Money management guide for those with disabilities and special needs

Financial Resources for People With Disabilities by Daniel Gleich is available on the Madison Trust Company website.

"People with disabilities often face additional financial challenges due to the added expenses that can stem from their disabilities, such as the need for more health care and the cost of equipment required to maintain their independence. But at the same time, research has shown that people with disabilities often have less income than people without disabilities. This makes keeping up with the cost of living increasingly difficult, which is why it's essential that people with disabilities have strong money management skills. With careful budgeting, it is possible for people of all abilities to meet their financial goals."

Beside providing plenty of financial advice applicable to everyone, this website is an amazing resource with links to dozens of resources specific to persons with disabilities. Links to Supplemental Security Income, government benefits, income tax breaks, and Seven Surprising Discounts for Disabled People are among the dozens of helpful resources. The website is essentially a crash course in personal finance that all can benefit from and put to use. Check it out:

Thanks for volunteer Julianna and Lisa Echevarria at the Hastings Recreation Center in Minnesota for this information. Check out the website:

https://www.madisontrust.com/client-resources/articles/financial-resources-for-people-with-disabilities/

Help in hiring financial professionals

 The Right Way to Hire Financial Help - 2nd Ed.: A Complete Guide to Choosing and Managing Brokers, Financial Planners, Insurance Agents, Lawyers, Tax Preparers, Bankers, and Real Estate Agents

by Charles A. A. Jaffe | Feb 12, 2001

 

I've used this book multiple times and lent it to friends and clients who needed to hire an attorney, real estate agent, CPA, and other financial professionals. Don't let the 2001 publication date deter you. The advice and questions to ask when hiring a financial professional haven't changed much over the decades. 

Tiresome Debates about the 4% "rule", Claiming Social Security, and investing vs. paying down debt

 Jonathan Clements, author of the Humble Dollar Blog https://humbledollar.com/ and former Wall Street Journal financial columnist, is one of the most sensible financial experts I've encountered in a 40+ year career of teaching personal finance. Check out his blog.

Rather than me summarizing his main points, read the financial journalists column "Tiresome Debates" about:

1. Should you use the 4% withdrawal rate?

2. Should you take Social Security early and invest the money?

3. Should you use your spare cash to invest or pay down debt? 

Check it out: https://humbledollar.com/2022/09/tiresome-debates/?utm_source=mailpoet&utm_medium=email&utm_campaign=another-ses-test_7 

Explore the Humble Dollar blog for a full financial education:  https://humbledollar.com/

 

How much should you pay for financial advice?

 How much are you paying for financial advice and investment management? How much should you pay?

Mike Piper, author of the oblivious Investor blog https://obliviousinvestor.com/ recently posted:

Professional Financial Advice: How Much Should You Pay?

Why pay 1% of assets under management (AUM) if you haven't changed anything in your portfolio for the last 10 years? (I've seen clients like that who are unaware that their "advisor" has been siphoning off 1% of their portfolio each year while doing virtually NOTHING). Even if you are getting a yearly "check up" with your advisor, is it really worth paying 1% of your portfolio? One-percent might not seem like much when the financial markets are returning 20-25%/year like the past few years but what about when markets are losing money? That 1% fee compounds the losses. Do you really want active management of your portfolio

 

Mike Piper wrote a through discussion of how financial advisors are paid and what your options are for hiring paid advice, as well as DIY options. The average hourly rate for financial advice is $250. If your portfolio total was $25,000, a 1% fee would equal $250. 

 

Piper's Oblivious Investor blog is loaded with consumer-oriented financial and investment advice. You can sign up to receive a weekly email which is a great way to gain information and motivation to help improve your financial situation.

Money Tasks to Take OFF your to-do list

Don't hurry to pay off a low interest mortgage. Buy US I bonds instead. The current rate is 7.12% payable through April 2022. You can't access your money for 12 months but give up access to any mortgage prepayment anyway.  Search for I bonds on this blog for more info. 

Don't be a sucker when the ad says "supplies are limited," "only a few left" or "limited time offer or similar" effort to get you to buy now or you will lose out on savings. It's simply marketing language to get you to part with your money NOW!

