Like the ubiquitous, annoying, will-it-ever stop GEICO commercials, I plan on telling you something you likely know, and something you probably don't know, about saving for retirement.
We all know that starting to save early is a good thing. The magic of compound interest means that a dollar saved now is worth more than a dollar saved later since the earlier effort has more time to grow. Thus, if your goal is to amass $1 million by age 65, here's how much you have to save beginning at different ages (assuming an 8 percent growth rate):
When trying to make intelligent decisions in our lives, unfettered access to the Internet can overwhelm us with seemingly unending amounts of information. Research has shown that we often become paralyzed with indecision when confronted by numerous choices.
When it comes to investments and financial planning, there is ample opportunity to become bogged down by the almost limitless amount of options at our fingertips. Watch the video above to see how a financial advisor can be of assistance in this environment.
I firmly believe that most of the predictions about the stock market in 2014 may (or may not) come true. Impressed by my display of confidence? The recent history of predictions helps me be so bold.
It seems our brains are hard-wired to make, and be influenced by, prognostications. The business writer Jason Zweig calls it "prediction addiction." He likens it to our desire to impose recognizable patterns on what may otherwise be random facts.
But aren't there experts we can rely on? Don't the geniuses at Goldman Sachs know something? You be the judge.
Towards the end of 2011, the Chief U.S. Equity Strategist at Goldman Sachs predicted the S&P 500 Index would finish 2012 at 1,250. Yet the Chairman of Goldman Sachs Asset Management, a separate arm of the Wall Street empire, declared that the S&P 500 Index would more likely be above 1,400 at the end of 2012. The latter prediction proved more accurate as the index closed at 1,426.
More than 2,000 financial advisors descended upon Washington, D.C. last week to learn and network. A number of keynote speakers had very interesting things to say -- the others were politicians. (Seriously, the chances of Washington insiders saying anything of interest to a large, varied audience, with the cameras rolling, is nil.)
A common theme among the many talks was how we are constrained by our preconceived notions.
How much tolerance for risk do you have when investing? Does that tolerance vary with the ups-and-downs of the market or the apparent disfunction in Washington? Can your tolerance be accurately gauged in the first place?
Some advisors believe psychometric-based questionnaires can be utilized to assess an investor's tolerance for risk. Others dismiss the notion that risk tolerance can be ascertained. They argue that our emotions cause us to change our willingness to take on risk based upon what's going on in the world. Investors whose apetite for risk varies with current events makes it difficult to build a stable portfolio based solely upon perceived risk tolerance. A needs-based approach to investing provides an alternative solution.