Wisdom on Wealth

Question: I keep a very detailed budget on a spreadsheet. All my income and expenses are in there. I even categorize my debit card expenses from my bank statement each month. My budget shows a $500 positive balance each month. But I never have any money in my account by the end of the month. I cannot figure out what is happening.

Answer: Your math may be right, but your path is wrong.

By Mike Jones, posted March 17, 2016

This month I would like to introduce you to two things: the first is the strategy of introducing alternative funds to a portfolio. The second is the management firm AQR.

Question: I’m getting closer and closer to retirement and I don’t see how I’m going to pull it off anytime soon. My parents were not rich folks, but they retired on time and seemed to be OK. All my friends seem to be in the same boat. What’s changed?

Answer: Everything.

Life was very different for your parents, both during their working years and in retirement. On average, for people in your parents’ generation:

Question: My wife’s cousin is one of these that always seems to be in financial trouble. Now she’s needing a loan to consolidate some credit cards she had to use for some medical bills and the bank won’t give her the loan. I have the money and she says she will pay me a good interest rate. I’m not earning anything at the bank. Is it wrong to charge her interest?

Answer: I think you’re asking the wrong question.

Maybe the question you should be asking is, “Am I willing to give my wife’s cousin this money?”

The following segment first aired on KEDM 90.3 on September 9, 2015

Question: My daughter is in her freshman year at Tech and I’m scared to death that the TOPS program might be eliminated. I’m not sure I would be able to pay all of her expenses if TOPS is canceled. What do you think will happen?

Answer: My ability to predict what politicians might do is about as useful as my prediction of next month’s Power Ball numbers…and just about as accurate.

The following segment first aired on KEDM 90.3 on September 2, 2015

Question: I should get about $2000 a month from Social Security when I retire, hopefully next year. I’ve got about $300,000 in my 401(k) plan. Everybody I talk to says I ought to be able to get $1000 a month off that. I’m just double checking with you, but it sounds to me like I’m all set.

Answer: It comes as a shock to most folks entering retirement that they need two kinds of money in retirement.

By Mike Jones, posted February 18, 2016

Investing is always difficult. Even during robust bull markets it takes both courage and fortitude to succeed. Either you sell your best investments far too early justifying it with that worn out cliche "you can't go broke taking a profit," or you just can't bring yourself to allocate enough money to stocks to begin with. Then, to add insult to injury, you increase that allocation when prices have peaked. The loss on those funds then impede the overall progress of you portfolio. And this can happen to an investor when times are good.

Question: My wife and I have been married four years and we are expecting our first child. We both work and are both committed to being financially responsible, but we are having a disagreement.  I think we need significantly more life insurance on me in case something happens. She agrees we need some on me, just not as much as I think we do. She says we don’t need to spend money on that much insurance – that we should save it instead. What do you say?

Answer: Happy Valentine’s Day!

I’m happy to see you both “arguing” over how much to love each other. Because that’s really what life insurance is – love, in tangible form.