In my last blog I introduced the economic theory and field of study of life cycle finance, a principal goal of which is to construct a useable framework to help individuals improve their financial decision making to produce better monetary outcomes and maintain the smoothest and highest possible standard of living throughout their lives. A central …
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As I write this blog investors have been administered yet another shock in the form of the Institute of Supply Management manufacturing data. The report showed slower than expected growth in U.S. manufacturing and perhaps more troubling, the steepest decline in new order growth in over 30 years. This news comes on the heels of an …
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Underestimating the impact of compound growth on a household’s finances can lead consumers to make poor economic decisions including borrowing too much and saving too little. The three main engines that drive compound interest on an investment made or a loan taken out are the amount invested or borrowed, the time horizon of the investment …
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A modest but consistent savings program combined with a prudent investment strategy can yield astounding results when allowed to grow over a long period of time. This is the power of compound growth. In the previous two articles we explained how it works and how investors can harness it to achieve their long-term financial goals. …
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Compound growth, also known as exponential growth, is one of the most powerful yet least understood forces in personal finance. Even a basic understanding of how it works and its effects on building personal wealth could motivate investors of all ages to make smarter saving and investing decisions especially in the area of retirement planning. …
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When planning their financial futures the number one goal that comes to mind for most people is retirement. Even for those who love their jobs and plan to work as long as possible, the time will come when they will leave the workforce and rely on their savings to help support a comfortable lifestyle. In …
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“The members of the Barron’s Roundtable see a year of modest gains for U.S. stocks, trouble for bonds, and good news for gold.” This was author Lauren Rubin’s lead in to her January 2013 Barron’s article summarizing the 2013 investment predictions of the financial “luminaries” that comprise Barron’s Investment Roundtable. How did they do? Not …
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It’s been a very good year for stock investors. The Standard & Poor’s 500 Index which serves as a proxy for the U.S. equity market is up over 25% in the last 12 months and stands close to an all-time high. For those who began the year with a well-conceived investment mix of stocks bonds …
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The first article in this series discussed the princi­pal differences between traditional and Roth IRAs. Last week we identified both the benefits and tax consequences of converting a traditional IRA to a Roth IRA, both of which have important and long-lasting implications for an individual’s finances. In general terms converting from a traditional IRA to …
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A Roth IRA conversion is the process of transferring funds from an existing traditional IRA to a Roth IRA. The decision to convert presents an interesting quandary for investors. When you convert to a Roth IRA you’ll be accelerating income taxes on the conversion amount in exchange for tax-free growth and the opportunity to avoid …
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