Don't track every penny spent. Did I really write that? Most people don't need to obsess over every dollar they spend. Simply follow the 50/20/30 recommendations: 50% of your pay for rent/mortgage and other essential bills (electricity, fuel, etc.); 20% for savings (includes emergency fund, short term goals, and retirement contributions); and 30% for remaining expenses. Pay yourself first with an automatic saving/investing contributions. Pay bills automatically (utilities, insurance, credit cards). 

Don't fall for FOMO (fear of missing out). Skip the cryptocurrency rage and invest in time-tested strategies described in this blog: Keep expenses low, diversify and buy index funds. 

Thanks to Veronica Dagher, writing for The Wall Street Journal, 12/29/21

Financial Literacy and Career Resources for College Students and Grads

 Have questions about borrowing, student loans, car loans, savings, setting goals? Need help with your resume and job search? https://www.igrad.com has videos, info, worksheets and more on its comprehensive website. With additional topics like long term care insurance, the site isn't just for young folks.

Thinking about hiring a financial advisor? Considering switching advisors?

 Here are some links to articles to help you find such assistance. Thanks to Michelle Singletary, personal finance writer for The Washington Post.

What You Need to Know About Fee-Only Financial Advisors

Fee-Only Financial Planner vs. Fee-Based: What’s the Difference?

Financial adviser, financial planner or robo-advisor? Here’s how to find the right help to manage your money

Financial Wisdom

Money quotes offering wisdom:

“Exiting the market after a decline – and thus failing to participate in a cyclical rebound – is truly the cardinal sin in investing.” Howard Marks

“Time in the market beats timing the market.”

People first, then money, then things. – Suze Orman

“Annual income twenty pounds, annual expenditure nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery”
― Charles Dickens, David Copperfield

“Enough” and “Stay the course.”  Jack Bogle

“Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.” Warren Buffet

Excellent financial weekly email newsletter

Your Money: Every week, get tips on retirement, paying for college, credit cards and the right way to invest.

It's free so sign up today.

https://www.nytimes.com/newsletters/yourmoney?campaign_id=12&emc=edit_my_20190624&emc=edit_my_20200413&instance_id=17606&nl=your-money&nl=your-money&regi_id=83720664&segment_id=25000&te=1&te=1&user_id=bde4c6c63beab087f13b761e1ee9fe1e

How does your financial adviser get paid? And why does it matter?

"With markets in turmoil, investors need financial advice more than ever. Unfortunately, figuring out where to get it and how to pay for it just got a little harder" according to Jason Zweig writing for The Wall Street Journal. Until recently you could find this information about Certified Financial Planners from Letsmakeaplan.org. But the CFP Board of Standards will no longer disclose this info on the website.
Why does how your adviser get paid matter? Search for "fiduciary" on this blog fro a reminder.
Financial advisers on commission earn a slaes fee when you trade stocks or other securities, buy insurance, or other financial products. So they may not charge you for advice, you are paying indirectly when they recommend a product and you buy it. Hmmm... think about the implications.
A fee-only adviser charges either a one-time or recurring fee for advice and/or managing your portfolio.
The letsmakeaplan website had served as a fast way to find a Certified Financial Planner. Now... not so much.
A 2019 investigation by The Wall Street Journal revealed that about 6,300 CFPs listed on the website had faced criminal or regulatory problems not disclosed on the website.
While the CFP Board requires members to adhere to a code of ethics, there is little enforcement.

Once again, it is essential to ask your adviser directly if they serve as a fiduciary. Check out links on this blog.

Life’s most important money lessons

Humble Dollar author and personal finance guru Jonathan Clements offers these recommendations:

1. A small home is the key to a big portfolio.
2. Debts are negative bonds. paying off debt almost always garners a higher after-tax return than you can earn by investing in high-quality bonds.
3. Watching the market and your portfolio doesn’t improve performance.
4. Thirty years from now, you’ll wish you’d invested more in stocks.
5. Nobody knows squat about short-term investment performance.
6. Put retirement first. Before buying a house.
7. You’ll end up treasuring almost nothing you buy. Focus on experiences rather than possessions—a wise use of money, says happiness research.
8. Work is so much more enjoyable when you work for yourself.
9. Will our future self approve? As we make decisions today, consider how your future self will look back on your choices.
10. Relax, things will work out.

Get the full details: https://humbledollar.com/2020/02/nobody-told-me/

Financial Life Planner

HumbleDollar’s financial life planner’s goal is to guide you through 13 financial steps that’ll help you navigate the journey from your early adult years to retirement.

