Focus of a camera lens

Investment Focus: Follow 5 Simple Rules

Vanguard Group Inc. founder John Bogle’s views about investing, not surprisingly, promote the indexed mutual funds that Vanguard offers.  But his views have solid support in the academic literature.

Here’s our translation of his five simple rules for investment success – sound advice for readers who want to work on their 401(k) portfolios:

  • Remember reversion to the mean. If a company’s stock or the overall market has had unusually strong performance, it’s unlikely to continue at that pace.
  • Forget the needle and buy the haystack. Invest in broadly diversified funds, such as index funds that track the market – not in individual company stocks or the money managers who try to find the best ones. …Learn More
New Year's Resolution: Save!

Resolve Amid the Financial Adversity

More than 60 percent of Americans who participate in their 401(k) retirement plans at work are adding more dollars to their debts than they’re socking away in those plans, according to HelloWallet’s analysis of recent federal data.

This shocking statistic suggests the need for some serious financial planning. Yet the vast majority of people in a recent survey said making a financial plan would not be among their 2014 resolutions.

Why not? Many said they “don’t make enough money to worry about” a financial plan, according to Allianz Life Insurance Company, which conducts the survey.

Okay. But if you feel unable or unwilling to write up a full-blown plan, perhaps you’ll consider one small step: …Learn More

Spouses and Their Money: Getting in Sync

Money matters can get complicated for couples who may not see eye to eye. In a recent interview with Squared Away, Kathleen Burns Kingsbury, author of the new book, “How to Give Financial Advice to Couples,” shared her tips and insights for couples trying to meet in the middle.

Q: In a relationship, is money about more than just money?

Kingsbury: Money is often a reflection of our feelings about security, respect, love, power – it really symbolizes these things, whether we’re aware of it or not. So how a couple talks about money and manages their money is a reflection of how they relate to each other in other areas as well.

Q: Explain “money beliefs”?

Kingsbury: A money belief is a thought or attitude toward money that influences your savings, spending, investing and gifting every day. These beliefs tend to reside in our unconscious thought. Because we live in a society where money talk is taboo, we often don’t identify these attitudes. But money beliefs are formed between the ages of 5 and 15 by observing the financial behavior and attitudes of parents or people around us. And these money beliefs tend to be oversimplified, because they were formed in a child’s mind.

Q: Why is it important for husbands and wives to compare their beliefs?

Kingsbury: When couples are arguing about money, they may be arguing about which bills to pay or how to pay for a daughter’s college. But what’s really going on is they’re hitting up against their different money beliefs.

A: What’s an example? …Learn More

Photo: Gift cards

Navigating the Gift Card Thicket

Too many financial products are far too complex. The pre-loaded cards that people give as gifts during the holidays are a multi-billion-dollar example.

When buying these cards, it’s very hard to know what you’re getting and giving. The big things to watch out for are expiration dates and fees. This isn’t easy.

The federal CARD Act of 2009 covers cards issued by retailers for purchases in their stores and cards issued by banks for use in many places. The law bars these gift cards from expiring for five years after their purchase. They must also maintain their full value for a year. But after the first year, the CARD Act permits one fee per month, and a $5 monthly fee can chew up a $25 gift card’s value pretty fast.

It’s difficult to tell the difference between gift cards and prepaid cards, like Wal-Mart’s Bluebird or the RushCard, sold side by side on grocery store racks. But prepaid cards are not regulated at all by federal consumer protection law, while retail and bank cards are, said Christina Tetreault, an attorney for Consumers Union, the non-profit affiliated with Consumer Reports.

State regulations often offer further consumer protections – and add a layer of complexity for consumers. A card that works one way in a state with strong regulations, such as California, may have few protections if you mail it to a relative in Texas.

The following is just a sample of the intricacies of state regulations. …Learn More

Photo: Red flower

Estate Planning 101: Who Knew?

Boston trust attorney Michael Puzo has seen it time and again: people procrastinate about writing a will or putting their estate in order.

“It forces them to face their mortality, and they don’t want to,” he said.

Even those with modest assets – a house, a 401k, and maybe a life insurance policy – should carefully make an estate plan.  But are the nuts and bolts of wills and estate planning widely understood?

This question loomed as Puzo translated these legal complexities in a way anyone could grasp during his presentation to employees of Boston College, where Squared Away is based.  For readers who may not know where to start, here are 10 fundamentals gleaned from his talk:

A good estate plan achieves four goals:

  • Distributes one’s assets to the desired person or people.
  • Ensures beneficiaries receive the money when you want them to.
  • Makes appropriate bequests either directly or indirectly through a trust, rather than a will.
  • Minimizes taxes.

When thinking about a will, get out a blank sheet of paper and write down everything of value that you own, whether it’s a checking account, the house, a wedding ring, or life insurance policy – and who you want to receive each of them.

Many people may be surprised to learn they “have more money than they think they have,” Puzo said.

The difference between probate and non-probate property is critical: …Learn More

Photo: Mortgage signing

Mortgages: the Closing Cost Minefield

When my new partner and I bought a condominium last month to accommodate our combined stuff, I remembered that borrowing so much money can be an emotional, even terrifying, ordeal.

It’s difficult to think clearly.

But attention should be paid to closing costs, which add to the cost of buying a house. So I decided to apply my skills as a veteran newspaper reporter and grilled my lender, attorney and real estate agent about these costs.

Despite my diligence, I was only modestly successful at reining them in. But I stepped on a few land mines that might help other homebuyers:

The HUD-1 matters:

Federal law requires prospective mortgage lenders to provide loan applicants with a “good faith estimate” of the closing costs within three days after they submit the application. This “GFE” is your lender’s best guess of the final fees they’ll charge for originating your loan.

My lender promptly sent the GFE. But the bank’s salesman promised to reduce the closing costs shown on the GFE, and I had to repeatedly nudge him to provide the more important document: the HUD-1 statement of my actual closing costs. …Learn More

Photo: Folders of insurance, medical, and bills

Healthcare Credits Reach Middle Class

Individuals earning nearly $46,000 a year and families of four earning $94,000 may be eligible for federal tax credits under the new health care law.

Tax credits are the mechanism by which the federal government caps how much people pay for health insurance premiums, which are set by the private market. The premium caps are based on how much someone earns, relative to the federal government’s definition of poverty.

Here’s an example of how premiums are calculated for, say, young, single workers who earn between $17,236 and $22,980 per year, which is between one-and-one-half and two times the poverty level. The premiums, which range from 4 percent to 6.3 percent of their income, start at about $57 a month for those at the low end of this income range and up to $121 at the high end.

In the following charts, Squared Away converted into dollars the income and premiums that the Henry J. Kaiser Foundation, in its brief on the healthcare law, has expressed as percentages of the U.S. poverty thresholds: …Learn More

...10...1718192021...