FINANCIaL
FIELd NOTES
Why Average Returns Are Misleading
I often write about financial planning strategies that assume a rate of return. I try my best to use reasonable assumptions but even these assumptions can be misleading.
For example, the average return was 10% for the S&P 500 (or similar index) over the past 90+ years. Investing would be a whole lot easier if we could have the assurance that the 10% would come every year. Unfortunately, it doesn’t work that way…
Should You Keep Your Old Whole Life Policy?
Last week I wrote about the differences between term and whole life insurance. In general, I am an advocate for putting cheaper term policies in place and investing outside your insurance.
With that said, I talk to many individuals with whole life policies they put in place years ago. In some cases, their parents bought it for them and they still own it 60 years later!
The Math Behind Term vs. Whole Life Insurance
When deciding on life insurance, you have a lot of options to choose from. I am often asked about my opinion between whole life and term insurance. Whole-life policies are designed to last your whole life, while term insurance only lasts for a certain amount of time.
In general, I am an advocate for term insurance but there are some benefits to whole life…
Why Chasing Winners Rarely Works
Having a diversified portfolio can be an agonizing experience. On one hand, you will always have some exposure to the best-performing investments, but it will never be as much as you want it to be.
For the past decade, it has been difficult to own small-cap stocks, international stocks, and value stocks. US growth stocks and REITS have been some of the best investments. But even these investments have had some terrible years…
How We Can Interpret Data Better
My favorite read last year was Factfulness by Hans Rosling. It provides insight into how to approach data - particularly data related to hot button issues. A lot of the book can be boiled down to “ask the next question.“
For example, the other day I saw this headline - “Pasta may be good for your heart health.” I love pasta as much as the next person but I was skeptical…
Making Sense of Medicare, Part 2 – The Cost
Last week, in Part 1, I reviewed the 5 pieces to Medicare and the 2 main ways to get Medicare coverage.
This week, in Part 2, I will outline the cost for the 2 options.