• Step 1: Prep for Success
• Step 2: Stockpile Cash
• Step 3: Doctor’s Orders
• Step 4: Aim to Retire
• Step 5: Shed Bad Debt
• Step 6: Protect Your Pay
• Step 7: Buy a House
• Step 8: Plan Your Estate
• Step 9: Make Projections
• Step 10: Educate the Kids
• Step 11: Revamp Insurance
• Step 12: Pay Off Debt
• Step 13: Quitting Time

https://humbledollar.com/money-guide/your-financial-plan/

Hundreds of financial professionals pose a risk to their clients!

"A proposed rule from the Financial Industry Regulatory Authority that would impose restrictions on firms employing high-risk registered representatives and financial advisers may apply to 61 financial-services companies, said FINRA CEO Robert Cook. John Salerno, who manages the high-risk representative program, said hundreds of individuals have been identified as presenting risk to clients."
https://www.investmentnews.com/article/20190517/FREE/190519929/finra-makes-its-list-to-target-hundreds-of-rogue-individuals 
ALWAYS ask a financial salesperson/adviser if they are a fiduciary... which means they must put the client's interests first. 
Check related blog posts on fiduciaries. The Obama administration proposed regulations requiring financial salespersons and advisors who deal with retirement accounts to be fiduciaries but the trump administration shot down that consumer protection. 

Check the background of investment professionals at https://www.finra.org/ using Broker Check.

Maybe your financial "adviser" has been taking advantage of you

"The Securities and Exchange Commission's program to persuade investment firms to self-report conflicts of interest has led to a settlement under which 79 firms return $125 million in fees to clients. The firms placed clients in share classes with expenses higher than those in other share classes available without disclosing that fact." (Retirement Security SmartBrief)
"Advisers to Repay Fund Investors" by Dave Michaels in The Wall Street Journal (3/12/19) states that 79 investment advisory firms have agreed to pay $125 million to clients thwo were over charged for their investments.
If you are not familiar with the term "fiduciary" then it's time to search this blog and educate yourself.
These "advisers" sold high cost mutual funds to their clients in order to boost their own earnings or qualify them for earning prizes like vehicles and trips. These practices have been around for as long as the industry has been selling financial products. Equally suitable lower cost funds were available for these clients who ended up earning less on their investments due to the difference in fund costs.
Top of the list is Wells Fargo, the "king" of egregious consumer practices. Why does anyone still do business with Wells Fargo? Deutsche Bank is also involved in this settlement.

So you think you're a good judge of financial advice?

The vast majority of financial advisers do not take advantage of their clients. BUT... "About 7 percent of U.S. advisers have misconduct records in civil or regulatory proceedings." And previous studies have shown it is easy to cover up these bad records.
Squared Away Blog's author Kim Blanton explains the study:
"A new study finds that various things can trip people up and make them trust an adviser who is giving out bad advice. These influences included a good first impression of the adviser. And one way for an adviser to make a good first impression is by initially confirming the client’s own views on investing before introducing poor advice."
Why give bad advice? Advisers who are not fiduciaries may have an incentive to recommend costly products that pay them a high commission or qualify them for bonuses or other incentives like trips to Hawaii.
"The subject of this study – judging the quality of financial advice – is important at a time workers are carrying a heavy load of responsibilities for managing their 401(k) accounts, and the accounts are becoming more critical to their retirement outlook."
Read the summary of the study and its conclusions at: https://squaredawayblog.bc.edu/squared-away/are-we-able-to-judge-financial-advisers/
And heed Kim's conclusion after reading the academic study: "Left to their own devices, the public’s financial acumen is generally poor, and a good adviser will steer them toward sound decisions. But this research indicates that investors can get into trouble if they aren’t able to detect when they’re getting bad advice."
So be skeptical, educate yourself (using this blog), and get a second opinion, just like you would before major surgery.

Does your financial advisor put your interests before his/her's?

The term "fiduciary" has been in the news for past couple of years. The Obama Administration proposed a rule that financial advisors who deal with retirement must follow a fiduciary standard rather than a "suitability" standard. A fiduciary must put the client's interests ahead of her/his own (i.e., costs, commissions, etc.); previously most advisors only had to recommend products that were "suitable" for the client (but perhaps were more costly than other alternatives, thus paying the advisor a higher commission and costing the consumer higher fees and lower returns). The Trump administration has rolled back this rule.

