Small Steps to Health and Wealth™ Workbook

The second edition of the 132-page Small Steps to Health and Wealth™ (SSHW) is now available. Download individual chapters of the workbook at http://njaes.rutgers.edu/sshw. The workbook consists of 25 SSHW behavior change strategies. Each strategy has one or more worksheets for users to personalize a change strategy to their situation.

Asset Allocation Podcast

Listen to this 5 minute podcast on asset allocation from FINRA: http://www.finra.org/Investors/SmartInvesting/GettingStarted/Podcasts/MoneyManagement/P515934?utm_source=MM&utm_medium=email&utm_campaign=Investor_News_062614_FINAL
Check out other FINRA resources and podcasts: http://www.finra.org/Investors/SmartInvesting/GettingStarted/

Save or Borrow for College?

Is a dollar saved the same as a dollar borrowed to pay for post-secondary education? Not even close!

firm’s college saving education site (www.collegesavingschillout.com) that explores the implications of borrowing $25,000 versus saving $25,000—an amount of money close to what the College Board says it takes to fund a single year of education at a "moderately expensive" in-state public college for the 2013–2014 academic year.

Compare borrowing $25,000 versus saving $25,000.  According to (www.collegesavingschillout.com) it takes about $70 a month in savings for 18 years to reach $25,000. “If you wait to borrow that money, it will cost about $300 a month for 10 or 12 years to repay the debt. “That’s a huge incentive to save the money in advance. In the end, you can pay several times more to finance education when using borrowed money,”  according to Stuart Ritter of T. Rowe Price.  Saving money in advance puts compound interest to work for the individual—whereas borrowing money works against the borrower.

The best way to save for post-high school education is with a 529 college saving plan and Utah’s 529 (www.uesp.org) is one of the best in the nation.

Ritter says it’s better to pay off the student loans “as you’re supposed to,” while building an emergency fund. After that, retirement savings should be a priority, Ritter says.  “Very often there is a match that you’re giving up if you prioritize debt above everything else and start paying that back faster than the terms of the loan at the expense of retirement plan contributions,” Ritter says. “If it takes you a decade to do pay off the student debt, that’s a decade of lost returns on top of what you paid back for the loans. If you can afford to put money into the retirement plan while still paying back student debt, that’s an extra 10 years of compounding you can earn.  Details at: http://www.planadviser.com/NewsArticle.aspx?id=10737423456&p=1

Young Investor Website

If you are a young adult just getting starting in the financial management world, learn to build wealth by implementing basic investing principles from an early age. Check out the University of Florida's Young Investor Web Site, www.ufyounginvestor.org

Are you wondering if your finances are on track for retirement?

Designed for persons ages 55-64, CoRI estimates how much money you need today to generate each dollar of future, inflation-adjusted annual lifetime income starting at age 65. “The CoRI Index projects the cost of a dollar of income at some point in the future. By one dollar of income, we mean one dollar, per year beginning at age 65 for however long retirement lasts. For example, a CoRI Index level of $13.54 means that a dollar of life contingent income beginning at age 65 would cost $13.54 today.”

“The power of the CoRI Index is that it is not based on hypotheticals or opinions; it is based on real world, real time, and publically available data. The CoRI Index provides useful and actionable insight into your retirement readiness. It also allows you to measure how well you’re doing relative to achieving your retirement income goal and puts you in a much better position to take corrective action.” See: http://www.blackrock.com/cori/what-is-cori

Most excellent free Retirement Planning Booklet

This gem was a real discovery with lots of solid info on retirement planning and colorful graphs and visuals to illustrate the main points. Check it out:

http://www.blackrock.com/investing/literature/investor-education/prepared-for-retirement-little-book-va-us.pdf

How much to save for retirement? 10%? 15%? Half of every raise in pay?

The traditional rule of thumb for how much to save for retirement was 10% of income. However, recent research suggests that 15% is a more appropriate guideline. But… think again. Michael Kitces, one of the acknowledged leaders in creative approaches to financial planning, suggests that investing half of every pay raise will be far more effective, even allowing you to retire early. In a nutshell, saving a % of your income means you will continue to increase your spending and level of consumption such that it will be hard to save enough to maintain that high level of expenditure in retirement. Instead, Kitces convincingly argues for saving 50% of every pay raise. Or, put another way, spend 50% of each increase in pay (and invest the rest). With clear prose and great graphics, Kitces makes a convincing argument for a new retirement rule of thumb. Check it out at: http://www.kitces.com/blog/dont-save-10-of-income-spend-just-50-of-every-raise-and-systematically-save-more-tomorrow/