You'd walk into one of your classes and the teacher would announce "POP QUIZ TIME!"
I always imagine these words were uttered in sheer delight. Or in a sadistic manner. Or sometimes with an evil villain laugh following the phrase. Like, "POP QUIZ TIME!! Mwah-hah-hah-haaaaaaaa!!!"
And then, bum-bum-BUMMMM. A collective groan from the class.
Luck vs. Skill
"I'd rather be lucky than good."
I understand the meaning behind the statement. I just don't get why we'd rather be lucky than good, especially when it comes to investing.
Yes, luck plays a part in most of our lives. I am lucky to have met my wife. Okay, very lucky. I am lucky to be blessed with five kids. Also very lucky. On the other hand, being lucky doesn't automatically make me a good husband, nor does being lucky make me a good father, either. These are skills we have to work at.
On the golf course, I'm pretty good. I have some skill - I happen to be…
The Ostrich Effect
I came up with this concept very early in my career after realizing a lot of people I was meeting with were ignoring their financial life. Turns out I wasn't the first one to think of the concept! In behavioral finance, the Ostrich Effect is an attempt made by investors to avoid negative financial information. And the term? It comes from the common legend that ostriches bury their heads in the sand to avoid danger.
This bias takes its name from…