By Andrew Hallam
The Couch Potato is probably the world’s simplest portfolio. Yet it’s running circles around what may be the most sophisticated and exclusive collection of investments on the planet: the Global HFRX Hedge Fund index.
Rebalanced once a year, the Couch Potato comprises half of its assets in the Vanguard Total Stock M…
By Scott Burns
OK, alpha dogs, want to know where you stand in the wealth heap?
Welcome to the Wealth Scoreboard, my effort to provide some notion of where we stand relative to everyone else.
Since starting this more than 10 years ago readers have asked, every year, for an update. Unfortunately, this kind of information isn’t like the nationa…
By Scott Burns
Q. Two of my friends are considering buying a home – a first for both of them. They are in their mid-fifties. One recently retired after 30 years from a mid-level staff position at the University of Texas, the other worked many years part-time at UT but now has a full-time position as a biologist with the city of Austin. Neither seem…
By Andrew Hallam
Investing in U.S. bonds is like trying to catch rain water in the Sahara. You’re thirsty for some kind of cash yield, but with ten year government bonds paying less than 1.5 percent, you may be tempted to hunt for an alternative. Consider most of those options, however, as desert mirages.
Round the first dune and yo…
By Scott Burns
Both parties talk about “helping” the middle class. But will they actually do it? Don’t count on it.
One reason to doubt the pious declarations of both parties is the fastest rising source of tax revenue our government has— the tax on middle-income retirees.
Yes, I’m talking about the taxation of Social…
By Scott Burns
Q. We just bought a new house. We need to decide between a 15, 30 or possibly 20-year mortgage. My wife and I are both 51. We will likely work only another 10 to 12 years at most. At that point we will probably sell the house and move into something smaller (kids should be gone at that time). Any thoughts on how long a mortgage term we…
By Andrew Hallam
Last year, one of my colleagues lost her husband in an accident. She received an insurance settlement for his death and placed the money in a U.S. dollar savings account with DBS Bank. Roughly six months later, a rep from the bank unexpectedly called her at home, then followed up with a scheduled home visit. He su…
By Scott Burns
A single Washington decision, in 1983, would have nearly doubled the value of the Social Security Trust Fund. That decision would also have made the retirement of today’s workers far more secure. With a reported balance of $2.68 trillion at the end of 2011, all invested in special Treasury obligations, the Trust fund would have…
By Scott Burns
Q. For the past 20 years, I have invested in load mutual funds because I thought I could get a better return on my investment. I recently changed investment companies and was told that I should consider selling my load funds and switch to a no-load fund and save fees. Is this a good investment strategy? I am 50 years old and I plan t…
By Scott Burns
I have a confession to make. I hocked my car.
Yes, your stalwart, ever prudent, trousers rolled, personal finance columnist borrowed against his car. In 40 minutes I went from being a guy with no car payments — a guy who hasn’t had a payment book in years — to being a debtor committed to 60 equal monthly installmen…
By Scott Burns
Q. I am not sure whom to contact or if anyone can help. I have an 82-year-old aunt who has a personal friend and financial advisor pressuring her to take out $200,000 in a home mortgage because he has told her he can get a 7 to 8 percent return on her money. While I was visiting today he called. He was very insistent about the urgency …
By Scott Burns
Q. I am not sure whom to contact or if anyone can help. I have an 82-year-old aunt who has a personal friend and financial advisor pressuring her to take out $200,000 in a home mortgage because he has told her he can get a 7 to 8 percent return on her money. While I was visiting today he called. He was very insistent about the urgency …
By Scott Burns
Some things change. Others don’t.
Costs matter. This is one of the eternal verities of investing. We know this from John Bogle, the founder of Vanguard and patron saint of index investing. If we act on this simple fact— that costs matter— we can improve our investment results.
This isn’t what Wall Street tells…
By Scott Burns
Q. I am hoping for a quick reality check on the status of my retirement savings. I am single, 64, with no children. I own my home outright and it is assessed at $475,000. I have no loan liabilities. My two IRAs totaled $265,500 at the end of 2011 (246,593 in regular, $18,910 in Roth). I have another rainy day brokerage account valu…
By Scott Burns
There are two kinds of people in this world. Spenders. And Savers. There is no middle ground.
The savers prepare for every contingency in life. They have retirement savings. They have a reserve fund. They have long term care insurance. And they never borrow money. They do this by putting off until tomorrow (or much further) what …
By Andrew Hallam
Financial magazines are great sources of entertainment, but often, schizophrenic sources of advice. Consider them sage money guides and you could end up questioning your financial plan—even if it’s great. Worse, if you follow their whimsical persuasions, you’ll play a costly game of musical chairs with your m…
Q. You recently addressed a question from a couple whose ages are 75 and 77. You replied “At a later date, you might consider buying a joint survivor life annuity.” Since the couple was in their 70s it got me wondering: what are the tradeoffs to buying a life annuity at younger ages versus older ages? And is there a rule of thumb regard…
By Scott Burns
Allow me to introduce the Oldster Tax. It is a tax for which there is no legislation. It is a tax that is not administered by the Internal Revenue Service. Instead, it has been imposed by the Federal Reserve, an institution that has the power to set interest rates.
The folks at the Fed don’t call it a tax, however. They call it…
By Scott Burns
Q. My wife and I have been working with one broker for 30 years. We aren't anywhere near being in the "1 percent." Our portfolio peaked at $460,000 in November 2007. As the market slid the financial advice we got was "The market goes up. The market goes down. You have high-quality funds. Our analysts say you will be …
By Andrew Hallam
To a teenager, 30 is old, 40 is ancient, and folks over 50 made stone arrowheads. Worse, the gap between older people and younger people has broadened with technology. Our best financial lessons can be as out of step as a senior citizen at a rave: “All you need to do junior, is invest just $100 per month. By the time you&r…
Diversified Asset Allocation Portfolios For Your Plans
| Vanguard ETF: | 10%* |  |
| Diversified Core: | 11%* | |
| Six Core Asset ETFs: | 10%* | |
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