Therefore, it is essential that consumers ask their advisor: "Are you a fiduciary? Are you putting my best interests ahead of your financial gain?"
Read Peter Fisher's article:

Why Conflicting Retirement Advice Is Crushing American Households

In a 2015 report by the Council of Economic Advisers, the authors estimate that “the aggregate annual cost of conflicted advice is about $17 billion each year.” This conflicting advice comes from individuals and institutions that are "compensated through fees and commissions that depend on their clients’ actions. Such fee structures generate acute conflicts of interest." (full quote).

"Unfortunately for the American family seeking 'professional' financial advice, the choices are few. Just a small percentage of financial professionals are able to offer financial advice without facing the conflicts outlined by the Council of Economic Advisers." 

Very few are "fee-only advisers who follow a true fiduciary standard that prohibits commissions on products recommended to clients and legally requires the advisers to always put their clients’ interests first." 

Check out a list of questions you should ask your advisor at: https://www.forbes.com/sites/forbesfinancecouncil/2018/08/17/why-conflicting-retirement-advice-is-crushing-american-households/#470655621355 

"10 Tactless things I tell clients"

Financial planner Allan S. Roth wrote this article that provides profound advice in a very simple format. Much of what he has told clients are factors that I've also pointed out to my clients. Enjoy!
1) I’m charging you $450 an hour to tell you I don’t know the future. (I only charge $75/hour).
2) Investing should oscillate between boring and painful.
3) Is your goal to die the richest person in the graveyard?
4) No, you won’t have the courage to rebalance after a stock plunge.
5) You are borrowing money at a higher rate than you are lending it out and you aren’t going to make it up with volume!
6) You have a ton of cash and that is your riskiest asset.
7) Keep it simple stupid.
8) If it feels wrong, go for it. 
9) Get real!
10) I’m not right for you. (So far I've only told this to one client)       
Get the details at this link: https://www.financial-planning.com/opinion/10-things-financial-advisors-should-say-about-investing?utm_campaign=Jul%2018%202018-what_you_missed&utm_medium=email&utm_source=newsletter

Fiduciary Rule Delayed by Trump Administration

The Labor Department said an 18-month postponement of enforcement of several key provisions of the fiduciary rule has become official. The effective date of the best-interest contract exemption and related exemptions has been changed from Jan. 1, 2018, to July 1, 2019.
Financial "advisors" can continue to put their own financial interests ahead of their clients thanks to the pro-business, anti-consumer Trump administration.Financial salespersons can continue to recommend investments that line their pockets and put their own interests ahead of their clients.
Why should advisors put their clients best interests ahead of their own? Just one more anti-consumer action from the current powers.
Have you asked your "advisor" yet whether he is a fiduciary? If not, it's long past time.

Great monnthly newsletter: The Humble Dollar by Jonathan Clements

I became addicted to Jonathan Clements' financial advice and educational columns when he was a weekly columnist for The Wall Street Journal. I looked forward to reading his column every Wednesday and sharing the information with my personal finances classes at Utah State University. His advice is always simple to understand, consumer-oriented, and logical. I invite you to explore Clements' website: http://www.humbledollar.com and to subscribe to his monthly newsletter. Following his advice will improve your financial situation! His books are great too, but I think reading a weekly blog or monthly newsletter is more likely to lead to action than reading an entire book. But his books help to reinforce his financial advice column. Check out The Humble Dollar at http://www.humbledollar.com/ 

New Year, Fresh Start by Jonathan Clements

"WANT TO GET YOUR FINANCES headed in the right direction? Below are nine steps to take in 2017. With each step, I’ve included links to the relevant sections of HumbleDollar’s money guide." http://www.humbledollar.com/money-guide/main-menu/
Here is a summary of Jonathan Clements' "New Year-Fresh Start." Read the details at: http://www.humbledollar.com/2017/01/new-year-fresh-start/
1. Ask why.
2. Size up your opportunities.
3. Get started as an investor.
4. Buy a target date retirement fund.
5. Re-think your life insurance.
6. Build up your emergency fund- buy funding a Roth IRA. 
7. Revisit 2016's spending.
8. Plan your estate.
9. Talk to your family about your finances.